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Gold/Mining/Energy : Golden Eagle Int. (MYNG) -- Ignore unavailable to you. Want to Upgrade?

To: GC who wrote (9440)	7/12/1998 1:02:00 AM
From: C Hudson	Respond to of 34075

This may have been posted before but here is an article from the Financial Times on Bolivian Mining. GE is mentioned. I would post a link but it does require registration so I thought I'd just post the whole article. WEDNESDAY JULY 8 1998ÿ ÿCommodities ÿ BOLIVA: Mining prospects lose some shine By Sally Bowen Some of the glitter has gone from the prospects for Bolivia's underdeveloped mining industry. Three years ago, a gaggle of North American juniors were trumpeting possibilities of significant gold strikes on the eastern border with Brazil. However, with the decline in world minerals prices, the Asian financial crisis and the virtual impossibility of securing risk capital for exploration, companies already operating in Bolivia are digging in, and new investors are concentrating on solid, rather than speculative prospects. One Denver-based company is giving wide publicity to geological reports claiming a "six million ounce" gold deposit in the Tipuani gold-mining district. But these deposits are alluvial and hard to assess. No one doubts that Bolivia, like Peru, has important mineral deposits. The problem is that, apart from the Battle Mountain-controlled Inti Raymi gold mine and Bolivar, the zinc mine joint venture between Comibol and local company Comsur, most operations are small and inefficient. Some of the most promising deposits, such as the Cerro Rico silver mountain in Potosi, are occupied by co-operatives of varying degrees of informality. Conditions are often primitive. "We are still producing as we did in colonial times," says Rolando Jordan, general secretary of Bolivia's association of small miners. "If Bolivia can compete internationally on prices, it's because we are supplying labour virtually free." Despite an attractive legislative framework, serious foreign investment has been paltry - less than $600m in the past 12 years, say local analysts. Expenditure on proving new reserves has been almost non-existent and even basic geological information is deficient. However, feasibility studies on two new mines - and a more encouraging outlook for silver prices - may breathe fresh life into the scene. The San Bartolome silver and tin deposit near Potosi, currently being assessed by Asarco of the US, promises good grades. Studies to determine investment levels and payback should be complete by October. Processing of between 3,500 and 5,000 tonnes a day of ore is envisaged. Much expectation also surrounds the San Cristobal property acquired by the Soros brothers-owned Andean Silver Resources. It lies in the mineral-rich Los Lipiz southern area close to the Chilean and Argentine borders. More than 90,000 metres have been drilled and, although grades are low, the deposit is highly mineralised. Again, results of a feasibility study are expected by the year-end. Analysts say investment could top $250m with 30,000 tonnes a day throughput. "Bolivia's best development opportunities lie in polymetallic mining," says Mr Jordan. "It's more sensible, more logical. We cannot expect to leap from small, semi-formal mining to large-scale exploitation when there's been no real exploration for decades. We need to go step-by-step." Many of the more promising prospects are still on the books of Comibol. A commission has been set up to price the properties but Comibol may need to lower its expectations to attract joint venture partners. The zinc-and-silver mine of San Vicente of Potosi, for example, failed to attract any offers last month, even though four companies had been expected to bid. Meanwhile, a fourth attempt is under way to dispose of Comibol's Vinto tin and antimony smelter along with Huanuni and Colquiri, once Bolivia's greatest tin mines. Four investment banks have presented offers to advise on the sell-off. Interested parties at one point included Renison Goldfields of Australia, Malaysia Smelting Corporation, Glencore of Switzerland and Brazil's Paranapanema, but all dropped out. Vinto's book price is $37m but eventual bids in an outright privatisation may be much lower. Output reached capacity in 1981 but fell off sharply in the tin crisis of the late 1980s. However, it has pushed back up to near capacity in recent years. Complicating Vinto's sale is the situation of the nearby Huanuni and Colquiri tin mines, which supply around a third of its raw materials. Under Bolivian law they cannot be sold outright. Any purchaser for Vinto would have to sign a joint venture or other shared-risk contract with some 5,000 often-hostile workers who are currently extracting tin "informally" and selling it themselves.