AMERICAS — Gibraltar advancing project northeast of

Plans for restarting its open-pit mine at McLeese Lake in east-central British Columbia, as well as ongoing feasibility work on the nearby Mt. Polley project, have not kept Gibraltar Mines (TSE) from advancing its Chilean interests.

Extensive work is continuing on the Lomas Bayas property, 65 miles northeast of Antofagasta. Two drills are turning and a 40-ton sample has been shipped to the McLeese Lake operation for leaching tests.

The program is designed to confirm previous work and further test the oxide reserve within the current pit. Preliminary estimates put the reserve at 79 million tons grading 0.76% copper at a 2-to-1 stripping ratio. President William Myckatyn says the company has no data on the roughly 90 million tons included in the waste portion of the pit. He emphasized, however, that “if we prove up what we have now, we believe we have a mine.” Preliminary studies — based on an 18,000-ton-per-day, heap-leach, solvent extraction-electrowinning operation — estimate yearly output at 81 million lb. copper based on a recovery rate of 80%.

The capital cost would be in the region of US$130 million and the operating cost is projected at US55 cents per lb.

No drilling is planned for outside the pit during this phase of work, although Myckatyn says there is good potential for discovering new reserves. Gibraltar optioned the Lomas Bayas property earlier this year, paying US$840,000 upon signing. It paid a further US$1 million on July 1 and can complete the acquisition by paying another US$14 million on or before Oct. 31. The vendor retains a production royalty of US2 cents per lb., capped at US$3.8 million.

Gibraltar will initiate a full-scale feasibility study if it exercises its option. The study would cost US$4-5 million, in addition to the $1 million being spent on a current study of the property.

Gibraltar has no immediate plans for acquiring further properties. Indeed, with three projects on the go, Myckatyn notes the company is a little understaffed.

Gibraltar has entered a 50-50 joint-venture agreement with Imperial Metals (TSE) on the Mt. Polley copper-gold deposit about 25 miles from the McLeese Lake mill.

The joint venture is studying the feasibility of processing Mt. Polley’s 254 million tons (grading 0.26% copper and 0.01 oz. gold per oz.) at Gibraltar’s mill or, alternatively, operating the project as a stand-alone mine. Meanwhile, Gibraltar plans to reopen its McLeese Lake mine, which shut down Dec. 1, 1993, in response to a drop in the price of copper.

Improved prices, as well as concessions on taxes and hydroelectricity rates, are responsible for the decision to reopen, and the company expects to begin producing concentrate in October.