EXPLORATION ROUNDUP — AMT plans Copper Creek development

San Manuel, Ariz. — AMT International Mining (AAI-T) has fulfilled its obligation to earn a half interest in the Copper Creek project of Broken Hill Proprietary (BHP-N) and is waiting for the Australian-based major to take a seat at the bargaining table.

Once the companies sign the joint-venture deal for the property, situated in southern Arizona, AMT will have the option of acquiring further 25% for US$5 million.

AMT has one year to decide whether or not to earn the additional interest.

To acquire its initial interest, the company agreed to spend US$3 million exploring the property, as well as produce a feasibility study. It has already spent close to US$6.5-million.

AMT has proved up reserves from the first phase of mining and completed (ahead of schedule) a positive feasibility study in October.

AMT intents to spend US$40 million in preparing the site for the first phase of mining. BHP’s failure to contribute its share of development costs will result in the dilution of its interest in the project.

BHP’s ability to keep in step with AMT’s progress at the site is in question. The company recently took a US$500-million writedown against the value of its Magma Copper assets and has announced plans to restructure its Melbourne-based head office.

During a site visit to the property, The Northern Miner learned that the company intends to mine three breccia bodies: Old Reliable, Creek and Childs-Aldwinkle. According to President Kushal Singh, AMT will mine the Creek and Childs-Aldwinkle zones using underground methods, then exploit Old Reliable using open-pit, heap-leach techniques. Those three zones host proven and probable reserves totalling 11.4 million tons grading 1.3% copper.

The company plans to use blast-hole stoping to mine 5,000 tons of ore per day.

A dense media separation unit will be built to concentrate the copper-bearing sulphide minerals (primarily chalcopyrite) for processing.

Sulphide mineralization at Copper Creek is coarse-grained and often found in clots and veins or as the matrix in the breccias. In addition to copper, sulphide material in the Childs-Aldwinkle and Creek deposits contains gold, silver, molybdenum and rhenium (a rare heavy metal used in catalysts and thermocouples).

Concentrates will be processed either at a mill on the site or at one that would be built at BHP’s San Manuel smelter, 12 miles west.

The Old Reliable deposit will be mined independently at the daily rate of 2,000 tons. Leach pads will be constructed on site.

AMT expects to produce copper at a cash cost of 54cents per lb.

Permitting for the operation has begun, and a construction decision could come as early as the second quarter of 1998, once the company has arranged financing for the project. Initial production could begin as early as the year 2000.

According to Glen Zinn, AMT’s chief financial officer, the property’s true potential will not be realized until the second and third phases of development.

Production during the second phase of mining will increase by 10,000 tonnes, with additional material supplied from underground sources.

To gain access to the underground zones, the company plans to drive an adit into the property between the northerly Childs-Aldwinkle and the southerly Creek.

Breccia bodies

The Copper Creek property hosts more than 250 known breccia bodies, many of which are mineralized. The company plans to gain access to these mineralized breccia bodies by drifting from the main adit.

Capital costs for this second phase of mining are pegged at US$38 million.

Resources totalling 125 million tons grading 2% copper exist in several other breccia pipes (excluding other pipes, such as the Globe, Gloryhole, American Eagle, Superior and Copper Prince, which have not been adequately drilled).

Additional drilling will be required to prove up these pipes, as well as evaluate other targets.

AMT’s Copper Creek property comprises 6,500 acres of its own land, as well as properties on which it has formed joint ventures with BHP and Phelps Dodge (PD-N).

Beneath the Creek breccia, in the Lower Creek and American Eagle resources, lies additional mineralization that could host as much as 300 million tons grading 0.75% copper.

Tim Marsh, senior geologist for AMT, believes that Lower Creek and American Eagle form a hybrid porphyry system at depth. Mineralization has been intercepted at depths below 2,000 ft.

Zinn believes the property hosts the potential for similarly mineralized bodies at depth. Once underground, AMT can better delineate this mineralization, Zinn says.

AMT is already considering how to extract this mineralization, one possibility being block caving, a large-tonnage technique.

BHP uses the method at its San Manuel copper mine, 9 miles west of Copper Creek, where large blocks of disseminated ore (measuring as much as several hundred feet on a side) are blasted in place. Gravity then draws ore from the bottom, like sand through an hourglass. BHP can mine as much as 60,000 tons per day at costs as low as 60cents per lb. Using block caving, AMT expects to mine as much as 36,000 tons per day at a similar cost.