Equinox’s Van Stone resumes production

Eleven months after completing the purchase of the Van Stone zinc-lead mine in northeastern Washington State, Equinox Resources (TSE) has brought the former producer back into production. Van Stone was operated as an open pit zinc mine from 1956 to 1970 by Asarco which sold the property to Callahan Mining in 1972.

Detailed work by Callahan, U.S. Borax and Brinco between 1972 and 1982 resulted in a full feasibility study for a 2,800-ton-per-day underground mine with reserves of 7.5 million tons grading 3.5% zinc and 0.6% lead.

The project never got off the ground and was eventually optioned by Equinox in 1989. After completing a positive feasibility on a smaller reserve, the company exercised its option in 1990, paying a total of US$1.05 million for the property.

Equinox’s study outlined a reserve of 2.5 million tons grading 5.7% zinc and 1.1% lead, giving the mine a life of about eight years based on using the existing 1,100-ton-per-day mill left by the previous operators.

Equinox obtained financing for the project from Cominco and a syndicate of European investors which together provided a total of US$6.35 million. Cominco holds the smelter contract for the mine concentrate which will be processed at the company’s Trail, B.C., smelter about 25 miles to the north.

The financing is comprised of a US$2.35-million term loan from Cominco, and a project investment of US$4 million from the European group. The syndicate is entitled to 70% of the mine’s net revenue after the project loan is repaid and until the US$4-million investment is retrieved. The project then reverts to a 60-40 venture in favor of Equinox.

Equinox expects to complete the mill commissioning and testing period by the end of April and begin full production at a rate of 1,100 tons per day.

During the first three years of the mine life, ore will be mined by open pit while underground mining will be used for the remaining reserve.

The Van Stone mine is projected to produce an average of 32,900 tons of zinc concentrate and about 5,300 tons of lead concentrate per year for a contained metal production of 18,400 tons of zinc and 3,700 tons of lead.

During the first three years, break-even operating costs are projected at below US35 cents per lb. of zinc produced.