Development plans for Michigan deposit

A joint venture has been formed between Great Lakes Minerals (TSE) and Brookline Minerals (VSE) to bring the former’s 543-S copper property into production.

Situated in Michigan’s Keweenaw Peninsula, the 543-S property is permitted to begin construction and has been the subject of detailed mine planning. According to an engineering report by Dynatec Mining, minable reserves stand at 1.1 million tons grading 4% copper and there is potential to add to these reserves through exploration at depth.

The defined resource occurs within eight discrete zones between surface and 600 ft. below surface. Other, smaller mineralized zones are also found throughout the deposit. Mineralization has been traced over a strike length of 2,000 ft., although no mineralized zone has been found to be continuous for more than 800 ft.

The overall average true width of the mineralized zones is estimated to be 12 ft., with individual zones varying from fewer than 5 to more than 30 ft. Copper mineralization is found as chalcocite and is hosted in basaltic amygdaloidal flow-top breccias of the late Precambrian-aged Portage Lake volcanic group. Minor native copper and small amounts of silver occur with the chalcocite, and overlapping one another in the deposit area are several mineralized flow tops, all of which dip about 40 to the north. A dacite dyke, which may be genetically linked to the mineralization, has cut the deposit subparallel to the volcanic sequence. The deposit has been cut by thrust faults, also subparallel to the volcanic rocks.

The deposit is amenable to underground trackless mining, with access provided by a minus-15% ramp. Longhole stoping is being proposed as the mining method. Dynatec estimates the property will produce 25 million lb. of copper per year for four years at a cash cost of US73 cents per lb. A life-of-mine milling agreement has been negotiated whereby ore will be trucked to Metall Mining’s (TSE) Copper Range facility.

Mine construction is expected to begin in the first quarter of 1995 and, according to the Dynatec mine plan, ore can be trucked to Copper Range within four months of the start of construction.

Under the deal, Brookline will fund the $5.5 million in capital costs required for production. Proceeds from production will be split 75-25 between Brookline and Great Lakes until payback. Thereafter, the proceeds will be split equally.

Brookline has about $5 million of capital available and an additional private placement for $1 million has been negotiated. It has also entered a standby agreement with Noramco Mining (TSE), whereby the latter will provide it with up to an additional $2.5 million to fund working capital requirements.