Taseko acquires Gibraltar

Taseko Mines (TKO-V), a member of the Hunter-Dickinson group, has completed its acquisition of the now-dormant Gibraltar mine from Boliden (BOL-T).

Gibraltar is a large-scale, 37,000-tonne-per-day open-pit mining and milling operation near the city of Williams Lake in south-central British Columbia. Boliden acquired Gibraltar when it took over Westmin Resources in early 1998. In March 1998, Boliden announced that mining would be suspended as a result of high operating costs and weak copper prices. An attempt by a management-employee group to secure funds to keep the mine operating was unsuccessful, and, by February of this year, the mine had closed completely.

Under the terms of the agreement, Taseko will acquire the Gibraltar mine and to keep it on standby until copper prices improve. Taseko’s subsidiary, Gibraltar Mines, has acquired mining equipment and parts valued at $19 million, as well as a government environmental deposit of $8 million and mineral interests priced at $4.7 million. Gibraltar will also receive a total of $20.1 million in cash over a period of 18 months. Of that, $17 million will be put into a 10-year, non-interest-bearing, convertible debenture issuable to Boliden.

Says Robert Hunter, chairman of Taseko Mines: “The Gibraltar mine will create value for Taseko shareholders, create economic opportunities for the people of Williams Lake region, and enhance the development prospects for Taseko’s nearby Prosperity gold-copper project.”

The acquisition complements the company’s Prosperity copper-gold porphyry project, also near Williams Lake, which is undergoing a $5-million bankable feasibility study. At last report, Prosperity contained proven and probable reserves, minable by open-pit methods, of 631 million tonnes grading 0.254% copper and 0.46 gram gold per tonne. The total resource stands at 1.2 billion tonnes grading 0.24% copper and 0.38 gram gold.

The British Columbia government has guaranteed competitive power rates for the mine, especially during periods of low metal prices.

Under normal operations, Gibraltar produced about 80 million lbs. of copper and 700,000 lbs. molybdenum annually. Taseko estimates current reserves will sustain the mine over another 12 years. A major exploration program will attempt to extend the mine life even further.

Since 1972, annual production at Gibraltar averaged 75 million lbs. of copper in a 28% concentrate, 5 million lbs. of copper cathode from solvent extraction-electrowinning, and 700,000 lbs. of molybdenum-in-concentrate. In total, the mine has processed 290 million tonnes of ore grading 0.35% copper and 0.016% moly.