Company Press Release
Southwestern Gold: Two Major Joint Ventures Formed With Phelps Dodge to Explore For Copper in Chile
VANCOUVER, British Columbia--(BUSINESS WIRE)--Oct. 7, 1998-- Southwestern Gold(TSE:SWG. - news) Southwestern Gold Corporation (SWG-T) is pleased to announce the formation of two Joint Ventures with a subsidiary of Phelps Dodge on Southwestern's 100 percent owned El Condor and West Fissure copper projects located in central Chile.
The El Condor Project is comprised of four separate claim blocks totalling approximately 19,000 hectares situated about 90 kilometres northeast of Copiapo and is at an elevation of 2,500 metres. Southwestern has been exploring the project area for the past 12 months resulting in the discovery of extensive high grade copper mineralization analogous to a number of significant deposits of similar type located in Chile. An exploration program will be initiated immediately with Phelps Dodge as operator.
Under the terms of the El Condor Agreement, Phelps Dodge must spend US$ 3 million over a three year period to earn a 51 percent interest. Once Phelps Dodge has earned its 51 percent interest then both parties will fund exploration on a 51/49 basis.
For funding and completing a bankable quality feasibility study, Phelps Dodge will earn a further 9 percent interest in the El Condor Project. Upon a decision to place a deposit into commercial production, Phelps Dodge will have the option to finance mine development and for doing so will earn a further 10 percent interest. Should Phelps Dodge elect to provide all funding to construct a mine, it will have a second option to purchase a further 5 percent (maximum 75 percent for Phelps Dodge) by paying Southwestern the sum of US$ 5 million.
The West Fissure Project is comprised of 13 claim blocks totalling approximately 81,000 hectares located within the main porphyry copper belt of Chile. The Joint Venture is targeting porphyry copper deposits and a first phase exploration program will be initiated in October.
Under the terms of the Agreement, Phelps Dodge can earn a 51 percent interest in the West Fissure Project by spending US$ 1.5 million over three years at which point a 51/49 joint venture will be formed with the parties contributing on a pro rata basis. The remainder of the terms of the West Fissure Agreement are the same as those negotiated in the El Condor Agreement.
Phelps Dodge has an excellent record of copper exploration and mining in Chile and Southwestern looks forward to the success of the joint ventures.
Southwestern Gold Corporation is a well financed international exploration company exploring for precious and base metals in Peru, Chile, Brazil and China. The Company is also exploring for diamonds in Brazil and Canada through its 52 percent owned subsidiary, Canabrava Diamond Corporation (CNB-V).
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