Arimetco gears up for jump in copper output by year-end

With a number of former copper producing properties containing known reserves in its fold, Arimetco International (TSE) is gearing-up for a big jump in copper production. The company plans to go from its current production level of about 10,000 lb. copper per day to more than 100,000 lb. per day by year-end.

The company will use acid leach, solvent extraction and electrowinning technology to produce better than 99% pure cathode copper from its four properties in Arizona and Nevada.

Arimetco is currently producing about 10,000 lb. copper per day at its Yerington property in Nevada using stockpiled ore from a former operation on the site. The property was purchased from Anaconda Copper which mined more than 200 million tons of material. The stockpile contains in excess of 30 million tons of oxide material grading 0.25% copper.

Roy Shipes, president of Arimetco, said the company recently received permitting for the construction of a new leach pad which will allow for the expansion of the stacking operations from the stockpile to produce an additional 25-30,000 lb. copper per day.

The company also plans to begin leaching a large tailings pile containing at least 60 million tons grading 0.175% copper. The tailings- leach would add an extra 35,000 lb. copper production per day.

Shipes said the capital cost of the expansion is estimated to be US$4.5 million which he said would be funded from cash flow and the forward sales of copper product. He said the expansion should be complete by late June of 1991 with an overall production rate from Yerington of 60-65,000 lb. copper per day. Operating costs currently at about US80 cents per lb. should drop to about US55 cents when the operations reach full production, he said.

There is also an estimated 14 million tons of oxide ore remaining in the old open pit grading 0.33% copper. Shipes said the company does not have immediate plans to begin mining the reserve since the stockpiled material is expected to last about three years.

Yerington also contains a known deposit of sulphide material totaling 400 million tons grading 0.4% copper which the company has no plans to develop, but which is being treated as a longterm asset.

Arimetco operates a second copper operation 60 miles east of Tucson, Ariz. The Johnson mine, also a former producer, was purchased from Cyprus Minerals (NYSE) in early 1989. Arimetco began leaching operations in October of 1990, and at full production will produce about 30,000 lb. copper per day.

Reserves at Johnson include about 15 million tons of stockpiled oxide material grading about 0.3% copper plus about 10 million tons of oxide ore at about the same grade remaining in the pit. Production costs are expected to average about US35 cents per lb.

Arimetco also owns the Emerald Isle property about 15 miles northwest of Kingman, Ariz. The company is planning to construct an electrowinning plant on the property at a cost of about US$1 million to process an estimated 1.8 million tons of oxide reserves grading about 0.72% copper.

The plant will produce about 6,000 lb. copper per day, or about 2 million lb. per year, at an estimated cost of about US40 cents per lb. Shipes said he expects the plant will be completed by early April.

Arimetco’s fourth property is the VanDyke, also located in Arizona, with reserves of 100 million tons grading 0.5% copper. The deposit is not open pittable; it lies at depths of 1,100-2,000 ft.

Occidental Minerals and the U.S. Bureau of Mines tested an in situ mining technique on the deposit in the early 1970s. The technique involves the injection of a solution of dilute sulphuric acid into the deposit through a series of wells, each surrounded by recovery wells which retrieve the resulting copper sulphate solution.

Although the tests were deemed successful and Occidental went ahead with plans to develop the property, the company was refused an operating permit by the town of Miami. Occidental subsequently dropped the lease.

Arimetco bought the property in July of 1990 from another group which was able to obtain permits for an in-situ operation. Shipes said the company is looking at the feasibility of bringing the deposit into production.

Arimetco currently has about 17.5 million shares outstanding plus 2.2 million warrants exercisable at $1.75 to December 1991.