Cominco Resources still in the red

The company’s third-quarter loss was $2.4 million, bringing the loss for the nine months ended Sept 30 to $8.1 million or 22 cents per share. Exploration and development costs reached $21.3 million for the 9-month period.

The company has advanced projects, however. For example, Cominco Resources recently secured a bid to participate (to 42.5%) in the development of the Quebrada Blanca copper deposit in northern Chile. Production of cathode copper could begin as early as 1993 to average 44,000 tons per year for more than 15 years. Also in Chile, the company owns 25.7% of the Marte gold mine where gold production is forecast to reach up to 100,000 oz per year fo r at least 10 years. Although full production at the heap leach operation was delayed by equipment failures, Cominco Resources expects that full throughput will be achieved by year-end.

Less than five miles from Marte, the company is nearing completion of a definition drill program at the 50% owned Lobo gold deposit. Inferred tonnage is now estimated at over 50 million tons grading 0.045 oz, plus an additional 10 million tons at 0.08 oz.

Ferronickel production began in August at the 50% owned Glenbrook Nickel smelter in Oregon. Revenue for initial shipments of nickel was $385,000 for the third quarter while direct operating costs amounted to $298,000. With reconstruction 90% complete, nickel production is expected to reach one million pounds by the first quarter of 1990.

The company’s share of gold production at the 76.4% owned Buckhorn mine in Nevada amounted to 6,984 oz for an operating profit of $290,000. Mining reserves at the end of the third quarter were 850,000 tons grading 0.051 oz.

Exploration drilling on the property was successful in identifying only small tonnages of new oxide ore. However, the company said ongoing exploration will continue to be a high priority.

The driving of a decline at the 49% owned Maria copper deposit in Mexico is continuing in order to access drill-inferred reserves of 850,000 tons grading better than 10% copper. The company anticipates up to 10,000 tons of copper production per year from the deposit. Production could begin in 1990.

Detailed reserve calculations, metallurgical testing and prefeasibility studies are under way at the 100% owned Mariquita copper project in Mexico. Upon completion of a feasibility study, the company will be required by Mexican law to sell 51% of the project to Mexican partners.

Drilling at Sheep Creek, a 50% owned copper bet in Montana, created some excitement earlier in the year with intersections in the order of 5-6% copper over widths greater than 10 ft. Subsequent drilling showed the mineralized structure to be somewhat complicated and more drilling will be necessary. The company noted, however, that preliminary results from metallurgical testing show copper recoveries will be satisfactory.

Other areas of activity for the company include drilling on a wollastonite deposit in Mexico and exploration of various properties in Turkey.

As at Sept 30, Cominco Resources had working capital of $28.8 million, long-term debt of $5.2 million, and 40.5 million shares outstanding.

]]>