Having completing an initial public offering, earlier this year, to net $900,000, Minto Explorations (VSE) has arranged a further $530,000 in funding.
Teck (TSE) and Asarco (NYSE) each bought 190,000 units in the company at $1.04 per unit and Yorkton Securities exercised a greenshoe option for 150,000 units at $1 each.
Proceeds from the placements are being used to fund a feasibility study and exploration on the like-named Minto project in the southern Yukon. Drilling on the deposit in the 1970s returned resource estimates ranging from 7.2 million tons grading 1.86% copper up to 8.2 million tons grading 2.04% copper. One estimate included values for gold and silver of 0.014 oz. and 0.21 oz. per ton, respectively.
A feasibility study in 1976 found the project to be uneconomic and, ever since, the property has been idle (except for basic assessment work and a geophysical survey in 1991).
The deposit straddles the Minto and DEF claims. Minto Explorations acquired the Minto claims from Teck and Asarco in return for 750,000 shares each; and it can acquire the DEF claims from Falconbridge (TSE) by paying $1 million. In 1992, Minto commissioned a new resource estimate and concluded that the core of the Minto deposit contains about 5.3 million tons grading 2.27% copper, 0.019 oz. gold and 0.28 oz. silver.
The total proven and probable in situ resource is estimated at 7.2 million tons grading 1.87% copper, 0.015 oz. gold and 0.24 oz. silver, plus a further possible resource of 5.5 million tons grading 0.74% copper, 0.009 oz. gold and 0.13 oz. silver.
Minto envisions mining the deposit by a small open pit, followed by underground room-and-pillar methods.
Previous metallurgical testing indicated recoveries of 95% for copper and 85% for gold using conventional flotation.
Preliminary studies estimate that the capital cost of a 525,000-ton-per-year operation would be $24.5 million (not including working capital). The operating cost is estimated at $26 per ton milled from an open-pit operation and $43 per ton milled from underground mining.
The cash cost per pound of copper, after credits and including smelting and transport, is projected at US43 cents. This estimate assumes a Canadian dollar to be worth US76 cents and is based on prices of US$1.05 per lb. copper, US$375 per oz. gold and US$4.50 per oz. silver
In addition to the feasibility study, the company plans to explore an area of potentially higher-grade mineralization south of the Minto deposit. Including the recent issue, Minto has 3.6 million shares outstanding.
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