Princeton considers reopening Similco mine

Encouraged by recent strength in the price of copper, Princeton Mining (TSE) is considering reopening its Similco mine near Princeton, B.C.

Operations were suspended last fall as a result of the then-weak price. The open-pit mine has entailed considerable production costs, averaging $1.05 per lb. during the past five years.

At the annual meeting, President James O’Rourke said that, if the price holds steady, Princeton intends to resume mining later this year, but with a reduced workforce. The company is holding discussions with various stakeholders and hopes to negotiate new contracts with smelters and with the union representing workers. The devalued Canadian dollar is increasing the potential for reopening, O’Rourke added.

Resumption of mining will also depend on the results of exploration work which began early this year. The program is aimed at outlining a 50-million-ton copper-gold deposit in the so-called Alabama area. Mitsubishi, a major customer of Similco’s concentrates, is partly funding the work. “Results have been extremely encouraging and we have also identified new targets,” O’Rourke said. “We have a large land holding that ties up a metallogenic province.”

Meanwhile, in Chile, Princeton is exploring several copper projects and one gold project. Drilling is planned later this year for the Nancagua play, where six gold-bearing zones have been identified within an epithermal system. Funding is being provided by Agate Bay Resources (VSE), as part of an earn-in agreement.

Exploration of the Rio Lluta porphyry copper target is being funded by Gold Giant Minerals (VSE), which can earn a half interest by financing the next US$1.5 million worth of expenditures. A $33,000 drill program is now under way.

Drilling on the Elenita oxide copper project, near Antogasta, has identified 15 copper-bearing mantos within a sequence of andesitic flow, dipping at 45. About 3.7 million tonnes grading 1.5% copper are indicated and the deposit remains open in three directions and at depth. Teck (TSE) and Cominco Resources International (TSE), combined, can obtain a half interest. On the financial front, Princeton has abandoned its asbestos interests (the company was recovering asbestos fibre from dry process tailings in Newfoundland) and eliminated $30.6 million of debt and liabilities. For the first quarter, the company reported a net loss of $1.75 million, compared with a loss of $3.9 million for the same period in 1993.