Bitterroot in option deal with LAC for Giant Copper

The Giant Copper property owned 100% by LAC Minerals (TSE) was recently optioned to Bitterroot Resources (VSE) under a sale-option agreement.

The property is north of Lillooet in south-central British Columbia, and hosts one of the largest undeveloped copper deposits in the province. Originally discovered in 1935, the property has been extensively explored by a number of previous owners including New Jersey Zinc, Homestake Minerals, Canadian Superior Exploration and finally, LAC Minerals.

A feasibility study completed in 1983 by Kilborn Engineering outlined a minable resource of about 270 million tons grading 0.27% copper, 0.005 oz. gold per ton, and 0.007% molybdenum at a strip ratio of about 0.4-to-1. LAC identified a higher-grade area containing about 100 million tons grading 0.34% copper, 0.006 oz. gold, and 0.008% molybdenum.

Bitterroot hopes to develop additional higher-grade reserves on the property and determine economic parameters for a first-phase pit.

In addition, during the development program Bitterroot will market the property in the hopes of selling it to a major mining company. The agreement with LAC calls for the proceeds of any sale to be split according to price. At a sale price of under $12.5 million, proceeds would be split 80-20 in favor of LAC. Up to $25 million, proceeds would be split 60-40 in favor of LAC, dropping to 40-60 up to $50 million and 20-80 if the price is over $50 million.

Under the earn-in agreement, Bitterroot can earn a 20% interest in the project by funding $4 million in expenditures through to December, 1996, and a further 30% by spending an additional $6 million by Dec. 31, 1999. Equinox Resources (TSE) recently exercised 380,000 share purchase warrants at 20 cents each, boosting its position in the company to 51% and injecting some needed working capital into Bitterroot’s treasury.

John Wright, operations manager for Equinox, said the company plans to drill two targets on the property in May. One of the targets is in an area which returned some good grade gold values from a limited amount of gold assaying done at the time. He added that the other target is something of a “geological concept” which the company plans to test.

Bitterroot noted that the property has a number of advantages including its location with road access, although the company does concede that the deposit has a marginal grade at current metal prices.

As a result, the company’s primary objective in this year’s program will be to increase the grade of the deposit.