LATIN AMERICA — Boliden, Silver Eagle ink exploration deal — Swedish giant eyes Minera Serrana project in Mexico

Boliden, the mines and metals business sector of Trelleborg of Sweden, has signed an agreement with Silver Eagle Resources (SER-V) to explore the junior’s Minera Serrana project and fund a Mexican exploration program.

Boliden can earn 51% of Silver Eagle’s 100% working interest in the Minera Serrana project in Sonora state, Mexico, by spending US$1.4 million on the properties over four years.

This project consists of mineral concessions covering 57,189 acres in the San Felipe, El Gachi and Moctezuma zinc-lead-silver districts in the state’s north-central region.

The agreement also calls for Boliden to provide US$100,000 during the first year of Silver Eagle’s exploration venture in Mexico. This effort will be directed towards zinc, gold and copper.

“The country-wide exploration being funded by Boliden launches a program Silver Eagle has been planning for some time,” says Jon Broderick, Silver Eagle’s president. “Consequently, with this agreement, Silver Eagle has gained a 2-pronged co-operative venture with a major mining company that is aggressively expanding its interest in the Western Hemisphere.” The agreement enables Boliden to acquire a 51% interest in projects that have their predominant value in base metals. Boliden would be the operator, with the remaining interest held by Silver Eagle.

For projects that have their predominant value in precious metals, Silver Eagle has the option to acquire a 51% interest and act as operator, with Boliden holding the remainder.

Silver Eagle holds several properties in the western U.S. and Mexico, where three mines are scheduled to enter production in the next 18 months. The first of the planned startups is the small Sara Alicia cobalt-gold project in Sonora state. Capital costs for the 100-Tonne-per-day project are estimated at US$1.4 million.

Later in 1997, Silver Eagle plans to start production at the Pimsa tailings reprocessing project, near Hermosillo. An environmental permit is in hand, paving the way for the company to build a leaching solvent-extraction plant to recover gold, silver, zinc and copper from polymetallic mill tailings.

Over a projected lifespan of 27 months, the project is expected to produce 3,200 oz. gold and 366,000 oz. silver as dore, plus 1.8 million lb. zinc and 204,000 lb. copper as sulphates.

The third project to be placed into production is the Three R copper mine in southern Arizona. This in situ leach project is expected to produce a total of 6.4 million lb. copper over a 3-year life at an estimated production cost of US27 cents per lb.

Mining at Three R will be carried out in existing underground workings.

Copper will be recovered from the water that has flooded the lower mine levels and from copper precipitates on the walls of the upper levels.

Permitting discussions with the state of Arizona are under way.