Rio Algom president dead at 51 — Inmet, Rio win Antamina gold property

Celebrations by Rio Algom (ROM-T) and Inmet Mining (IMN-T) over a successful bid for the giant Antamina property in Peru have been cut short by the sudden death of Rio’s president.

Lawrie Reinertson, 51, died of a heart attack less than three months after his appointment as president and chief executive officer. Gordon Gray, Rio’s chairman, will assume the responsibilities of CEO until a succesor can be found.

“We are terribly saddened,” says Kelly O’Connor, Rio’s vice-president of exploration. “It’s a very significant loss for us.”

Reinertson’s death followed a press conference to announce that the Rio-Inmet team had won the bidding war for Antamina, a huge copper-zinc reserve with the potential to produce 1 million tonnes of copper and zinc concentrates per year.

One of the highlights of the briefing, says analyst Raymond Goldie of Richardson Greenshields, was Reinertson himself.

“We felt that [Antamina] was a very ambitious project but that at least Rio had a vigorous new president with a lot of experience in exploration and devlopment,” says Goldie. “Certainly, anyone who worked with Reinertson considered him a breath of fresh air.”

The Antamina investment is expensive, even by mega-project standards. On top of the US$20-million purchase price, Rio and Inmet have agreed to invest US$2.5 billion in the project. At least US$13.5 million must be spent before the middle of 1998, at which point the partners can elect to return the property to its vendor, Centromin Peru.

“At the end of that 2-year period, Rio must have someone firm and decisive at the helm,” says Goldie. “This is the biggest issue on Rio’s horizon.” Reinertson had more than 25 years experience in international exploration and development. He spent most of his career with Noranda, where he eventually became vice-president of U.S. exploration. In 1987, he joined Placer Dome as senior vice-president of exploration, then moved to Sydney, Australia, to become managing director of Placer Pacific. He joined Rio in April and was a key figure in orchestrating the partnership with Inmet to bid for Antamina.

Located almost 500 km north of Lima, Antamina hosts estimated proven and probable reserves of 128.6 million tonnes grading 1.61% copper, 1.33% zinc, 0.04% molybdenum and 17.7 grams silver per tonne.

Rio says the skarn deposit, consisting primarily of copper, zinc and iron sulphides, has the potential to host significant additional reserves.

Following signing of the contract in August, the partners plan to move five diamond drills on to the property to investigate this potential and collect feasibility data. A positive feasibility study would pave the way for development of a low-cost open-pit mine.

But if the partners invest less than the promised $2.5 billion in Antamina by 2001, 30% of the shortfall is payable to Centromin. Rio and Inmet would retain ownership of the property.