Summo, Matrix seek cash for Mt. Watson

Low metal prices continue to hold back copper-oxide specialist Summo Minerals (SMA-T), which expects to rely on debt financing to keep its portfolio of development properties going.

Summo’s only producing interest, the Mt. Cuthbert copper mine in northwestern Queensland, Australia, produced 1,322 tonnes of copper in the quarter ended Sept. 30. (Summo owns an equity interest in Matrix Metals, the operator of Mt. Cuthbert.)

Matrix posted an operating cash flow of A$170,000 on revenues of A$4.4 million in the quarter. Under the mine plan at Mt. Cuthbert, no new ore is being stacked on the pads, so Matrix will require cash for future expenses. Summo, provided it can find financing itself, plans to stake Matrix in exchange for more shares in the Australian company.

At the Mt. Watson prospect, 25 km from Mt. Cuthbert, Matrix has upgraded an earlier inferred resource of 837,000 tonnes grading 1.3% copper to an indicated resource. Exploration drilling along strike has found mineralization 350 metres east and 700 metres west of the resource, and the structure hosting the mineralization has been traced 1.2 km around the nose of a syncline.

Matrix has applied for two more exploration permits covering the extension of the structure, including one over the Mt. Earl area where previous soil surveys outlined a 1,400-by-700-metre area of high copper values. More mapping, reverse-circulation drilling, and diamond drilling are planned.

Summo’s pre-feasibility work continues at the Terrazas copper-zinc project in Chihuahua state, Mexico, where recent metallurgical tests are showing recoveries of greater than 85% of both zinc and copper from oxide mineralization. Consulting firm Jacobs Engineering is promising a complete pre-feasibility study by the end of the year.

Summo received further financing from its two major shareholders, Resource Capital Funds I and II, during 2001, including a US$900,000 infusion from Resource Capital Fund II in the third quarter.