Partners boost resource at Antamina

Toronto-based Rio Algom (ROM-T) and Inmet Mining (IMN-T) have upped the resource estimate for their jointly held Antamina copper-zinc project, 480 km north of Lima, Peru.

Results from the first 61 holes, representing 21,000 metres of new drilling, indicate a minimum resource (within a pit) of 400 million tonnes grading 1.2% copper, 1.1% zinc and 0.03% molybdenum, plus 13 grams silver per tonne. Measured and indicated resources total 200 million tonnes grading 1.3% copper, 1.1% zinc, 0.03% moly and 15 grams silver.

With a reserve of 200 million tonnes and a daily milling rate of 40,000 tonnes, the partners expect annual production to approach 650,000 tonnes of copper concentrate and 350,000 tonnes of zinc concentrate over a 15-year mine life. Cash operating costs are projected at US40-50 cents per lb. copper (net of byproduct credits).

The property lies in a scenic, glaciated mountain valley measuring 4 km long by 1 km wide at an altitude of 3,600-4,200 metres.

Currently 220 people are working at the site, where 10 drills are turning. So far, 100 holes have been drilled at 70-metre intervals, with another 200 holes, representing 60,000 metres, expected to follow. Construction is under way on a 200-metre, inclined shaft for bulk-sample collection, with a full-scale, 200-tonne pilot-plant program planned for June. The partners expect to increase their resource estimate later this year.

A skarn deposit, the Antamina hosts both disseminated and veined sulphide mineralization in the form of chalcopyrite, sphalerite and pyrite. There is one phase of mineralization, with the silver tending to follow the copper.

The deposit, discovered in 1873, was last subjected to a feasibility study in the early 1980s, when Romanian state-owned Geomin delineated a resource of 126 tonnes with grades similar to current values. However, the 140 drill holes that generated the Geomin estimate were only drilled to depths of about 200 metres, in comparison with the 750-metre depths now being reached by Rio and Inmet. Furthermore, these previous holes were not angled to drill beneath a prominent glacial lake in the valley, where Rio and Inmet have delineated significant additional resources since winning the bid for the property last summer.

The core of the skarn deposit appears at surface and, being of higher grade than the limbs of the deposit, could serve as the target for a starter pit.

The overall waste-to-ore ratio is estimated to be as high as 4.4-to-1, but the partners expect the figure to fall to 3-to-1 as more resources are upgraded to the reserve category.

Though the partners initially envisioned pit walls to be set at 45 angles, they hope to be able to increase this steepness, as nearby mountain faces are stable at 60 angles and are described as being composed of competent rock.

Bench metallurgical tests indicate recoveries of 95% for copper and 85-90% for zinc, with good separation between the copper and zinc. The dilution factor has been estimated at 15%, a figure the partners call conservative.

Plans call for a slurried concentrate to be shipped via a 200-km pipeline to the Pacific port of Huarmey, 160 km north of Lima. It remains to be decided whether there will be separate lines for the copper and zinc concentrates.

The site still needs to be hooked into an electrical power substation, 175 km to the north, and into a natural gas pipeline. Also, about 50 km of roads must be built or improved, and a hydroelectric power dam will likely be constructed on the Maroum River, 30 km away.

Rio and Inmet are proceeding with a full feasibility study and have let out a tender to five engineering and construction contractors, with the selection scheduled for early April 1997.

Additional studies are being carried out to determine the costs and benefits of milling rates greater than the 40,000 tonnes per day under consideration at the time of the bid.

Capital investments, first estimated at US$1 billion for a

40,000-tonne-per-day milling operation, are now estimated at US$1.3-1.4 billion for 60,000 tonnes per day. Capital investments in this case are broadly defined to include capital interest and corporate costs.

The partners are committed to either investing a total of US$2.5 billion before Sept. 6, 2001, or paying 30% of the unspent investment to the vendor, Centromin Peru.

Rio and Inmet each hold a 50% interest in Minera Antamina, which owns the property. Total expenditures to date exceed US$12 million, on top of the US$20 million purchase price. Bid conditions require a minimum expenditure of US$13.5 million prior to Sept. 6, 1998.