Boliden walks from Vizcachitas joint venture

Toronto-based base metals major Boliden (BOL-T) has cancelled its joint-venture agreement with Denver-based General Minerals (GNM-T) regarding the Vizcachitas copper porphyry in central Chile.

Boliden, which operates the Lomas Bayas copper operation in northern Chile, returned the Vizcachitas property to General Minerals on the grounds that it did not meet its objectives.

Boliden acquired a 51% stake in the 5,477-ha property early this year when it took over all outstanding shares of Vancouver-based Westmin Resources.

Westmin had formed the initial Vizcachitas joint venture with General Minerals in October 1997.

Initial work at Vizcachitas outlined a high-grade core of 37 million tonnes grading 0.85% copper, within a larger deposit of 283 million tonnes grading 0.6% copper. In June Minerals reported that Vizchachitas contained a total geologic resource of 1.1 billion tonnes of 0.42% copper, based on results from 67 drill holes (18,300 metres).

Boliden’s decision dealt a minor blow to General Minerals’ share price, which dropped 15 cents to a low of 65 cents. At presstime, the issue had returned to the 70 cents range.

General Minerals’ president, Ralph Fitch, does not believe Boliden’s departure will have an adverse effect on plans to develop the deposit.

“Vizcachitas has many positive attributes,” he stresses, “including the near-surface, higher grade copper mineralization and proximity to excellent infrastructure and support services.”

He adds that other companies have already expressed interest in forming a joint development agreement with General Minerals.

The junior is preparing to begin a second phase of exploration, which calls for engineering studies, hydrologic and metallurgical tests, infill drilling, and upgrades to roads and bridges.

A prefeasibility study by Kilborn International, due in August, is evaluating the economics of a flotation mill capable of processing 10,000-30,000 tonnes per day, with a separate flotation circuit for molybdenum. The resulting concentrate would be shipped to a smelter, while lower-grade mineralization would be leached to produce cathode copper from a solvent extraction-electrowinning facility.

As of the end of March Mills had $18.1 million in cash.

Boliden was incorporated in April 1997 under the Canada Business Corporations Act and spun off as a publicly traded company two months later.

Its parent company, Trelleborg, is based in Sweden.