Former Ugandan cobalt producer attracts attention of Banff Resources

Preparations are under way to resuscitate the Kilembe copper-cobalt mine in Uganda.

Banff Resources (VSE) can earn a 65% interest in the former producer from the Ugandan government by completing a feasibility study and arranging financing for production. The government retains the right to buy back a 14% interest at “fair market value.”

Between 1956 and 1976, Falconbridge milled 18 million tons of copper-cobalt ore grading 1.95% copper. Only copper was produced, although about 1 million tons of concentrate grading 1.4% cobalt were stockpiled at the nearby town of Kasese.

A major Australian company owns rights to the stockpile and is studying the feasibility of constructing a refinery at the site.

Construction of a cobalt refinery at Kasese would be a boon to Banff’s objective of outlining an economic cobalt-copper deposit at Kilembe.

The remaining resource at the Kilembe mine is estimated at 4 million tons grading 1.7% copper and 0.17% cobalt.

Six stratiform, copper-cobalt deposits make up the Kilembe within a broad synform which has been truncated into a series of steeply dipping fault blocks. The blocks move vertically, such that ore horizons are developed at different levels across the synform, extending for about 10,000 ft. on strike and about 6,000 ft. vertically.

Copper mineralization occurs primarily as chalcopyrite, while cobalt occurs with pyrite.

Banff plans to delineate additional reserves in the footwall, where copper grades drop off and cobalt grades remain strong. Falconbridge operated at a 1% copper cutoff and, as a result, left the pyrite-cobalt rich footwall.

Banff reports cobalt grades of up to 2% in the footwall, over thicknesses ranging from 10 to 50 ft.

After upgrading roads to gain access to the tracked portals between the 4,500-ft. and 6,800-ft. levels, Banff plans to begin underground drilling.

Surface drilling, to test the Nkenda area about 3.5 miles east of the mine, is also scheduled. The Nkenda is one of four prospects identified as exploration targets by a United Nations program in 1993.

Louie Mikulic, president of Banff, expects to spend about US$1 million on the initial program of drilling and surface work. The company currently has about $500,000 in working capital and 5 million shares outstanding on a fully diluted basis. Several interested parties are being approached regarding further funding.