The news from Spain

As International Mining July goes to press with a major article on the great revival of interest in Spain’s mining potential, comes the news that Lundin Mining has acquired the Toral zinc-lead-silver property in northwestern Spain.

Lundin Mining has been granted an exclusive three-year Investigation Permit for the Toral Project by the Territorial Service of Industry, Commerce and Tourism of the Autonomous Community of Castile and León. The 2,850 ha property is located 400 km northwest of Madrid, near to the regional city of Ponferrada. This advanced exploration project has a significant historic Zn-Pb-Ag resource and was acquired through a public bidding process for a land holding cost of €2,100 for the first three years. The government authority chose Lundin Mining’s three-year work proposal as the winning bid.

The property covers over 6 km of strike length of the prospective Lower Cambrian Vegadeo Limestone formation which is regionally mineralized along more than 40 km of its extent, and includes hosting the Rubiales zinc-lead-silver deposit, located about 30 km northwest of Toral. Rubiales contained an 18.6 Mt mineral resource grading 7.3 % Zn, 1.3 % Pb and 13 g/t Ag and was mined by Cominco from 1976 to 1991. Rubiales produced extraordinarily high-quality zinc concentrate (life-of-mine average of 61% Zn with 95% zinc recovery; the lead concentrate contained 70% Pb and 450-550 gpt Ag with an 85% lead recovery). The concentrates were transported to the Asturianas zinc-lead smelter, located on the Asturias coast about 200 km to the west. The Asturianas smelter was designed to recover the mercury (0.16% Hg in concentrate) contained in the Rubiales zinc concentrate as a saleable product. Sulphide mineralization at Toral closely resembles the coarse-grained sphalerite and galena mineralization at Rubiales but Toral contains significantly more silver. The Toral property is accessed by excellent infrastructure, including a regional highway, high-voltage power line and a railway line which links to the Asturianas zinc-lead smelter via the city of León. Mining has traditionally been a significant part of the economy of this region which is strongly supporting the re-entry of new exploration and mining projects.

The Toral project area was investigated by Peñarroya-España and associates from 1975 to 1985; this work included constructing an underground ramp on an adjacent property that contains a small lead deposit. Over 42,000 m of previous diamond drilling in 64 drill holes, including 41 wedged holes, was completed at Toral. These holes delineated a narrow (average 3.7 m wide) but continuous, sub-vertical, tabular zone of coarse-grained zinc-lead-silver sulphide mineralization with an 1,100-m strike length and a vertical height exceeding 400 m. Based on the previous drilling, the historical estimate of the Santa Barbara deposit at Toral was estimated at 4.7 Mt grading 9.8 % Zn, 7.6 % Pb and 51 g/t Ag. This historical estimate was calculated on by Peñarroya-España. The zone of sulphide mineralization is open along strike to the northwest towards the known lead deposit as well as along strike to the southeast and downdip at depths below 700-1,000 vertical m from surface. The Peñarroya-España drill core is available including the remaining halved sulphide intercepts.

Lundin Mining is preparing to carry out a verification drill programme that will include re-logging and re-assaying the Peñarroya-España drill core and the drilling of six to eight holes within the historic resource zone, wedging holes off of pre-existing holes, in addition to drilling two to four exploration holes beneath the historic estimate to test the downdip potential. If results of this initial drill programme are favourable an extensive and aggressive delineation drill programme will follow with the objective of quickly outlining sufficient resources required for a bankable feasibility study. Certain exploration and mine development expenditures are eligible for economic development grants and interest free loans.

Karl-Axel Waplan, President & CEO of Lundin Mining, commented, "Toral has great potential to become a mine asset which we have acquired at very low cost, representing great shareholder value. There are many similarities between Toral and our Zinkgruvan orebody, including a steep, sheet-like shape which is good for mining, and the coarse-grained zinc-lead sulphides with low pyrite content and good silver credits that should be easy to process and could make high-value concentrates. If we can verify the historic estimate and exploration potential, our plan is then to fast-track the Toral Project to mine feasibility stage with the help of excellent government and local support that -we are receiving on this project.