RTZ Minerals, a wholly owned subsidiary of the traditionally conservative Rio Tino Zinc PLC of London, has signed an option agreement with CNM of Brazil to earn a 40% interest in a platinum/ paladium property in northeastern Brazil.
Ian W. Telfer, president of TVX Mining Corp. of Toronto, which holds a 49% interest in CNM, tells The Northern Miner RTZ has agreed to spend $15 million(US) for the interest and can buy an additional 20% at a fair market price when a feasibility study is produced.
“Exploration crews sampled the property in July and were so impressed they are now gearing up to start drilling the property,” Mr Telfer says.
Under the terms of the agreement, RTZ must finance the project to production to retain its interest. In other TVX news, gold production should start before the end of the year on a placer project being operated by Osborne & Chappel. TVX has a 34% interest in the medium-sized (10,000-oz-per-year) project.
Production should also start in the fourth quarter of next year on a heap leaching project located two hours from Brazilia, the capital of Brazil. This 100,000-oz-per-year project will be operated by RTZ Minerals. The total capital cost of the project is $60 million. To finance its share, TVX has had to surrender part of its interest which could end up in the 20% range.
Autram, the other joint-venture partner, signed a letter of intent for $10 million(US) in project financing with Bankers Trust of New York in late August. Autram and TVX jointly own CNM.
Another Brazillian affiliate of TVX, called CMP was listed on the Rio Stock Exchange in August at an equivalent of about 80 cents a share. It has about 107 billion shares outstanding of which TVX holds 15%. CMP operates a 40,000-oz-per-year gold mine at Novo Astro.
TVX trades on the Toronto exchange at about $1.60 a share.
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