Minco adds to Chinese projects

Minco Mining & Metals (MMM-V) has signed two co-operation agreements with a large Chinese base-metal producer, Baiyin Non-Ferrous Metals (BNMC), covering a pair of base metal projects in China’s north-central Gansu province.

Under the first agreement, Minco can earn a 75% interest in the Changba-Lijiagou zinc-lead property, which comprises three deposits: Lijiagou, which has resources of 13.5 million tonnes grading 11% zinc and 1.9% lead; Changba, with resources of 10.1 million tonnes of 9.6% zinc and 1.9% lead; and the “Joint Area” with 10.5 million tonnes of 12.2% zinc and 2% lead.

Minco can earn its interest in Changba-Lijiagou by developing a 3,500-tonne-per-day underground mining operation at the site.

For its part, BNMC will be contributing the three deposits,

3,500-tonne-per-day mill, a tailings-disposal site and related infrastructure.

Using BNMC’s 120 diamond-drill holes and a 6% zinc cut off grade, consultant MRDI Canada recently confirmed the Lijiagou’s resource estimate. Resource estimates for the other two deposits have yet to be confirmed.

The deposits exhibit sedimentary-exhalative mineralization contained within three steeply dipping sulphide lenses that attain a maximum horizontal width of 40 metres.

The Lijiagou deposit remains open at depth and along strike to the east.

The Changba open-pit mine — which is the on-strike extension of Lijiagou, situated 2 km to the west — was exploited from 1988 until this year at a daily rate of 1,500 tonnes. Concentrate was shipped 400 km by truck and rail from the mill to BNMC’s lead-zinc smelter.

Under terms of the second agreement with BNMC, Minco can earn an 80% interest in a venture dubbed the “White Silver Mountain project” — an area surrounding both producing and past-producing polymetallic

volcanogenic-massive-sulphide (VMS) deposits near the city of Baiyin.

The company can earn its interest by funding all exploration work and completing a prefeasibility study on any one discovery. After that, any feasibility study and associated development costs will be covered 80% by Minco and 20% by BNMC.

Minco’s agreement area covers the strike and dip extensions of the Xiaotieshan deposit, but not the producing Xiaotieshan mine itself.

A recent diamond drill hole that tested the down-plunge extension of the main lens, which is 375 metres below the mine’s deepest level, intersected 8 metres (true width) of 2.1% copper, 9.7% zinc, 5.6% lead, 4.7 grams gold and 120 grams silver per tonne.

The Xiaotieshan mine began production with reserves of 10.7 million tonnes grading 1.1% copper, 3.3% lead, 5.1% zinc, 2.1 grams gold and 100 grams silver. The current 750-tonne-per-day operation has six developed levels extending 400 metres below surface.

The Xiaotieshan property has a 12,000-tonne-per-day copper concentrator formerly used for an open-pit copper operation, a 1,500-tonne-per-day lead-zinc concentrator and 50,000-tonne-per-year lead and zinc smelters.

The property is linked by rail to BNMC’s main lead-zinc-copper smelter complex 14 km away, in Baiyan.

Minco anticipates that, if needed, favorable custom milling and smelting arrangements can be established with BNMC.

Other producing properties in the region include the Zeyaoshan and Huoyanshan copper-gold deposits, now supporting a 3,000-tonne-per-day underground mining operation, as well as the polymetallic Sigehuan and Tongchanggou deposits.

Minco has also reported that for the nine months ended Sept. 30, 1997, the company suffered a net loss of $935,986 (or 6 per share) compared with a net loss of $820,129 (8 per share) for the same period in 1996.