Collahuasi hobbled, Kenbridge converted

A motor problem has forced the temporary shut down of the No. 3 semi-autogenous grinding mill at the Collahuasi open-pit copper mine in northern Chile.

Falconbridge (FL-T), which has a 44% stake in the world’s fourth-largest copper mine, says the problem was discovered during regular maintenance.

The operation’s two remaining grinding circuits continue to operate, and have the concentrator running at about 65% of design capacity. The cathode plant also continues to operate normally.

Falconbridge figures the shutdown will cut its share of copper from the operation by about 9,000 tonnes to 211,000 tonnes during 2005. In 2004, Falconbridge took home 205,116 tonnes of copper concentrates and cathode.

Collahuasi comprises two high-altitude porphyry copper deposits, Ujina and Rosario, close to the border with Bolivia. At the end of 2004, proven reserves amounted to 310.5 million tonnes running 1.1% copper; another 1.5 billion tonnes of probable reserves grade 0.9% copper. An additional 480 million tonnes of measured and indicated resources average 0.6% copper.

London-based Anglo American (AAUK-Q) also owns a 44% stake in Collahuasi; a group of Japanese companies led by Mitsui & Co owns the remaining 12%.

In other news, Falconbridge has swapped its 97% stake in Kenbridge Nickel Mines for 1.5 million units of Blackstone Ventures (BLV-V). Each unit includes one share plus a 2-year warrant good for another share at 75 apiece for the first year, and $1.25 per share during the second year. The deal would boost Falco’s holding in Blackstone to 15.3%, assuming all of the warrants are exercised.

Under the deal, Blackstone inherits the Kenbridge property, about 70 km east-southeast of Kenora, Ont., along with 50 patented mining claims in the area.

The Kenbridge property is home to a partially developed nickel-copper deposit, which remains open at depth and along strike. A $600,000 program of 2,000 metres worth of diamond drilling and UTEM geophysical surveying is underway.

Limited work in the 1950s by Falconbridge resulted in an estimated mineral resource totalling 2.7 million tonnes grading 1.05% nickel and 0.5% copper to a depth of around 600 metres. Another 594,000 tonnes of inferred resource below 600 metres was pegged at 1.6% nickel and 0.9% copper. The estimates do not conform to National Instrument 43-101 standards.

The property has not been subject to nickel exploration since Falco ceased work in 1958.

The news from Collahuasi sent shares in Falco down $1.09, or 2.6%, to 41.01 in late afternoon trading in Toronto on April 14; Blackstone was of 9.5, or nearly 20%, at 40 in Vancouver.