Lac enters Irish zinc play with US$70-million deal

Following a global search for new prospects by its business development arm, Lac Minerals (TSE) has agreed to acquire all of Chevron’s mineral interests in Ireland for US$70 million.

The property portfolio includes a 52.5% interest in the Lisheen deposit, near Kilkenny, where reserves stand at 25 million tonnes grading 12% zinc and 2% lead. All the zones on the property remain open and exploration is ongoing. The acquisition represents a major diversification for Lac, which derives most of its revenues from gold production.

Although company officials could not be reached for comment, James Patterson, a Halifax-based consulting geologist who completed his doctoral thesis on Irish base metal deposits called the purchase “a good deal for Lac.” Chevron has been selling off its worldwide mineral interests over the past few years in order to focus its efforts on oil production, its core business. The remaining 47.5% of the Lisheen deposit is held by Ivernia West, a medium-sized Irish company owned 24.3% by Outokumpu of Finland and 17.6% by Minerals and Resources of Luxembourg.

Discovered in 1990 along the Rathdowney trend, Lisheen is a sheet-like sedimentary exhalative (SEDEX) deposit. Lac says Rathdowney compares with other major zinc belts such as the Pine Point belt in the Northwest Territories.

Although the deposit underlies an aquifer that provides the region with most of its water, Patterson says Lac should be able to secure environmental permits for an underground mine. The mineralized body sub-outcrops at about 180 metres below surface.

A feasibility study and an environmental impact statement will be completed by early 1994. Exploration and development work will continue over the next two years.

Ireland hosts one of Europe’s largest base metal mines, the Tara lead-zinc mine, which recently reached an all-time annual production record of 188,000 tonnes zinc in concentrate for owner Outokumpu. Cominco (TSE) is also active in the country, recently agreeing to spend an additional US$2.5 million on a group of licences held by Dublin-based Ennex International.

Although primarily a gold miner, Lac also produces copper and zinc. Earlier this year, the company launched a worldwide search for gold and base metal assets through its newly formed business development group.

Lac also reports that a 1991 drilling program at its Bullfrog gold mine in Nevada has confirmed underground reserves of 3.5 million tonnes, extending the life of the mine by several years. The new underground extension, developed at a cost of US$15 million, has reached a daily milling capacity of 750 tonnes grading 8-10 grams per tonne.