Placer Dome acquires 50% stake in northern Chile copper

Major companies bullish about copper appear to be making Chile a prime hunting ground for new acquisitions. The latest is Placer Dome (TSE), which after completing a due diligence review, acquired a 50% interest in the Zaldivar copper deposit in northern Chile.

The major paid US$100 million to acquire the interest from Outokumpu Copper Resources, and will also provide loan financing of up to US$400 million toward the estimated US$500 million capital costs of a mine and treatment facility.

Placer Dome will update the current feasibility study for completion in mid-1993.

Copper production could start in 1995, based on a plant production capacity of more than 100,000 tons of copper per year, and a mine life of at least 20 years.

Placer Dome also reported that ongoing drilling and geological modelling since the acquisition agreement in September determined that the Zaldivar main zone and a zone to the southwest form a continuous body with a larger total resource than previously estimated.

The deposit is now estimated to contain 1.1 billion tons grading 0.57% copper, at a cutoff grade of 0.2% copper. This estimate includes a higher-grade zone of 290 million tons grading 1.16% copper, at a 0.7% cutoff grade.