The company issued 1.6 million shares of stock to
Summo acquired the right to purchase the mine from Arimetco in 1998. Arimetco operated Johnson Camp until 1997, when the company went bankrupt.
After concluding the deal with Summo, Nord closed on the transaction for Johnson Camp, agreeing to pay US$1.9 million over the next three years, including US$310,000 upon closing.
Nord bought the mine because it needs the revenue, says Nord Chairman Pierce Carson: “We hope to generate cashflow for the company at a time when our main asset is not contributing to the bottom line.”
Nord owns a half-interest in Sierra Rutile, which controls one of a large, high-grade heavy mineral sands operation in Sierra Leone. However, Sierra Rutile shut down the mine in 1995 in response to political instability in that West African nation.
Johnson Camp represents a good buy at current copper prices, Carson says. Spot prices on the Comex division of the New York Mercantile Exchange have traded in the range of US65 cents per lb. With the return of higher prices, the mine will be capable of generating significant cash flow, Carson stresses.
Situated 65 miles east of Tucson, Johnson Camp has produced more than 150 million lbs. copper since 1975. The open-pit operation produced copper cathode from heap leaching and solvent extraction-electrowinning (SX-EW) of oxide ores. Residual leaching at the operation still produces 1-2 million lbs. copper annually.
Existing facilities at the 2,723-acre property include a 4,000-gallon solvent extraction plant, an electrowinning plant with 74 cells, a truck shop, office buildings, a laboratory and other equipment.
The mine contains a resource of 136 million tons averaging 0.37% copper. In April, Nord commissioned The Winters Group to prepare a feasibility study, which concluded that reserves total about 15 million tons grading 0.45% copper, with a stripping ratio of 0.2-to-1.
The study went on to state that the operation could produce 18.9 million lbs. copper annually at US53 cents per lb. for the first six years. Throughput would be 7,500 tons per day, though the company is already evaluating the possibility of doubling capacity.
The cost of returning the mine to production is estimated at US$8 million, whereas total capital costs for the life of the mine, including acquisition costs and working capital, are pegged at US$15 million.
Nord Resources expects to benefit from the SX-EW experience of its 28%-owned affiliate, Nord Pacific (npf-t), which owns a 40% interest the Girilambone copper mine in New South Wales, Australia. For its participation, Nord Pacific will receive 20% of the cashflow from operations after Nord Resources has recovered its investment.
Nord plans to resume exploration at Johnson Camp, including geophysics and drilling, this summer. A US$250,000 program will attempt to evaluate oxide targets around the mine, as well as test for a porphyry target at depth.
Mineralization is hosted in lower Paleozoic sedimentary rocks, which have been intruded by a Laramide stock. The primary minerals at Johnson Camp are copper oxides, malachite, chrysocolla and chalcocite.
Johnson Camp is fully permitted. Nord has only to raise the money and wait for higher copper prices before making a production decision.
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