LATIN AMERICA — Reserves boosted at Lomas Bayas

Based on about 30,000 metres of additional drilling, Westmin Resources (WMI-T) has reported an increase in geological reserves and resources for the Lomas Bayas copper project in northern Chile, 110 km northeast of the coastal city of Antofagasta.

Construction of the open-pit, solvent extraction-electrowinning operation (SX-EW) is about 40% complete and on budget for a June 1998 startup. The deposit is situated in the Atacama desert at an elevation of 1,500 metres.

The new reserve and resource picture at the Chilean project has Westmin optimistic that the operation can be expanded in the years ahead. The company cautions, however, that the new figures are preliminary and that the feasibility study has yet to be revised. However, the figures are based on a US$90-per-lb. copper price and the same operating cost and recovery assumptions as outlined in the feasibility study.

The latest preliminary estimate of proven and probable geological reserves is 479.1 million tonnes grading 0.33% copper, up from 289.6 million tonnes grading 0.35% copper contained in the original 1996 feasibility study.

The 1997 preliminary calculation for geological resources is 566.4 million tonnes of 0.35% copper, up from 395.2 million tonnes grading 0.37% copper in the 1996 study.

These figures raise the preliminary estimate for both resources and reserves at Lomas Bayas to 922.4 million tonnes of 0.32% copper, up from 865.4 million tonnes of 0.32% copper in the previous calculation.

Westmin says the copper contained in proven and probable geological reserves increased by 55% to 3.5 billion lbs., whereas that contained in proven and probable resources increased by 37% to 4.38 billion lbs.

The amount of recoverable copper will not be known until metallurgical testwork is complete, though the expectation is that about half of the increase in contained copper will be recoverable.

The upgrading achieved a reserve increase of 189.5 million tonnes grading 0.29% copper. The stripping ratio for the expanded pit, at 0.29 tonne of waste for each tonne of ore, is lower than that projected for the original pit. Westmin believes the ratio could be reduced further still by converting some of the possible resources (now classified as waste) to the category of proven and probable.

Additional metallurgical work to determine minable resources for the expanded Lomas Bayas pit is ongoing but will not be completed until mid-1998 (as part of a new feasibility study to expand production). The original study predicted that cash production costs would be about US$50 per lb. of copper produced over the life of the mine. Costs would be lower in the early years.

At the same time, Westmin intends to carry out 40,000 metres of drilling, with associated metallurgical testwork, on the adjoining Fortuna de Cobre property.

This program is designed to upgrade resources, last reported at 322.4 million tonnes grading 0.37% copper, to proven and probable status. Westmin notes that material from Fortuna can be leached faster than Lomas Bayas ores.

Because of these favorable metallurgical characteristics, Westmin believes the deposit has potential for expansion in conjunction with the new Lomas Bayas reserves.

The original study estimated that total capital costs for Lomas Bayas would be US$244 million. A fixed-price, turn-key engineering, procurment and construction contract was signed with Fluor Daniel Wright and its Chilean subsidiary.