MINING NEWS: Abacus to acquire Afton mill, facilities, tailings in share deal with Teck Cominco

Vancouver-based Abacus Mining and Exploration Corp. said May 17 that it has signed a letter of intent with Teck Cominco Ltd. for the purchase of Afton Operating Corp.’s milling and processing facilities, tailings storage areas, associated permits, and other infrastructure at the shut-in Afton Mine near Kamloops, B.C. The company also agreed to purchase Teck Cominco’s back-in rights on the Abacus’ Afton properties.

Abacus also said Giroux Consultants has completed the preliminary resource calculations on the DM/Audra and Rainbow zones. Abacus President Doug Fulcher says the numbers, which are based on 35,000 meters of diamond drilling completed by Abacus and drilling completed by previous operators, give Abacus “a significant competitive advantage in the Afton camp.”

“Acquiring the infrastructure will significantly advance the timeline of our development process and considerably reduce future capital costs. The tonnage and grade numbers are consistent with similar copper-gold porphyry deposits in British Columbia. At a 0.20 percent copper cut-off grade, we now have over 75 million tonnes of indicated resources in the DM/Audra and Rainbow zones. Coupled with an aggressive drill program this summer, we expect to advance the project to a pre-feasibility stage by the end of 2005,” Fulcher said.

Under the terms of the deal Abacus will acquire the mine facilities, associated permits, surface rights and related equipment, as well as the back-in rights, by issuing 18.5 million shares and $10 million cash to Teck Cominco over the next two years.

Abacus said “completion of the transaction is subject to definitive documentation, receipt of necessary regulatory approvals and customary conditions of closing.”

Upon closing, Teck Cominco will become a “significant” Abacus shareholder.

—Mining News