MINING IN MEXICO — Baja Peninsula project — Curator, Coeur

With formal title to the Boleo concessions in hand, International Curator Resources (VSE) and Coeur d’Alene Mines (NYSE) are proceeding with exploration and development.

Initial work on the property, which is on the Baja Peninsula at Santa Rosalia, Mexico, will include diamond drilling, metallurgical testing and preliminary mine design.

Curator has the right to acquire up to a 100% interest from a Mexican company through three payment options.

The least expensive option gives Curator the right to buy a 10% interest for staged payments totaling $1.2 million to Feb. 15, 1995, plus $20 million for the remaining 90% interest.

The vendor retains a 3% net operating interest during the first three years of production, 9% for the next three years and 18% thereafter. Coeur d’Alene can earn a half interest from Curator by spending US$6 million, largely on exploration, or by completing a bankable feasibility study, whichever comes first.

From the late 1800s to the mid-1900s, more than 13.6 million tonnes grading 4.81% copper and an estimated 0.12% cobalt were produced from the huge, flat-lying, sediment-hosted deposit.

The companies are looking at mining ore blocks next to the old mine workings where copper grades did not meet the 3% cutoff of the time.

Proven, probable and possible reserves in three separate areas are estimated at 12.1 million tonnes grading 3.32% copper and 0.10% cobalt over an average width of 1.2 metres.

Coeur d’Alene has committed to spend US$1.2 million on the project by July 31, 1994.

Initial work will focus on the San Guillermo area, which has the most detailed drill information. Proven and probable reserves are here estimated to be 4.8 million tonnes grading 2.9% copper over an average width of 1.9 metres.

Curator President Michael McInnis said the joint venture has already extracted four 50-kg samples from different areas of San Guillermo for metallurgical testing.

He said the joint venture hopes to have a flow sheet by the end of January. Metallurgical work will include tests on the material’s heap-leachability. The second component of the current phase of work includes preliminary studies on thin-seam mining methods.

The study will include drifting a few hundred metres on the deposit to study the characteristics of both the mineralized bed and the hangingwall. One potential extraction technique being studied by the group is the use of longwall coal mining methods, which would be much more economical than more conventional techniques.

In addition to the metallurgical and mining studies, the joint venture plans to drill 25 holes to confirm copper grades and obtain a cobalt grade for the San Guillermo area.

The program will include infill drilling, as well as a few holes in some of the old workings to test the backfill grade.

The previous mining operations removed only the highest-grade portion of the bed and reportedly used low-grade material (less than 3%) as backfill. The grade of the backfill could therefore have a positive impact on reserves, considering the historic mining tonnage.

McInnis expects the initial phase of work to be completed by early next year, at which point the companies will decide on their next step.