Adex pleased to nab producer

Ownership of the Mount Pleasant polymetallic mine in New Brunswick has changed hands.

Adex Mining (TSE) acquired all of the shares of Piskahegan Resources, which holds a 100% interest in the mine property, for an aggregate consideration of $9.3 million, consisting of $2 million cash and the issuance of 22 million shares of Adex.

The property, which includes a 2,500-tonne-per-day mine-and-mill complex, has received a total investment of more than $200 million over the past 20 years.

A recent prefeasibility study concluded that the mine could be re-opened at a capacity of 2,000 tonnes per day, treating 6.8 million tonnes of tin-indium ore over a 10-year mine life. This would generate an operating profit of about $160 million over the 10-year period, for an internal rate of return of 27.2% on a full-equity basis. Based on current metal prices, the annual operating profit would amount to 37 cents per share, and the company expects the mine to be brought into production with no further dilution to shareholders. Subsequently, Adex plans to increase the mining rate to 2,500 tonnes per day in order to include production from the original tungsten-molybdenum orebody.

The three main deposits at Mount Pleasant include: the North zone, with 5 million tonnes of proven and probable reserves grading 0.78% tin and 2.53 oz. indium per tonne; the Saddle zone, with possible reserves of 2 million tonnes averaging 0.92% tin and 1.6 oz. indium; and the Fire Tower zone, with proven reserves of 9 million tonnes averaging 0.2% molybdenum sulphide and 0.4% tungsten oxide. Recent drilling has indicated the continuity of ore horizons.

A bankable feasibility study will be commissioned shortly, with mine startup expected to begin in 1997. Once in operation, the mine will produce tin, indium, tungsten, bismuth, copper, molybdenum, zinc and gallium by means of a combination of metallurgical techniques and bio-leach extractions. Mount Pleasant represents the world’s largest known source of indium, a metal used as a coating agent for computer and television screens, as well as in lead-free solders and alloys.