BASE METALS — Breakwater resurrects Tunisian mine

After a startup period of less than a month, the Bougrine mine in Tunisia, has begun cranking out zinc and lead at commercial levels.

The mine’s owner, Breakwater Resources (BWR-T), reports that mill throughput reached capacity levels in May and that metal recoveries and concentrate grades are meeting with expectations.

Cash flow generated by the past producer has been positive, the company reports, adding that the capital requirements to get the mine up and running amounted to US$2 million, which was 25% below budget.

In May, Bougrine produced 29,360 tonnes of ore, which translated into 3,990 tonnes zinc and 461 tonnes lead. Grades for zinc and lead averaged 9.06% and 1.71%, respectively, whereas recoveries came in at 74.3% and 64.3%.

The mine boasts proven and probable reserves of 2.8 million tonnes grading 12.2% zinc and 2.4% lead — sufficient for seven years at an annual production rate of 400,000 tonnes.

Several anomalies are known to exist in the immediate area, and Breakwater asserts that the potential to expand reserves is “excellent.” The original operation was completed at a cost of US$80 million in June 1994. However, a drop in the price of zinc forced then-owner Minire de Bougrine, 48%-owned by Inmet (IMN-T), to pull the plug in October 1996.

During its brief life span, the mill processed 693,663 tonnes averaging 13.7% zinc and 2.5% lead. In 1996, average recovery rates for zinc and lead were 83.7% and 72.6%, respectively.

In July 1997, for a purchase price of US$19.3 million, Breakwater acquired Bougrine, whose assets consisted of the mothballed mine, a

1,150-tonne-per-day concentrator and related infrastructure. The mine and mill were subsequently upgraded by Breakwater at a cost of US$8 million.

At the time of purchase, the Toronto-based company inked a tax-exemption deal with the government of Tunisia. As a result, Breakwater will pay no import duties, no mine taxes for 10 years and no social taxes for five years.