NEWS ROUNDUP (October 14, 1991)

Because of supply disruptions and technical difficulties, zinc metal production at Noranda Minerals’ electrolytic reduction plant at Valleyfield, Que., is expected to be below its 230,000-tonne-per-year capacity.

Production at Valleyfield was reduced earlier in the year by concentrate supply disruptions and more recently by difficulties associated with the startup of the new call house.

Due to the current level of demand, production will be held below capacity for the remainder of this year and the early part of next year, according to Noranda, which expects production in 1991 to be slightly below 200,000 tonnes. The zinc reduction plant at Valleyfield is operated by Canadian Electrolytic Zinc.

Not long after reporting a 27% increase in overall reserves at the Andacollo project, Dayton Mining (TSE) announced that a Swiss-based institution agreed to subscribe for a $2.4-million private placement of promissory notes.

The notes are convertible into common shares at a conversion price of $1.60 per share. The purchaser was also granted an option to buy an additional $320,000 principal amount of the notes.

If the option is exercised, and all notes converted, a total of 1.7 million Dayton common shares will be issued under the transaction.

Dayton’s key asset is its 100% owned Andacollo gold project in central Chile, where total minable reserves were recently upgraded to 30.4 million tons grading 0.034 oz. gold per ton. The company is now arranging financing for its proposed open pit, heap leach mine.

Goldstack Resources (VSE) has entered into an agreement with Monte Carlo Gold Mines (ASE) to earn a 50% interest in Monte Carlo’s gold prospect in Aruba, Caribbean.

Under the agreement, Goldstack will spend $800,000 to start up a 200-ton-per-day heap leach plant to process surface ore dumps and tailings averaging 0.10 oz. gold per ton.

A recently completed feasibility study indicates that production costs will average $174 per oz.

Goldstack is also planning a drill program to locate additional ore and quantify reserves at known deposits in the area.

Monte Carlo says it will sell its Aruba office complex for $537,600 to pay off debt and finance the heap leach operation.

A recent agreement between Falconbridge and 2001 Resource Industries (VSE) and two other junior companies sets the stage for further exploration of the Nick nickel property in the Mayo mining district, Yukon.

Falconbridge can earn a 60% interest in the property by spending $1.5 million over four years, which includes $150,000 to be spent on the 1991 program.

The Nick property is currently owned 25% by 2001, and 25% by associated company, Pak-Man Resources (VSE). The remaining 50% interest is held by NDU Resources (VSE).

During 1988 and 1989, the east end of the property was explored with detailed geological mapping and trenching, geochemical soil sampling and 1,154 metres (3,786 ft.) of diamond drilling in 16 holes.

The Nick mineralization is reported to grade up to 5.8% nickel, and is associated with a distinctive suite of trace minerals. All 16 holes had nickel values ranging from 0.37% to 5% nickel.

The commodity price index of Scotiabank fell by 3.1% in August to its lowest level since mid-1987. Lower metal prices and declining forestry products contributed to the drop.

The metal and minerals sub-index, with base metal prices edging downward and precious metals feeling the pressure of rumored Soviet sales, was off by 1.9% from July and is down by more than 20% from one year ago. The all-commodity index tracks export prices of a variety of Canadian commodities, which are weighted according to their 1984 export values, except crude oil where the value of net exports is used.

Icebound Antarctica will be mining free, at least for the next 50 years, under an accord recently signed by member nations of the Antarctic Treaty.

Meeting in Spain, the countries, including Canada, approved the accord forbidding mining and oil exploration. The exception is any mining project related to scientific research.

Twenty-four of the treaty’s 26 consultative nations (members with full voting rights and scientific bases in Antarctica) and seven non-voting nations signed the accord. More countries are expected to sign the agreement. To revoke the ban after the 50-year period, three-quarters of the consultative members must vote in favor.

The initial Antarctic Treaty came into being in 1961.

Labrador iron ore pellet producer Wabush Mines, hoping to cut its production costs, will let 200 workers go by Jan. 1.

The company will reduce its mining payroll to 700 workers. The Wabush mining operation employs about 500 workers and the Pointe-Noire concentrator (near Sept Isles, Que.) 400 workers. Annual mine production will be decreased to 4.5 million tonnes from six million tonnes.

Hamilton, Ont.-based steel companies Stelco and Dofasco share in the ownership of the Labrador operation with American and Italian interests.