Vancouver – Looking to fast-track its copper production aspirations, Coro Mining (COP-T) has entered into a deal to buy the operating Cerro Negro mine located in Chile’s Region V.
An option agreement has Coro paying a total of US$40 million in stages over the next several months to acquire the copper mine complex comprised of open pit and underground operations, processing and concentrator circuits, heap leach operations and a solvent extraction-electrowinning (SX-EW) plant.
Cerro Negro has copper cathode production capacity of about 13.2 million lbs. (6,000 tonnes) per year including its toll treatment commitment to process oxide ore from Chilean state-owned mining company Enami. The operation also has annual capacity to produce roughly 21 million lbs. (9,600 tonnes) of copper-silver concentrate through its flotation circuit and a further 9.3 million lbs. (4,200 tonnes) of copper sulphate from heap leach operations.
“Cerro Negro represents an excellent opportunity for Coro to acquire a cash flow producing asset at a time of high copper prices,” said Alan Stephens, Coro’s president and CEO in a statement.
Stephens said Coro will evaluate the operation looking ways to enhance production while also examining exploration potential of the surrounding district.
Historic operations at Cerro Negro dates back to 1944. From 1983-1996 a predecessor company to Antofagasta Minerals (ANFGY-O, ANTO-L) operated a 1,200 tonne-per-day concentrator on the site producing up to 11 million lbs. (5,000 tonnes) of copper in concentrates annually. With slumping copper prices and rising operations costs the mine was sold to its employees in 1997 and subsequently had a small copper precipitate plant installed.
Since 1998 Cerro Negro’s annual copper in concentrate production has averaged about 4.2 million lbs. (1,900 tonnes).
An oxide ore toll agreement with Enami, which sources third party ore trucked in from small artisanal mines in the surrounding district, runs until 2011 and covers production of up to roughly 4.4 million lbs. (2,000 tonnes) of copper in cathode per year.
Cerro Negro is a flat-lying manto-type deposit hosted in Cretaceous volcanics and sediments. Disseminated copper mineralization consists of bornite, chalcocite and chalcopyrite plus the oxidized equivalents in volcaniclastic breccias and carbonaceous shales.
Oxide ore is mined by open pit methods while sulphide ore is primarily produced by underground mining (mostly room and pillar). Some smaller satellite ore bodies are selectively mined by independent contractors on a price participation basis.
Coro is already active in the region — advancing a pair of advanced-stage copper exploration projects: Barreal Seco, in Chile, and San Jorge, in Argentina. It expects to complete a both a scoping study for Barreal Seco and a pre-feasibility study on San Jorge by mid-2008.
Shares of Coro notched up 7 on the planned mine acquisition news — closing at $1.25 apiece in February 13th trading. The stock has a 52-week trading range of 85-$2.25.
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