Capstone adds copper resources at Minto (June 13, 2011)

Capstone Mining (CS-T) has bulked up measured and indicated resources by 219 million lbs. at its wholly owned Minto copper-gold mine in the Yukon. The miner also combined two deposits at the project, which were once thought separate, into what is now known as the larger Minto South deposit. 

The resource boost resulted from a National Instrument 43-101 compliant resource estimate for the Wildfire and Copper Keel deposit at Minto. The estimate, based on 134 drill holes, delineated 9.3 million measured and indicated tonnes grading 1.06% copper, 0.36 gram gold per tonne, 3.24 grams silver per tonne for 218.6 million lbs. contained copper, 107,900 oz. gold and 975,600 oz. silver. 

“The exploration success at Minto continues to be translated into resource additions that support near-term growth strategy at our mining operations,” said Brad Mercer, vice-president of exploration, in a press release. 

“We have been pretty successful,” comments Cindy Burnett, Capstones’ vice-president of investor relations. “We have had eight discoveries (at Minto) in five years.” Burnett adds that the company continues to explore near the mine. 

 Currently the mine’s life stands at nine years, with the Area 2/118, Ridgetop, Minto Main, Minto North and Minto East deposits. 

The company says geological modelling using the new data, which was gathered in 2010 and early this year, indicated that Wildfire and Copper Keel are a southeast mineralized extension of the Area 2 portion of the Area 2/118 deposit, and not separate as previously thought. The sites have been merged to form the Minto South deposit.

More specifically, the refined resource model, which now consists of 369 drill holes, shows continuity of mineralization between Copper Keel and the deeper levels of Area 2. The model also indicates that there was continuity of mineralization between Wildfire and the shallower levels of Area 2 before continuity was removed by erosion.

The new geological model was used to calculate a resource for the Minto South deposit. Using a 0.5% copper cut-off grade, Minto South hosts 36.4 million measured and indicated tonnes grading 1.03% copper, 0.35 gram gold and 3.5 grams silver for 827 million lbs. contained copper, 412,800 oz. gold and 4.1 million oz. silver. Minto South has another 7.4 million tonnes 0.82% copper, 0.23 gram gold and 2.8 grams silver in inferred.

Currently, the company has two drills turning at the Copper Keel region and plans to bring in another rig this year. “The area still has significant exploration potential,” Burnett says, noting the company will follow-up the additional resource estimate at Copper Keel and Wildfire with
a prefeasibility study on the entire property during the third quarter.

Burnett says in terms of expansion, the prefeasibility study would be phase six. However, the company is currently pre-stripping Area 2/118, which would be mined from underground early next year. The Minto mine, located 240 km north of Whitehorse and in production since 2007, has been an open-pit operation so far. 

Minto’s Main pit in the first quarter of 2011 produced 8.1 million lbs. copper in concentrates, but now the pit is fully depleted, Burnett says, adding that the company has been stockpiling ore from the Main pit, and will continue to use the stockpiled ore until Area 2/118 is ready to mine. The mill is expected to churn through 3,750 tonnes per day for the year. 

For 2011, Capstone forecasts copper production of 39 million lbs. in concentrates from the Minto mine, and another 41 million lbs. from its Cozamin copper mine in Zacatecas, Mexico.

The company also has the Kut-cho polymetallic project in northern British Columbia, for which it released a prefeasibility study for in February. 

On news of the resource addition, Capstone’s shares closed up 3¢ to $3.57, within a 52-trading range of $2.05-$4.99.