With an environmental permit in hand,
However, the project still needs to comply with municipal building and forestry regulations before development can begin. GlobeStar President William Fishers says the forestry permit is implied under the mining permit.
“We’ve acquired or optioned all the required land and started paying down the options,” Fishers says. “We could start construction now, but typically the banks like you to put up your own equity first before you start to draw down from the bank.”
The company has retained Standard Bank London as finance advisor on the project.
The feasibility study is slated to be completed by late summer, with construction beginning at the end of the summer. The construction period will likely last 10 months; the first production is slated for some time in 2005.
Whereas Globestar initially planned to produce a split copper and zinc concentrate, it now expects to turn out a bulk concentrate. Doing so will require a reconfiguration of the mill, which would ultimately shave off about 40% of the originally estimated capital cost.
“We let the option for the mill in Canada lapse,” says Fisher. “What we plan now is to assemble a mill that is more precisely suited to what we need. The mill will incorporate new and used components to keep costs in line.
“We’re currently in discussions with the smelters directly, and from that we’re at a point where we know what we need to produce, and the engineers are sorting that out now.
“It has taken a long time, but the metallurgy was tricky, so we’ve gone the bulk-concentrate route, and that seems to have solved it.”
He adds that producing a bulk concentrate also eliminates additional sources of loss and has boosted recovery rates.
Fisher says that while treatment fees for a bulk concentrate are higher, capital and operating costs are significantly lower. He adds that GlobeStar will receive payment for any precious metals present in the bulk concentrate, whereas with zinc concentrate, smelters do not generally pay for precious metals.
At last report, measured and indicated sulphide resources at Cerro de Maimon stood at 4.1 million tonnes grading 2.9% copper, 1.8% zinc, and 35 grams silver and 1 gram gold. Similarly categorized material in the deposit’s oxide cap amounts to 660,000 tonnes running 64 grams silver and 2.5 grams gold.
GlobeStar is in the midst of a 4-hole, 600-metre drill program aimed at boosting to the measured category some indicated resources within the planned open pit at Cerro de Maimon.
Cerro de Maimon is between
Globestar has a half-interest in the project; a private U.S.-based company holds the other half, subject to a 10% management fee to Globestar and a provision of $750,000 for project development. Thereafter, funding is to be provided on an equal basis.
The original owner, Falcondo, an 85%-owned subsidiary of Falconbridge, retains a 2% net smelter return royalty (NSR). Falcondo is owed payments of $790,000, with half due one year after the completion of a feasibility study and the balance one year after the start of commercial production.
In August, GlobeStar will drill about 400 metres to develop new reserves at the wholly owned Loma Barbuito massive-sulphide zone, about 4 km from the mill site at Cerro de Maimon.
Previous drilling there was highlighted by a 6.2-metre interval grading 4.4% copper, 3% zinc, 108 grams silver and 1.4 grams gold. The deposit remains open along both directions of strike. The drilling is part of a campaign designed to develop satellite reserves around Cerro de Maimon.
Mineralization at Loma Barbuito comprises a lens of massive, fine-grained pyrite with interstitial chalcopyrite and minor sphalerite. The zone dips 35 to the west and plunges gently to the south. It has a maximum thickness of 20 metres and is at the contact between felsic porphyry and mafic tuffs and andesitic flows.
A second wave of 1,850 metres of exploration drilling will focus on the Bayaguana and Los Hojanchos projects later this summer.
At Bayaguana, 10 holes totalling 1,000 metres are planned around the Dona Loretta target. Previous drilling there returned up to 24 metres grading 2% copper and 0.3 gram gold. The holes will test three distinct groups of shallow, induced-polarization (IP) anomalies found in a 4-sq.-km area.
Another 3 holes totalling 450 metres are designed to extend the Dona Amanda deposit. At last count, the deposit was home to an inferred resource of 45 million tonnes grading 0.45% copper and 0.2 gram gold, based on a cutoff grade of 0.3% copper. Dona Amanda represents a large secondary enrichment blanket situated between 10 and 120 metres below surface.
The 23-km-long Bayaguana project also contains the Cerro Kiosko deposit, which is home to resources totalling 4.9 million tonnes grading 2 grams gold and 5.1 grams silver per tonne, plus 1% copper.
Drilling will then shift to the Los Hojanchos concessions, 25 km east of the town of Maimon. There, eight holes totalling 800 metres will be collared on a series of IP anomalies. Drilling at Los Hojanchos in 1999 returned up to 1.5 metres running 1.6% copper plus minor gold values.
At Los Hojanchos, Everton can earn a half-interest by spending US$1.15 million on exploration. The company can boost its stake to 70% by completing a bankable feasibility study.
Photo by Ryan Walker
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