Miramar acquiring Cuban interests

Through an arrangement with Australian-listed Matlock Mining, Miramar Mining (VSE) reports the acquisition of an interest in the Hierro copper project and the Delita gold project in Cuba.

Matlock holds an option to earn a 50% interest in each of the projects from the Cuban government, subject to providing a final feasibility study and arranging project financing. Development and capital costs of the project are recoverable by the joint venture.

In its agreement with Matlock, Miramar will acquire half the company’s interest in return for 200,000 common shares.

On completion of the agreement, Miramar and Matlock plan to vend the project interests into a new corporation which will then be listed on the Vancouver Stock Exchange.

Miramar is responsible for taking the new company public and for arranging financing for the two projects.

Matlock recently completed a bankable feasibility study on the Hierro Copper project, estimating minable reserves at about 3.9 million tons grading 3.47% copper at a 1.3% copper cutoff grade.

The feasibility is based on a 600,000-ton-per-year open-pit operation, using solvent extraction electrowinning technology with an estimated recovery rate of about 80%.

With an initial grade of 4.4% copper in the first two years of operation, Hierro will produce about 43 million lb. copper annually at an average cash cost of about US30 cents per lb.

By years five to seven, production grades will drop to 2.6% copper for an annual output of about 27 million lb. copper.

Overall, production costs over the life of the operation are estimated at about US50 cents per lb.

Capital cost of the project is estimated at about US$52 million and production is expected to start with 14 months of final approval from Cuba and the completion of project financing.

Minable ore reserves in the Delita gold deposit are estimated at about 9.4 million tons grading 0.14 oz. gold. The reserves trace a shear zone over about 2,300 ft. of strike length and to a depth of about 600 ft. with widths averaging 30 ft.

Although there is an oxidized cap containing an estimated 360,000 tons grading 0.12 oz., the balance of the reserve is refractory sulphide mineralization associated with arsenopyrite. Preliminary metallurgical work, using a very fine grind followed by cyanidation, indicates recoveries of 84% can be achieved.

Conceptual designs model the project as an open pit in the first 6-7 years of operation before moving to underground mining. Preliminary estimates put open-pit reserves at about 2.9 million tons grading 0.15 oz. gold with a strip ratio of about 5-to-1.

The project is expected to reach the feasibility stage within 12 months. Stephen Quin, vice-president of Miramar, said he is pleased with the acquisition. He notes that liberalization of mining and foreign investment law has recently attracted a number of international mining companies to Cuba.