Azco secures financing for Sanchez feasibility

Billing itself as a “new breed of copper producer,” Azco Mining (VSE) recently completed a $6.5-million financing in order to secure funds for a bankable feasibility study of its Sanchez copper project near Safford, Ariz.

The financing included 2.75 million units priced at $2.36 each to net the company just over $6 million after commissions. The units included one share plus a warrant exercisable at $2.75 to Oct. 8, 1992, and $3.50 per share to Apr. 8, 1993.

A feasibility study completed by Flour Daniel Wright Engineers on the Sanchez deposit in 1990 recommends it be brought into production based on an operating rate of 12 million tons per year.

The mine, to use solvent extraction-electrowinning (SXEW) technology, is projected to produce about 56 million lb. cathode copper per year at an average cost of US49 cents per lb. based on an average recovery of about 82% over the life of the mine. The capital cost of the project is estimated at US$74.9 million.

Preliminary estimates put reserves at 168 million tons grading 0.34% copper using a 0.2% copper cutoff grade. The deposit contains an additional reserve of 23 million tons grading 0.18% copper. The low-grade material will be crushed and leached based on crusher availability over and above the 10 million ton-per-year level of ore-grade production. The strip ratio of the deposit is estimated to be 1.08-to-1.

Azco plans to proceed with further engineering metallurgical and permitting work to bring the project to the bankable feasibility stage. The estimated cost of the program is slightly more than $3 million, leaving the company with additional funds for work on its Piedras Verdes property in southern Sonora, Mex.

Preliminary reserves on the property are estimated at 115 million tons of oxide material grading 0.33% copper, using a 0.2% copper cutoff. Azco has budgeted $1.3 million for additional work on the project including drilling, metallurgical testing and engineering studies for a preliminary feasibility study.

Azco is also planning a small program on its Mexican Suaqui Verde property in southeastern Sonora. The program is budgeted at $321,000 and will include a 25-hole reverse circulation drilling program as well as preliminary metallurgical testing.

Previous work on the property outlined a preliminary oxide reserve of about 30 million tons grading 0.32% copper based on a 0.2% copper cutoff. With the completion of the recent financing, Azco has about 13.8 million shares

outstanding and unallocated working capital of about $1.72 million.