Noranda may drop Caber

Low metal prices are forcing Noranda (NOR-T) to reconsider its participation in the Caber zinc-copper-silver project near Matagami, Que.

The major can earn up to 70% interest in the property from Southern Africa Minerals (sa-t) and has given that company until Jan. 15, 2000, to alter its existing requirements to do so.

Under the current agreement, Noranda must spend $6 million on exploration and invest $2.8 million in Southern Africa over four years to earn a 55% interest; the remaining stake would be acquired in exchange for financing the project to production. So far, it has spent $3.6 million on exploration and invested $1.2 million by way of private placements.

Indicated resources stand at 484,000 tonnes grading 11.7% zinc and 1% copper, plus 15 grams silver per tonne, based on more than 45,000 metres of drilling. A study earlier this year by Noranda suggested the deposit could be mined at a zinc price of US60 per lb. However, a proposed decline to prove up the resource was subsequently postponed, owing to low metal prices.

The Caber North deposit, 2 km to the north, consists of four separate but closely spaced massive sulphide lenses with a combined inferred resource of 2.1 million tonnes grading 4.1% zinc, 1.5% copper and 19 grams silver.

Southern Africa Minerals believes the Caber deposit remains open at depth and notes that several new targets have been identified in the Caber North area. This is partly based on an independent resource estimate by Roscoe & Postle Associates, which concluded that Caber hosts an indicated and inferred resource of about 800,000 tonnes grading 10% zinc, 0.6% copper and 11 grams silver.