Rio Narcea expands in Spain

Subject to final approval by Spanish authorities, Rio Narcea Gold Mines (RNG-T) has exercised an option to acquire the Aquablanca nickel-copper-platinum group metals project in that country’s Extremadura province.

The gold producer picked up the project from Atlantic Copper and the Spanish government after completing a due diligence review that included metallurgical tests, drilling, geotechnical studies, and the re-logging and re-assaying of considerable core.

Rio Narcea also examined a mine plan based on a 10-to-12-year, open-pit operation producing about 7,000 tonnes of nickel per year, with copper and platinum-group-metal byproducts. The company now plans to carry out an infill and deep drilling program to support a bankable feasibility study, scheduled for completion in early 2002. If results are positive, commercial production could begin as early as 2003. The work program and feasibility study will be funded by a $4-million debenture arranged with Deutsche Bank.

Rio Narcea produces gold from its El Valle and Carles mines, both of which are in northern Spain’s Asturias province. Last year, the company cranked out 97,106 oz., down from 103,785 oz. in 1999. Cash costs rose to US$202 per oz. from US$185, owing to increased smelter and transportion costs. Production is expected to increase this year as higher-grade zones at El Valle enter production.