Summo Minerals (SMA-T) has bought the Johnson Camp copper mine in southeastern Arizona from bankrupt Arimetco, a wholly owned subsidiary of Arimetco International, now de-listed from the Toronto Stock Exchange.
The mine is an open-pit, heap-leach, solvent extraction-electrowinning operation. Proven and probable reserves in the Copper Chief and Burro deposits weigh in at 27.8 million tons grading 0.387% copper at a stripping ratio of 0.76-to-1. Additional resources are said to exist outside the reserve areas.
To acquire the mine, Summo has agreed to pay Arimetco US$2.9 million, of which US$1.95 million will be paid up front. The remaining US$1 million will be derived from a US2 cents-per-lb. royalty from production when copper prices are at or above US$1 per lb.
The U.S. Bankruptcy Court has approved the transaction with the provision that Summo complete a 150-day due diligence program. Summo has contracted the Winters Company of Tucson, Ariz., to perform the due diligence and feasibility study in preparation. Confirmation drilling, scheduled for early October, will attempt to verify reserves.
Summo believes the mine can be re-started shortly after acquisition and produce 14-15 million lbs. of cathode copper annually. Cash operating costs are expected to range between 63 cents and 68 cents per lb. of cathode copper.
Initially, a capital investment of US$7.5 million will be required to re-start the operation, Summo estimates. This figure does not include the mining fleet, which will be provided by a contractor.
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