The Vancouver-based major can earn a 60% interest in General Minerals’ Productura copper-gold project, with an option to include the Pajaritos and San Antonio properties.
Over a 5-year period, Teck is to spend US$5 million exploring Productura. At least US$750,000 must be spent through the end of June 1999. Each year thereafter, the company is to spend US$500,000 as well as pay land-holding fees.
After it produces a prefeasibility study, Teck has three years to complete a bankable feasibility study and arrange project financing. Teck hs also agreed to fund General’s share of the financing, which would be repaid through cash flow from the operation.
Productura covers 12,673 ha southwest of the city of Vallenar in Chile’s Region III.
Previous drilling encountered mineralization along a strike length of 1.6 km. General Minerals hit a 72-metre interval grading 0.6% copper in drilling early in 1998, and 13 years earlier, the Chilean Nuclear Commission hit 33 metres grading 0.97% copper near the surface while searching for uranium.
The copper mineralization is stratabound and associated with gold, molybdenum, cobalt, uranium and rare earth elements. The geologic setting, alteration and mineralization are similar to the Candelaria copper-gold mine, north of Copiapo, which is operated by Phelps Dodge.
General and Teck plan to begin exploration with an induced-polarization survey, followed by reverse-circulation drilling in a previously defined alteration zone measuring 3 by 7 km. As project operator (until year-end), General Minerals expects to drill 10 holes in a 3,000-metre program.
“This joint venture allows us to proceed rapidly with another drilling program at Productura and to finance our interest through production,” says Ralph Fitch, president of General Minerals.
According to the agreement, Teck has the right, until the end of June, to included either the 3,100-ha Pajaritos property or the 3,300-ha San Antonio property, or both. The two share a similar geologic environment with Productura.
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