Chinalco Yunnan Copper Resources (CYU) is taking steps to abandon its exploration projects in Laos and intends to focus on its projects in the Mount Isa region of northwest Queensland.
CYU and its 51% Chinese-registered subsidiary, Yunnan Copper San Mu Mining Co (San Mu), have for several months sought offers for the purchase of the project interests held by San Mu in Laos but no offers have been received.
Consequently steps are being taken to abandon the Laos projects, a process that may take several months to finalize with the Laos mining authorities. CYU will not be incurring any further financial liability in relation to the San Mu entity.
The Board of Chinalco Yunnan Copper Resources has commenced 2014 with a focus on transforming the company into a substantial mid-tier mining group, with a primary exploration focus in the Mt Isa region and the ongoing pursuit of project acquisition opportunities currently under review and negotiation.
As a result of disappointing results from the Sulfato drilling program conducted late in 2013 at the Chilean project, CYU has since notified Codelco of its intention to withdraw from this farm-in agreement. Arrangements are being made with Codelco to cease CYU’s participation in this project.
In the case of the Palmani project in Chile, the subject of a farm-in agreement with Rio Tinto Chile, CYU assessed different funding options to conduct the first stage of an exploration drilling program. Due to the mountainous terrain around the project, initial estimates for such a program were more than $1.5 million due not only to the need for deep (and expensive) diamond drilling, but also the creation of access roads and related facilities.
CYU had been seeking ways of funding this program from sources other than its own cash resources, but no feasible means was identified. As a consequence CYU has notified Rio Tinto of its intention to withdraw from the Palmani farm-in.
Due to the withdrawal by CYU of both the Sulfato and Palmani farm-ins, the only remaining project in Chile is Humitos. CYU has previously advised that unless satisfactory commercial and access arrangements can be established with an adjoining tenure-holder and CYU has sufficient funds available, no further activities would be contemplated at Humitos.
CYU’s Board has resolved to cease further activities at Humitos and not incur any further financial commitments with that project. As a result, while no immediate steps will be taken to withdraw from the 100% CYU-owned tenure at Humitos, when additional tenure renewal or other fees become payable, these will be allowed to lapse unless some other suitable commercial arrangement can be secured. www.cycal.com.au