Cominco eyes Southwestern’s Peruvian properties

South of the ancient Peruvian city of Cuzco, Cominco (TSE) will work to acquire half of a zinc-lead play currently owned by Southwestern Gold (TSE).

To earn its interest in the Accha property, Cominco must complete drilling, produce a bankable feasibility study and pay Southwestern US$1.25 million a year for four years (including US$100,000 upon signing).

If a production decision is made, Cominco, as operator, would be able to increase its stake to 70% by paying another US$5 million.

The Main zone, consisting of high-grade outcrops, is estimated to contain 5 million tonnes grading 20% zinc and 3% lead. The agreement calls for Southwestern to receive a bonus of US$2.5 million should the number of minable tonnes exceed 10 million.

An initial 1,500-metre drill program will be carried out.

Southwestern is the third-largest holder of mineral properties in Peru, although Accha is its only zinc property.