MINING IN CHILE — Collahuasi project at feasibility stage

That the Collahuasi copper project in northern Chile will be large is a given, but equally huge is the impact it will have on the three partners involved.

For example, the one-sixth interest of Noranda (TSE) will more than double the resource giant’s current copper reserves, according to President David Kerr.

The property, sitting at an elevation of 4,500 metres, contains a preliminary reserve of about 1.75 billion tonnes

of low-grade mineralization. Startup is targeted for 1998 and operations will last at least 50 years.

Noranda’s stake in the project is through its 50% ownership of Falconbridge which, along with Shell and Mantos Minorco, has a one-third interest. “The Collahuasi project will require a total investment of about US$1.3 billion,” Kerr told shareholders at this year’s annual meeting. “It will utilize open-pit mining to recover 300,000 tonnes per year of copper concentrate. We expect that Collahuasi will be very competitive, ranking in the lowest quartile of world costs.”

Potentially the third-largest copper mine in the world, Collahuasi is expected to have a cash operating cost of US50 cents per lb. in its early years.

The property originally belonged to Falconbridge, which sold a one-third interest to each of Shell and Chevron in 1985. Seven years later, Chevron sold its interest to Mantos Minorco for US$190 million.

The property hosts two deposits, Rosario and Ujina, situated 10 km apart. The former contains 1 billion tonnes grading 1% copper whereas the latter hosts 150 million tonnes of secondary-enriched chalcocite ore grading 1.7% and is underlain by 600 million tonnes of primary material grading 0.8%. At a mining conference in Miami, Fla., this year, Noranda Minerals Senior Vice-president Lance Tigert outlined the mine plan for the first 30 years, which includes the following:

n About 160 million tonnes of sulphide ore grading 1.6% copper and 25 million tonnes of oxide ore grading 1.2% will be mined from the Ujina deposit over eight years. Annual copper output is projected to be 350,000 tonnes in concentrate and cathode during this period.

n Mining will then move to the Rosario deposit, where 485 million tonnes grading 1.1% will be mined, along with oxide ore.

n The initial mining rate will be 60,000 tonnes per year using a flotation concentrator, and 50,000 tonnes per year via a solvent

extraction-electrowinning (SX-EW) plant.

A prefeasibility study for Collahuasi was completed in 1993. A full feasibility study is under way and scheduled for completion by mid-1995.