South Atlantic, Union Mines strike deal to merge

Union Copper’s main asset is an interest in Oracle Ridge Mining Partners, a partnership formed in 1977 to develop a copper-silver deposit near Tuscon, Ariz. The partnership has spent $23 million(US) on the project to mid-1983.

Under the terms of a new agreement, Union has the right to receive 95% of future cash flows from the property until 150% of the project capital is paid back. Thereafter, Union will receive 88.75% of cash flows subject to certain adjustments based on copper prices and production costs.

The Oracle Ridge deposit hosts reserves of four million tons grading 2.33% copper and 0.67 oz silver per ton. An additional 4.4 million tons grading 2.25% copper are in the possible reserve category.

Union is completing a feasibility study into the viability of building a 250,000-ton-per-year mining facility at Oracle Ridge. Capital costs are estimated at $7 million. The company is considering various financing options.

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