A feasibility study on the Lisbon Valley property near Monticello, Utah, concludes that the oxide copper project is economic and projects a pre-tax payback of just over two years.
Owner Summo Minerals (VSE) hired engineering firm Roberts & Schaefer Co. to conduct the study.
The study envisages an open-pit, solvent-extraction electrowinning operation with an annual mining rate of 4.4 million tons.
The mining plan encompasses three copper deposits containing 42.6 million tons grading 0.43% copper at an overall stripping ratio of 2.2-to-1.
Annual output is estimated at 34 million lb. of cathode copper over a 10-year mine life, based on recoveries of more than 90% from all three deposits.
Cash operating costs are projected at US$3.87 per ton, or about US49 cents per lb., based on an average grade of 0.432% copper.
The initial capital cost is estimated at US$47.9 million, including all mining and process equipment, infrastructure, working capital and contingency.
Summo is discussing financing possibilities with several parties, and President Gregory Hahn believes US$35-40 million of the capital cost can be raised through some form of debt issue. The remaining US$10-15 million would be raised through equity financing.
Summo has 12.5 million shares outstanding, of which about 40% (47% fully diluted) are owned by a subsidiary of St. Mary Land & Exploration Company (NYSE). There are 2.7 million warrants outstanding, and these are exercisable at $1.20 until January, 1996, increasing to $1.38 until January, 1997.
Assuming permits are obtained by the end of 1996, construction could start in early 1997, and the operation could be producing copper cathode by October, 1997.
“Some say you can permit in 9-12 months in the U.S.,” says Hahn, although the company is projecting a 12-18-month waiting period. “If it comes in faster, all the better.”
Meanwhile, drilling on Summo’s Cashin property in western Colorado is expanding the size of the known oxide copper deposit. Sixteen of 19 recent drill holes intersected the deposit in the main target zone, returning an average grade of 0.59% copper over 134 ft.
This average includes one hole (CI9507) which intersected 160 ft. grading 1.18% copper. The three other holes failed to intersect any significant mineralization.
The drill-indicated resource at Cashin was last estimated at 10.9 million tons grading 0.55% copper, and Summo expects the figure to increase in light of the new results.
Summo is attempting to update the resource estimate and has started a metallurgical study to test the deposit’s leachability.
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