Inco holds interests in wide portfolio of properties

Realizing that there are other prolific areas for nickel and copper mineralization outside Canada, nickel-producing giant Inco (TSE) has acquired interests in a number of international projects.

Inco, while not aggressively searching in South or Central America as much as other senior companies, nevertheless does hold a few interesting properties and ventures there.

Late last year, the company reached an agreement with Corporacion Nacional del Cobre del Chile (Codelco) to explore for copper at the Mamina property in northern Chile.

The Mamina is near the Cerro Colorado copper porphyry deposit. Exploration is set to start this month, with plans calling for the company to spend between $5 million and $10 million on the first stage of exploration. If all goes well, Inco will construct a mill in the latter part of 1998 or early 1999 with an initial capacity of 80,000-90,000 tons of copper concentrates per year.

In addition to the Mamina exploration project, Inco has another joint venture with Codelco — to manufacture mining equipment. The plant, which manufactures innovative mobile equipment for underground mining, was commissioned last October. Initially, the equipment will be sold in Chile, but Inco plans to market it internationally.

Inco also has significant geologic resources in both Guatemala and Brazil. Although its 70%-owned Eximbal mining and processing facilities in Guatemala have been mothballed, the project has a proven nickel resource of 75 million tons averaging 1.83% nickel. As well, it has a design capacity of about 25 million lb. nickel matte annually. Before mining and processing operations can resume, appropriate market conditions and significant expenditures will be needed to bring the project up to speed.

In Brazil, the company holds an interest in the Barro Alto, which contains a geologic resource of 65 million tons averaging 1.72% nickel, and an interest in the Onca Puma, with 17 million tons averaging 2.17% nickel. Both projects are inactive.

In addition to South and Central America, Inco has been exploring around its mining operations in Ontario, Manitoba and Indonesia. In 1993, the company spent a total of US$32 million doing so. The ultimate goal of the exploration is to provide enough nickel reserves at each of these operations to allow for a minimum of 40 years’ production.

Inco’s largest non-Canadian base of operations is in the southeastern Pacific. Realizing that a significant portion of its growth will come from low cost-lateritic deposits, Inco is concentrating efforts in this humid and tropical region where such deposits are found.

Inco owns 58% of P.T. Inco in Indonesia. The subsidiary owns several plants, refineries, smelters, concentrators and rolling mills. Here, the company has completed detailed exploration on the Pomalaa deposit where it has outlined a total resource of 162 million tons of laterite grading 1.83% nickel. Of this resource, at least 55 million tons grade 1.9% nickel and constitute a minable reserve.

At the Goro property in New Caledonia, a bulk sample was taken for miniplant extraction trial tests. The deposit has a geological resource of 165 million tons averaging 1.57% nickel.

In Sudbury, Ont., the company produces nickel, copper, cobalt and precious metals from nine mines on the rim of the Sudbury structure. Inco is exploring for new reserves at the Victor deposit on the northeastern part of the structure and the McCreedy East deposit on the northwestern part of the rim. In 1991, a 3-hole-deep drill program at the Victor intersected grades ranging between 1.5% and 2.6% nickel, 5.1-7.4% copper and 0.2-0.5 oz. per ton platinum, palladium and gold over intervals ranging from 198.5 to 253.4 ft. Inco is planning to spend $60 million on a drill program to delineate reserves further at the Victor. These currently stand at 22-44 million tonnes. In 1993, a significant discovery was made near the Whistle mine, also in Sudbury. A drill intersection returned values of 3.87% copper, 0.29% nickel and 0.088 oz. per ton of precious metals over 184.6 ft., including a 32.7 ft. section that ran 12.1% copper, 0.19% nickel and 0.255 oz. precious metals. In Manitoba, Inco operates three mines that make up its Thompson division. Here, the company has a mill capacity of 15,000 tons per day but operates at about 10,000 tons per day. At this rate and with the reserves on hand, the company expects the mine life to be about 20 years.

In Thompson, Man., Inco is exploring for reserves in three key areas. Following the discovery in 1992, Inco is continuing exploration of two high-grade zones near the Pipe mine, found between 2,400 and 3,600 ft. below surface. Based on results from the 1993 exploration program, Inco is encouraged and hopes to outline significant tonnage.

In addition, underground drilling has been completed on the 1-D deposit, part of the Thompson mine. By doing so, the company has added tonnage below the 4000 level, and 400 ft. farther south than originally thought. Currently, Inco’s Canadian reserves are 384 million tons of nickel-copper ore containing 5.4 million tons of nickel and 3.8 million tons of copper. As well, these reserves contain gold, silver and platinum group metals. Proven and probable reserves at P.T. Inco are 86 million tons containing 1.6 million tons of nickel.

In the second quarter of this year, Inco lost an additional US$6 million, compared with US$2.2 million in the second quarter in 1993. Revenues fell from US$604 million to US$590 million.

The reason for the drop in revenue was a decrease in the average nickel price from US$2.93 to US$2.86 per lb.

For the first 6-month period, Inco lost US$67.6 billion on revenue of US$1.1 billion, compared with a loss of US$24.8 billion on revenue of US$1.2 billion.