VANCOUVER–Looking to fast-track its plan to become a copper producer, Coro Mining (COP-T) has struck a deal to buy the operating CerroNegromine, 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 plant.
Cerro Negro has copper cathode production capacity of about 13.2 million lbs. (6,000 tonnes) per year, including a toll agreement with Chilean state-owned mining company Enami to process oxide ore. The operation also has the capacity to produce about 21 million lbs. (9,600 tonnes) of copper-silver concentrate annually through its flotation circuit plus 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 look at ways to enhance production at the operation while also examining the exploration potential of the surrounding district.
Historic operations at Cerro Negro date 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) 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 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) copper in cathode per year.
Cerro Negro is a flat-lying mantotype 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 while sulphide ore is primarily produced by underground mining (mostly room-and-pillar). Some smaller satellite orebodies 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 both a scoping study for Barreal Seco and a prefeasibility study on San Jorge by mid-year.
Coro shares climbed 7 on the news, closing at $1.25 apiece. The stock has a 52-week trading range of 85-$2.25.
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