Falconbridge completing US$16mn Lomas Bayas expansion

Toronto-based mining-metals company Falconbridge (TSX: FL) expects to complete a US$16mn expansion to 35,000t/d in April 2004 at its 100%-owned Lomas Bayas copper mine in northern Chile's Region II, a company executive told BNamericas. Construction to increase capacity from 25,000t/d began in the last quarter of this year and involves upgrading the crushing and material distribution systems, said Gordon Stothart, general manager of Compania Minera Falconbridge Lomas Bayas. "It's been a record breaking year for Lomas Bayas," said Stothart, adding that 2003 would be the first year the mine achieved designed output with production forecast at about 60,400t of cathode copper. In 2004 the mine is projected to produce approximately 62,000t of cathode copper once the expansion comes on stream, he said. In the third quarter of this year, the all-cathode open-pit operation produced a record 15,663t at cash costs of US$0.46/lb. Stothart said that output in Q4 would come in close to this figure. FORTUNA DE COBRE At the adjacent Fortuna de Cobre deposit, Falconbridge is currently carrying out a conceptual review of project economics to evaluate whether a pre-feasibility study would be justified, said Stothart. A decision is expected by the end of the first quarter next year, he said, acknowledging that with current copper prices, the project "looks pretty good." Fortuna de Cobre is envisaged as a possible satellite to Lomas Bayas and not as a stand-alone project, according to Stothart. Falconbridge has until 2006 to exercise an option to acquire Fortuna for US$15mn, under an agreement with Sweden's Boliden from whom Falconbridge acquired the Lomas Bayas mine two years ago. Boliden halted work on a feasibility study for Fortuna de Cobre in 1998 because of low copper prices. According to previously published figures, the deposit has a geological resource of approximately 1.1Bt grading 0.23% copper, and production had been penciled in at 90,000t/y using Lomas Bayas SX-EW technology. Owned 60% by Canada's Noranda, Falconbridge's regional interests include a 44% stake in the Collahuasi open-pit copper mine in northern Chile's Region I and the Falcondo nickel plant in the Dominican Republic.