Placer to pay US$100 million for half of Chilean copper play

Living up to its stated intention to acquire late-stage exploration properties, Placer Dome (TSE) plans to acquire a 50% interest in the huge Zaldivar copper project from owner Outokumpu Copper Resources.

The Zaldivar, in the Atacama Desert of northern Chile, hosts an estimated preliminary reserve in its main zone of 616 million tons grading 0.62% copper. Subject to the completion of a due diligence review, Placer will pay Outokumpu US$100 million for the interest as well as provide financing of up to US$400 million for project development.

Completion of the due diligence review and closing of the deal is scheduled for December.

Placer estimates the main zone contains a high-grade reserve totalling 154 million tons grading 1.2% copper.

In addition, a second deposit was recently discovered less than a mile to the southwest containing an estimated 220 million tons grading 0.62% copper. Both deposits are described as near-surface and largely amenable to leaching, using solvent extraction-electrowinning technology.

With considerable potential for an increase in reserves, exploratory drilling is continuing on the property.

Placer and Outokumpu plan to make a production decision on the project by mid-1993 and expect to be producing cathode copper by mid-1995. No estimates on potential yearly production or costs have been released. Total development cost over an 8-year period is expected to be in the order of US$500 million.