Cambior shifts to base metals with U.S. acquisition

Gold producer Cambior (TSE) has made a move into the base metal field south of the border by acquiring a company with copper prospects in Arizona, Idaho and Nevada.

A wholly owned subsidiary, Cambior USA Inc., paid US$10 million to Costain Minerals for 100% of the shares of Westmont Mining, whose property portfolio includes the Carlota copper project.

The deal calls for Cambior USA to pay an additional US$5 million should Carlota enter commercial production.

Accessible by road and 4,000 acres in size, Carlota is situated in the Miami region of Arizona. Cambior said the property contains four copper-oxide deposits with proven and probable mining reserves of about 53.7 million tons grading 0.45% copper. (A minimum grade of 0.15% was used to calculate that tonnage.)

An open pit, heap leach operation is envisaged for Carlota, with recovery by means of solvent extraction and electrowinning.

A prefeasibility study, Cambior said, estimates a capital cost of US$45 million to place the project into production. The mining rate would be five million tons per year with an average waste-to-ore ratio of 2.35-to-1. An 11-year mine life has been calculated, based on annual output of 19,000 tons (38 million lb.) copper. The estimated operating cost is 61 US cents per lb. Cambior figures its total cost, including the additional payment for attaining commercial production, will be US$73 per ton of recoverable copper. Cambior expects a feasibility study for Carlota will be completed in 1993. The Val d’Or, Que.-based company named Alex Bissett as senior vice-president of Cambior’s American operations (including Carlota and Valdez Creek in Alaska). Raynald Vezina becomes vice-president of the company’s Canadian operations and Jean Boissonnault becomes the company’s senior vice-president of exploration.

For the first half of 1991, Cambior reported higher revenue (up by 20%), increased gold output (up by 33%) but lower net income compared with the same period in 1991.

Gold production during the first six months of 1991 totalled 143,520 oz. The company said an increase in production, mainly at the Chimo, Beauchemin and Silidor mines, and the resumption of mining at the Valdez Creek placer project during the second quarter, helped boost revenue.

Profit margins per ounce have declined this year because of the weakened gold markets and the strength of the Canadian dollar relative to the U.S. currency, the company said.

Through its program of forward sales and gold loans, Cambior is committed to deliver all of its planned gold output during the second half of 1991 at a minimum price of US$416 per oz. Cambior is forecasting total 1991 gold output of 320,000 oz.