Vancouver – Continuing on its southwestern U.S. acquisition-spree, Augusta Resource (ARS-V) is purchasing the Rosemont copper-molybdenum deposit in Pima Cty., Arizona.
The purchase price for the project is US$20.8 million over three years, and it is subject to a 3% net smelter royalty.
Rosemont consists of three copper-molybdenum skarn deposits (the namesake Rosemont, Peach Elgin and Broadtop Butte), located southwest of Tucson and in close proximity to a number of large producing copper mines operated by majors Phelps Dodge (PD-N) and Grupo Mexico (GMBXF-Q) subsidiary Asarco. Historical resources, calculated prior to National Instrument 43-101, are:
- Rosemont 340.5 million tonnes grading 0.64% copper and 0.02% molybdenum in the sulphide portion, and 28 million tonnes averaging 0.46% copper in the oxide zone;
- Peach Elgin 13.7 million tonnes grading 0.78% copper in the sulphide zone, and 9.7 million tonnes of 0.72% copper in the oxides;
- Broadtop Butte 8.8 million tonnes grading 0.77% copper and 0.04% molybdenum.
Historic resource estimates include studies conducted by engineering firms Pincock Allen and Holt, and the Winters Group for previous property holders Asarco, Anaconda Minerals and Amax.
Augusta intends to fast-track the project directly to pre-feasibility stage and plans further infill drilling and NI43-101-compliant resource estimates. The company has contracted Denver-based engineering firms Mine Reserves Associates and WLR Consulting to conduct the study and resource-reserve analysis.
To satisfy the initial tranche of the acquisition (US$6.7 million), Augusta recently closed a $6 million convertible debt instrument with a one year term, bearing 9% interest and convertible into 2.18 million shares at $2.75 apiece.
The company has recently acquired a number of advanced stage precious and base metals projects in Nevada, New Mexico and Arizona.
With 23.6 million shares outstanding, Augusta posts a market capitalization of $72 million at its recent trading level of $3.05 per share.
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