Abacus deals with Teck Cominco for Afton infrastructure

Vancouver – Abacus Mining and Exploration (AME-V) has signed a letter of intent (LOI) with Teck Cominco (TEK-T) to acquire the major’s processing facilities and infrastructure adjacent to the past producing Afton copper mine located 10 km west of Kamloops, British Columbia.

The deal, that also sees Abacus purchasing Teck Cominco’s back-in rights on the project area, has the junior issuing 18.5 million shares and paying $10 million over two years.

Included in the LOI are the milling and processing facilities, tailings storage areas, associated permits and other infrastructure used at Teck Cominco’s operation from the late-1970s to the late-1990s. The acquisition of Teck Cominco’s back-in right, for up to 65% interest, removes a major cloud that has hung over proposed development of Abacus’ Afton projects.

Additionally, Abacus has received preliminary resource estimates for its Rainbow and DM-Audra zones at Afton. On its Rainbow zone, located about 2 km southeast of DRC Resources’ (DRC-T) Afton pit, an indicated resource of 31.6 million tonnes grading 0.41% copper and 0.1 gram gold per tonne was calculated using a 0.25% copper cut-off grade. A further 1.1 million tonnes of inferred resource averaging 0.29% copper and 0.07 gram gold was also reviewed at the same cut-off grade.

On the DM-Audra zone, located about one km east of the Afton pit, an indicated resource of 16.2 million tonnes grading 0.35% copper and 0.2 gram gold was calculated at the same 0.25% copper cut-off grade. Inferred resources stand at 9.4 million tonnes at 0.32% copper and 0.15 gram gold using the same cut-off parameters.

Once the deal has closed Teck Cominco will become about a 30-33% shareholder in Abacus, based on the current capital structure of 37.5 million shares outstanding. The company posts a $13-million market capitalization at its recent trading level of 34 per share.