EXPLORATION ROUNDUP — Cyprus benefits from Zambian privatization

Ongoing drilling has enabled Cyprus Amax Minerals (CYM-N) to outline a preliminary resource for the Kansanshi copper deposit in Zambia.

The project — the first to have been awarded to a Western mining company following the privatization of Zambia Consolidated Copper Mines (ZCCM) — is believed to contain between 100 and 200 million tons grading 1.5% copper.

Cyprus Amax is earning an 80% interest in the project and, to date, has drilled 36 holes, though assays for only 18 have been recieved. Oxide intercepts average 2.5% copper; sulphide intercepts, 1.3%.

Significant infill drilling is required to confirm the preliminary resource, says Michael Rounds, director of communications for the Englewood, Colo.-based company.

Prior to Cyprus’ earn-in, Kansanshi had a known resource of 24 million tons grading 3% copper.

The 1997 drill program is expected to total 20,000 metres. The drill data, along with information gleaned from airborne geophysical surveys, are being incorporated into a prefeasibility study.

Primary mineralization occurs as disseminated chalcopyrite and bornite in graphic schists, dolomitic sandstones and quartzites. Secondary mineralization occurs as supergene enrichment, producing chalcocite, covellite, cuprite, chrysocolla, malachite and azurite. The deposit contains minor amounts of cobalt and gold as well.

To earn its interest, Cyprus paid US$3 million up front and is required to spend US$5 million on exploration in the first year. The next phase calls for a further payment of US$10 million and a US$15-million drill program to produce a feasibility study.

If Cyprus makes a production decision, it must make a final payment of US$15 million, bringing the total cost of the acquisition to US$48 million. ZCCM would retain a 20% carried interest.

Cyprus Chairman Milton Ward says there is significant potential for discoveries, given that much of the 7,487-ha property remains untested.

In the meantime, ZCCM is proceeding with the privatizations of other copper assets, having recently sold the Nkana-Nchanga mining complex to the Kafue consortium.

The consortium is led by South African-based AVMIN, followed up by Noranda (NOR-T), Phelps Dodge (PD-N) and United Kingdom-based Commonwealth Development.

No financial figures for the sale were disclosed.

Meanwhile, Robert Friedland’s Ivanhoe Capital has acquired an 85% interest in the Chamishi copper mine, north of Kitwe. The remainder is held by ZCCM.

Reserves stand at 33.5 million tonnes grading 2.5% copper. West of the main orebody is an additional resource of 47 million tonnes of 2.3% copper, and to the southeast is an additional 70 million tonnes of 2.6% copper and 0.13% cobalt.

Chambishi produced 2.5 million tonnes per year until it closed in 1987.