Santa Catalina boosts reserve

The estimated geological reserve at the Oracle Ridge underground copper mine near San Manuel, Ariz., has expanded.

The estimate is now calculated as being 8.1 million tons (proven and probable) grading 2.33% copper, up from the previous 5.2 million tons grading 2.24% copper.

Santa Catalina Mining (VSE), formerly known as Southern Copper, has a 70% interest in the project. The new estimate was made as part of an effort to double the daily mine capacity from the current 1,000 tons.

The capital cost of the expansion is estimated at US$12 million. Peter Guest, president, expects to raise US$9 million through a copper loan. The remaining US$3 million will be funded either through equity (with Santa Catalina responsible for 70%), or through the sale of a direct interest in the project to a third party.

At 1,000 tons per day, output from the mine is expected to be about 1 million lb. copper. Guest says the unavailability of certain equipment is hampering production, with output during some months reaching only 600,000 lb. The expansion includes the replacement of much of the problem equipment, and cash production costs are expected to drop to the US72 cents-per-lb. level from the current US85 cents.

Santa Catalina expects to complete the financing by the end of the first quarter and to be producing 2,000 tons per day by the first quarter of 1996.