Constellation Copper to start up Lisbon Valley

Vancouver — Constellation Copper (CCU-T) is arranging loans and cashing up its treasury en route to startup at its Lisbon Valley mine in southeastern Utah.

In addition to arranging a US$30-million credit facility and a $20-million private placement of 30.8 million shares priced at 65 apiece, the company has ordered new mining equipment.

The equipment order consists of four 205-ton Komatsu 730E haulage trucks and one 26.2 cubic-yard Komatsu WA1200 wheel loader, as well as two blast-hole drills, two crawler dozers, and two water trucks. A grader and a fifth haulage truck will be added after the planned startup of mid-2005.

Ore will be mined from three open pits (Centennial, Sentinel and GTO), as well as the Cashin satellite deposit. Processing will take the form of heap leaching and solvent extraction-electrowinning (SX-EW).

Lisbon Valley is expected to produce 24,500 tonnes (54 million lbs.) cathode copper annually over a mine life of at least seven years.

Earlier this year, the company acquired crushing and SX-EW processing facilities from the Tonopah copper mine in central Nevada. The mine had been run by Equatorial Mining of Australia, until operations ceased in 2001. Constellation has relocated the Tonopah plant to Lisbon Valley, where it will be reassembled.

Situated near the Colorado border, Lisbon Valley has been mined sporadically over the past 100 years. From the late 1960s to the early 1970s, Keystone-Wallace Resources mined and processed just over 800,000 tonnes from four pits. Constellation began work on the project in 1993 through predecessor company Summo Minerals, and over the past 10 years has spent roughly $10 million on acquisition and exploration costs, plus $3.5 million on plant design and construction.

Copper mineralization occurs mainly as malachite, azurite and chalcocite disseminations around grains in the Cretaceous Burro Canyon and Dakota sandstone formations, and exists between hangingwall strands of the Lisbon Valley fault.

The resource is pegged at 33.3 million tonnes grading 0.514% copper, based on a copper price range of 75-90 per lb. and a stripping ratio of 2.25:1 for the Sentinel, Centennial and GTO deposits.

Constellation Copper has 74.9 million shares outstanding and was trading at 70 at presstime.