Arimetco takes over lease on Arizona’s Van Dyke porphyry

The lease on the Van Dyke porphyry copper deposit in Miami, Ariz., will change hands following an agreement between Tucson- based Arimetco (TSE) and Kocide Mining. Under the agreement, Kocide will transfer its lease to Arimetco in exchange for a payment of US$300,000 when Arimetco realizes sales of US$2 million from the property. For three years after that, Kocide will be entitled to 2% of Arimetco’s net operating profits.

Arimetco estimates that the Van Dyke deposit will more than double the company’s copper reserves. Preliminary estimates of Van Dyke’s reserves, based on 140,000 ft. of drilling by former lessee Occidental Minerals, total 100 million tons grading 0.53% copper. Approximately 750,000 pounds of copper have already been recovered by in-situ leaching.

The acquisition of the Van Dyke property is consistent with Arimetco’s policy of pursuing properties that allow rapid production of cathode copper using low-cost acid leaching, solvent extraction and electrowinning, said Vice-President John Bracale.

The majority of the company’s reserves are contained in pre- stripped or stockpiled ore, including the Yerrington mine in Nevada, and the Emerald Isle and Johnson Camp properties in Arizona. Yerrington began production last November, while the Arizona projects should be up and running by the end of the year.

According to Arimetco, data compiled by Occidental indicates that the Van Dyke deposit is a down- faulted segment of the Miami Inspiration property currently being mined by Magma Copper (AMEX). Contained within the Van Dyke deposit are two high-grade blocks averaging more than 0.9% copper. Arimetco will mine these first using in-situ leaching methods.

Arimetco has also agreed to purchase Kocide’s mining equipment for US$190,000, which will partly satisfy a commitment to spend US$350,000 on the lease over the next two years. The agreement also gives Arimetco a groundwater permit held by Kocide.

The owners of the lease — Van Dyke Copper, Sho Me Copper and Miami Trust — are entitled to an advance royalty of US$6,000 per month as of June 15, 1992, as a credit against future production royalties.

During production, the owners will receive a monthly royalty equal to 5% of the net smelter return less the advance royalty payment.

Arimetco will retain the right to transfer its lease at any time prior to development, or terminate the lease with 30 days, notice.

The agreement remains subject to regulatory approval.