Taseko boosts reserves, but Fish Lake still on the block

A continuing drill program at the Fish Lake property southwest of Williams Lake, B.C., has boosted a preliminary estimate of reserves to 1.19 billion tons grading 0.23% copper and 0.012 oz. gold based on a cutoff grade of 0.30% copper-equivalent.

Taseko Mines (VSE), the current operator of the project, hopes to find a buyer for the property under a revised property agreement with Cominco (TSE).

According to a staged formula, if the sale price exceeds $70 million, Cominco will receive 40% of the proceeds to a maximum of $48 million. If Taseko cannot find a buyer by May 31, 1995, the property agreement reverts to its original form, making Cominco the project operator and leaving Taseko with a 20% net profits interest.

Taseko’s new reserve estimate is based on 95 holes drilled on 330-ft. centres. The company has drilled a total of 120 holes with results from the remaining 25 not yet available.

The Fish Lake deposit now measures 4,500 ft. east-west, 2,800 ft. north-south, and up to 2,700 ft. in depth. The deposit remains open to the west.

At a 0.40% cutoff grade, the deposit has essentially been defined, totalling about 950 million tons grading 0.26% copper and 0.013 oz. gold. Boosting the cutoff grade to a 0.50% copper-equivalent (based on US$1.15 copper, US$350 gold, a Canadian dollar at US80 cents, gold recoveries of 77% and copper recoveries of 88%), total reserves are estimated at 729 million tons grading 0.28% copper and 0.015 oz. gold.

Robert Dickinson, president of the company, said engineering studies are ongoing to determine ultimate pit limits and although no strip ratios have been determined, he said they will be low relative to comparable operations in the province.

The latest reserve numbers represent a considerable jump from the 201 million tons grading 0.24% copper and 0.015 oz. gold which Bethlehem Copper (now Cominco) outlined in the early 1980s.

The early work limited reserves to a depth of about 600 ft. and the deposit was deemed uneconomic at the time primarily because of low gold recoveries.

The property lay dormant until Taseko optioned it in early 1991. Taseko’s deeper drilling encountered higher gold and copper values at depth in the main part of the deposit and preliminary metallurgical work indicates gold recoveries will be in the order of 77% using conventional bulk flotation followed by a very fine regrind and secondary flotation.

The company plans to spend a further $350,000 for metallurgical testing on composite samples from various parts of the deposit in order to confirm recovery estimates.

Taseko has fast-tracked its efforts at the property, and Robert Hunter, chairman, said a full feasibility should be completed by this time next year. Taseko is well funded for the work with about $6.2 million in working capital. Permitting for the property is also ongoing and Hunter said the provincial government has been enthusiastic about the project.

Dickinson said the company is now in a far better position to find a buyer for the project now that further hard data on the deposit are available to interested major mining companies.