Summo advances restructuring

Denver-based junior Summo Minerals (SMA-T) has already made great strides in its restructuring plan, first announced in early April 2002.

The company has converted its debt, totalling roughly C$19 million, into equity, except for a remaining US$1.1-million convertible note. Upon conversion of this note, expected soon, Summo will have 285.1 million shares outstanding.

Next the company intends to file a rights offering to generate another C$5.7 million.

At the company’s annual meeting on June 21, management will seek shareholder approval of several measures, including a name change to “Constellation Copper Corporation” (with a ticker symbol of ccu), a 10-for-1 share consolidation, and a more international representation on the company’s board.

Patrick James has been nominated for election to Summo’s board and has agreed to serve as executive chairman. James previously served as president and chief executive officer of Rio Algom and president, chairman and CEO of Santa Fe Pacific Gold.

Ross Bhappu, vice-president of Resource Capital Funds, has also been nominated for election to board.

Summo intends to become a mid-tier producer of low-cost cathode copper via open-pit mining and heap-leach, solvent-extraction/electrowinning processing.

In March, a positive feasibility study indicated that a solvent extraction-electrowinning operation at Summo’s Terrazas copper-zinc project in Mexico’s Chihuahua state would be economic.

The study pegs annual production at 18,000 tonnes of copper cathode and 27,000 tonnes of zinc ingot. Cash costs are estimated at US$770 per tonne copper and US$550 per tonne zinc.

To advance the project, Summo will require at least US$136 million.

The 58.3-million tonne resource grading 0.35% copper and 0.57% zinc would support mining at that rate for 11 years. Numerous satellite prospects have the potential to expand or extend the life of the mine.