The majority owners of the San Esteban mine in north-central Chile will sell their 60% share in the gold-copper producer to Aurex Resources (AXR-T) for US$3.3 million.
The Vancouver-based junior already owns 40% of the mine and has been negotiating with the Kemeny family to acquire the rest.
Under the proposed deal, Aurex must pay a total of US$3.3 million to Compania Minera San Esteban Primera by May 15, 1997. However, the offer has yet to be approved by Aurex’s board, which only last year reduced its interest to 40% from 70%.
The San Esteban mill processes 1,320 tons of ore per day and is projected to produce 23,000 oz. gold and 7 million lb. copper in 1996. Production last year amounted to 17,336 oz. gold and 6,054,099 lb. copper.
“Right now the cash costs are high, and it’s kind of a break-even situation, says Aurex spokesman Galaen Singer. “The mill could be a heck of a lot more efficient.”
One improvement the company is considering is upgrading the flotation cells, though its main priority will be an aggressive drill program to expand reserves and boost production to 2,200 tons per day.
“There are 12 veins exposed at surface, that we know of,” says Singer. “We want to drill out the property to justify expansion.”
Aurex envisages annual production of 37,000 oz. gold and 13.5 million lb.
copper by 1999.
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