Financing a Copper Project in Chile

Quebrada Blanca (QB) is a copper project located in the semi-arid Andean highlands of northern Chile. The operation is situated 170 km ( 105 miles) southeast of the port of Iquique and 30 km (18 miles) west of the border with Bolivia, at an altitude of about 4300 m (14,000 ft) (Fig. 1). The QB ore body is a secondarily enriched porphyry copper deposit containing reserves of 85 Mt (93 million st) grading 1.3% copper. Underlying the enriched zone is a significant primary ore zone containing several hundred million tons grading about 0.5% copper. In the late 1970s and early 1980s Falconbridge and its affiliates spent $20- $30 million exploring the deposit and conducting feasibility studies. Falconbridge, however, decided not to develop the property. It was returned to its owners, Empresa National de Mineria (ENAMI), a Chilean state mining corporation. In 1988, ENAMI announced its intention to privatize the property through public bidding. Cominco Resources, then 61% owned by Cominco Ltd., examined the property and the extensive data base developed by Falconbridge. In conjunction with its parent company, Cominco Resources submitted a proposal to ENAMI to construct an open- pit mine, with heap leaching and solvent extraction/electrowinning (SX-EW) processing facilities. The plan would use patented heap leaching technology developed by Sociedad MineraPudahuel (SMP), a privately owned Chilean mining company. At that time, a $150-million project that would produce about 45 kt/a (50,000 stpy) of cathode copper was envisaged.