Current Projects

Pend Oreille/Metaline Zinc Mines

Metaline Contact Mines owns mineral rights and properties to over 8,200 acres in the Metaline District, located in Pend Oreille County, northeastern Washington State. The Company leases approximately 8,000 acres of these rights to Teck Cominco American Incorporated, the U.S. subsidiary of Teck Cominco Ltd., the world's largest producer of zinc concentrates.

Established in 1906, the Metaline District is a significant past-producer of zinc and lead, having produced about 17.5 million tonnes of ore grading 2.52% zinc and 1.14% lead from the Metaline Formation. The Pend Oreille Mine was the major producer in the Metaline District, having yielded 14.8 million tonnes containing 2.3% zinc and 1.1% lead.

The zinc-lead mineralization of the Metaline Formation occurs primarily in two horizons - the Josephine Horizon, and the deeper higher-grade Yellowhead Horizon. The Josephine Horizon hosted most of the historic mining activity in the district. A recently identified third horizon, the Yellowhead #2, positioned 500-600 feet below the main Yellowhead Horizon, has now been recognized for its economic potential

Teck Cominco American acquired the Pend Oreille Mine in 1996, and renegotiated a new long-term lease agreement on the Company's mineral rights and properties, effective September of 1997.

The map below shows the Company's mineral rights and properties relative to the Pend Oreille Mine.

(Click Photo for Larger view)

In January of 2004, after three years and US$74 million in construction costs, Teck Cominco American commenced the commercial production of zinc-lead ores and concentrates from the Pend Oreille Mine. Announced reserves in the Pend Oreille Mine are 5,727,000 tonnes, grading 7.7% zinc and 1.4% lead. Planned production is 2,000 tonnes per day, yielding 83,000 tonnes of zinc and 15,000 tonnes of lead concentrates per year. The zinc-lead concentrates are being shipped approximately 50-miles north to Teck Cominco's facilities in Trail, British Columbia, one of the largest fully-integrated zinc and lead smelting and refining complexes in the world.

In 2000, additional "inferred resources", grading 7.0% zinc and 1.4% lead, were discovered in the Washington Rock area, a portion of which are mineral rights owned by the Company. Washington Rock is located approximately 1-mile south of the Pend Oreille Mine. These additional resources increased the resource base allowing Teck Cominco to make a positive production decision on the project.

(Click Photos for Larger view)

The inferred resources identified in the Washington Rock area are located within Yellowhead and Yellowhead #2 Horizons.

The Company's lease with Teck Cominco American is 20 years, with an option for an additional 20 years, and so long thereafter as there is commercial production. The Company currently receives $3,880 per quarter in advance royalty payments that increase in 2006 and thereafter to $5,335 per quarter. The lease also provides a 3% Net Smelter Returns ("NSR") production royalty upon commercial production. During the first 3 years of production the NSR royalty is fixed at $150,000.00 per year.

As of July 1, 2004, the Company has received $102,606 in advanced royalty payments from Teck Cominco American.

Exploration Potential

The monetary expenditure at the Pend Oreille Mine by Teck Cominco suggests a long-term commitment to the Metaline District. The Company believes this commitment is based, in part, on:

Teck Cominco's long-term need to supply zinc-lead concentrates to its world-class smelter/refinery complex in Trail, B.C.
The exploration potential outside of the defined resource areas.

Based upon the locations of defined targets, Metaline Contact Mines believes that its mineral rights and properties are well positioned to be included in future discoveries. Potential targets include:

Areas south of the Pend Oreille Mine and west of the Pend Oreille River where the Yellowhead and Yellowhead #2 Horizons have been defined.
The Yellowhead #2 Horizon in the Pend Oreille Mine Area.
Areas on the west side of the Pend Oreille River and north of the Pend Oreille Mine area that are parallel to the northerly trend of the Metaline Formation and Yellowhead Horizon.
Areas on the east side of the Pend Oreille River along the mineralized trend northeast of the Pend Oreille Mine.