Golden News funds future work in Mexico

Junior Golden News Resources (VSE) has raised more than $11 million to buy Mexican-based Minera Sanex and prepare that company’s Luz del Cobre copper project for production.

The junior raised the funds through a private placement of 10 million units at $1.20 per unit. Each unit includes one share and half a warrant, with a full warrant enabling the holder to buy one share at $1.50 for a year. Some of the proceeds will finance the initial US$1.7-million instalment for the purchase of Minera Sanex from 49%-owner Chutine Resources (VSE) and a group of private investors. The balance of US$3 million must be paid in instalments over three years.

The rest of the proceeds will be used to bring Luz del Cobre into production, complete delineation of the Trion copper deposit and explore gold-mineralized zones on the San Antonio property.

President Kelsey Boltz said the company’s primary objective is to develop cash flow to fund future growth, adding that he does not want to have to return to the market for additional funds.

Luz Del Cobre will be developed as an in situ leaching operation and will employ solvent extraction-electrowinning (SX-EW).

The deposit is a roughly tabular breccia body measuring 1,200 ft. long, 400 ft. wide and 100 ft. thick.

The in situ process involves drilling injection wells on a triangular grid with a 22-ft. spacing. The wells are injected with water which is expected to become weakly acidic when it combines with the deposit’s 5% pyrite content. The leachant, with its dissolved copper, is then collected in a series of underground drifts and crosscuts and the copper is plated out by means of SX-EW.

Since the deposit is quite porous, the solutions are expected to penetrate easily into the rock surrounding the injection holes, Boltz says. Luz Del Cobre contains about 6 million tons grading 1% copper and the capital cost of a 10-million-lb.-per-year operation is estimated at US$6 million. Direct operating costs are projected at US35 cents per lb.

Boltz says there is excellent potential in developing other leachable copper deposits nearby.

The Trion deposit, about 3,000 ft. west of Luz del Cobre, contains 4.5-7 million tons grading 0.5-0.8% copper. It has not been fully defined and further drilling is planned this year.

The company is also negotiating to acquire three other properties in the same area, which may be economic if the planned SX-EW plant at Luz del Cobre is made use of.

Preliminary exploration is also under way on the ground surrounding Luz del Cobre and Trion, the objective being to follow up previously identified gold zones.