Cominco Res. looks for more than gold

This year’s exploration budget is $10 million, excluding contributions from joint venture partners. Exploration activities are planned in the Western United States, Mexico, Chile, Turkey, France, Italy, Ireland, and Botswana, he said.

The company’s main source of production income is the Buckhorn mine in Nevada, which is expected to produce 26,000 oz gold for Cominco Resources’ account in 1989. Equinox Resources (TSE), its joint venture partner in the project, holds a 23.6% interest. Exploration has replaced reserves faster than they are being depleted and by year- end, reserves stood at 1.5 million tons (oxide) grading 0.05 oz gold per ton. Significant sulphide reserves are known to exist below the oxide cap and they total about one million tons grading 0.1 oz gold.

Geoffrey Harden, vice-president, told the meeting that the company’s Marte deposit is “proceeding rapidly to production.” The heap leach operation in Chile is expected to start production in mid- July at a rate of 100,000 oz per year. Cominco Resources has a 25.7% interest in the project, Anglo American Group, 54.3%, and Chemical Bank, 20%. Harden said he was optimistic mine life would be longer than 10 years.

More drilling is planned this year on the Lobo deposit, less than five miles from Marte. Harden sees about 60 million tons there grading 0.04 oz and some higher grade sections that might be attractive with selective mining techniques. Cominco Resources has a 50% interest in the property which could have a major impact on its gold output and earnings. Gold mineralization has been noted in at least two other promising areas nearby. The Maria copper property in northwestern Mexico is expected to begin production by year -end or early next year, he said. A high- grade copper reserve (850,000 tons grading 10.6% copper) has been established which may be treated at an available concentrator or sold directly to a smelter. Production rate would be 300 tons per day and underground access to the orebody would be funded by Cominco Resources’ Mexican partner. Cominco Resources has a 49% interest in the project. Harden said that Mexico is becoming a more attractive place to invest because the government has reduced taxes paid by foreign corporations.

An evaluation is under way on the Riddle nickel smelter in Oregon which ceased operations in 1986. Engineering, environmental and marketing studies are being done to determine the feasibility of resuming nickel production during the second half, the company said. A stockpile containing six million tons of lateritic nickel ore grading 0.7% nickel sits next to the smelter and some open pit reserves are also available. Preliminary studies suggest that production from the stockpile could reach approximately one million lb per month of contained nickel in the form of ferronickel.

The company has a rights issue in progress which will raise almost $22 million needed for mine development and exploration work on various properties.

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