Shipes sees bright future for Arimetco

By using low-cost methods to produce cathode copper at properties in North and South America, Arimetco International (TSE) Chairman Roy Shipes says he wants to turn the company into an industry powerhouse.

“The key is knowing how to get past problems at our mining operations,” he told analysts and shareholders at a well attended annual meeting in Toronto.

Interest in Arimetco is not surprising since the company emerged as the top performer among Toronto Stock Exchange mining stocks last year after the stock shot up to $3.70 from $1.30 at the end of 1990. Trading at $4.50 on June 29, the day of the meeting, Arimetco has developed a big following among analysts, particularly in Toronto.

The company’s success is based on the solvent extraction-electrowinning (SX-EW) technology that Arimetco is using to produce about 30 million lb. of cathode copper this year from four mines in Nevada and Arizona.

Having agreed to invest up to $2 million in the Andacaba zinc-lead-silver mine in Bolivia, Arimetco is set to diversify into other metals as well.

A group led by Shipes is experimenting with a pressure leaching system at Breakwater Resources’ (TSE) Caribou zinc mine in New Brunswick in the hope that the technology will enable his company to increase zinc recoveries to about 78% from 43% when the operation was shut down in October, 1990.

After shareholders agreed to restructure about $90-million worth of debt, Shipes agreed to take over management control at Breakwater and to acquire 50% of the Caribou project.

Depending on results of a feasibility study to be completed by September, management will go ahead with plans to spend $32 million to bring the mine back into production, said Russell Alley, Breakwater’s new president. Construction could start as early as next March, he told The Northern Miner.

In addition, the Shipes group is drawing up a new mining method for Breakwater’s Estrades zinc mine at Casa Berardi, Que., where the narrow vein structure lead to dilution problems prior to its closure last year.

If a solution can be found to the problem, Alley said it would probably take about three months to bring Estrades back into production.

To avoid being extended by these and other projects (including a proposal to build a smelter in Venezuela), Shipes is making moves to beef up his management team. Arimetco’s 9-member board of directors now includes American Barrick Resources chief financial officer Gregory Wilkins, and Deak Resources executive Douglas Hume.

While Arimetco is producing copper for about US65 cents per lb., Shipes said he expects to see a firming in the price of the metal from its recent US$1.11 per lb. trading level. The prediction is based on low inventory levels and a drop in stockpiles of scrap.