October 6, 1997: - Completion Of Basic Engineering
Robert S. Cogliandro, President of Atacama Minerals Corp. (the "Company") is pleased to
announce the Company has received the final Phase I Basic Engineering Report on its Aguas
Blancas project. This report was completed by Bateman/Parsons (a joint venture of Bateman
Engineering and The Parsons Corporation) in conjunction with reserve, process, mining and
transportation studies and represents the most extensive studies conducted to date for the
development of Atacama's major new caliche mine and chemical plant near Antofagasta, Chile.
The Bateman Report calls for the construction of a mine and process plant which will process
approximately 1.7 million tonnes of ore per year with production commencing in early 1999 and
reaching an annual rate of approximately 1,000 tonnes of crude iodine and 300,000 tonnes of
sodium sulphate by the year 2000. Seventy thousand tonnes of potassium nitrate will be added to
the manufacturing capacity by the year 2004 with the raw materials being supplied from the
existing pond system (no additional ore requirements). Iodine is currently priced at U.S. $18.00
per kilogram, sodium sulphate is at U.S. $120 per tonne and potassium nitrate is U.S. $325 per
tonne. The initial cost of the process facilities is estimated at U.S. $59 million. Additional
support infrastructure such as mine facilities, roads and water supply will add U.S. $13 million
to the initial capital costs. Total project costs through to startup in 1999 are projected at slightly
over U.S. $ 100 million, including contingencies.
Revised financial models indicate that at current market prices, the Company would generate
sales of approximately U.S. $55 million annually. This would increase to U.S. $75 million
when the potassium nitrate line is brought on stream. Net pre-tax income is projected at U.S. $31
million (before depreciation) increasing to U.S. $41 million with potassium nitrate production.
New reserve studies indicate project resources of a least 21 years of production. The internal rate
of return on a 100 percent equity basis exceeds 25 percent.
Commenting on the completion of these studies, the President of the Company, Mr. Robert S.
Cogliandro stated, "The finalization of the Basic Engineering Report and reserve studies
represents a major achievement for the Company in the development of the Aguas Blancas
project. The pre-construction studies have now been successfully completed. Our objective has
been to complete the design of a first class, high efficiency facility which would operate with
outstanding performance economics in the challenging environmental conditions of the Atacama
Desert. This objective has been met. We will be moving into detailed engineering by November
and remain on track to begin construction early in 1998. We are fully committed to delivering
product to our customers by early 1999."
Atacama Minerals Corp. is completing the design and construction of its Aguas Blancas plant
through its Chilean subsidiary, Minera Teslin Ltda. Located in Region II, approximately 95
kilometres from the Port of Antofagasta, Aguas Blancas sits in the heart of the Chilean nitrate
belt. The property is extremely rich in iodine and sodium sulphate and also contains exploitable
quantities of sodium nitrate (which will converted to potassium nitrate). With the completion of
basic engineering, the Company will begin detailed design with earthwork construction slated for
January, 1998. An extensive water well drilling program has been underway since February and
has been very successful. Final negotiations for project debt financing have commenced and the
Company expects to announce the results of these discussions shortly.
On completion of the process facility, the Company will become a major regional supplier of
high purity detergent grade sodium sulphate and an important new supplier of crude iodine which
has been in short supply on a worldwide basis. TEL: (604) 689-7842 Atacama Minerals Corp.
FAX: (604) 689-4250 Sophia Shane, Corporate Development |
