TVX sells to Placer Dome 50% stake in La Coipa bet

Placer Dome has agreed to pay $63 million cash and assume responsibility for about $36 million in construction and other property costs at the La Coipa project, where TVX retains a 40% interest.

Situated about 500 miles north of Santiago, the property contains proven and probable reserves of about 54.3 million tons grading 0.045 oz gold per ton and 2.25 oz silver in the two principal zones.

A third zone contains an additional 16.7 million tons of 0.008 oz gold and 3.58 oz silver.

Under a 2-phase development plan, a 1,100-ton-per-day processing plant is scheduled to start treating the higher-grade portion of the orebody in May.

Over the following 19 months, the plant is to produce 52,000 oz gold and seven million oz silver at a cash cost of approximately $90(US) per oz of gold equivalent. Placer Dome is guaranteeing the $8 million cost of building the plant.

By mid-year the Vancouver- based company is to outline the second stage of mine development in a feasibility study. Under phase 2, the joint venture says it will spend $193 million to build a larger plant capable of producing 520,000 oz gold during each of its first two years of operation and 300,000 oz annually thereafter.

If regulatory approval is given, TVX will purchase through a normal course issuer bid up to 1.5 million of its common shares or 5% of its outstanding stock. Shares will be purchased around mid-February at market price for the shares at the time of acquisition.

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