Golden News Resources (VSE) has the right to acquire Minera Sanex, a Mexican copper company owned 51% by private individuals and 49% by Chutine Resources (VSE).
Minera Sanex owns the San Antonio group of concessions in Sonora state. The concessions contain about 6 million tons grading 1% copper, within the Luz del Cobre deposit.
A preliminary feasibility in 1991 indicated the deposit could be exploited using in situ leaching and solvent extraction-electrowinning (SX-EW) at an operating cost in the order of US35 cents per lb.
In situ leaching involves injecting a weakly acidic solution through the orebody from small-diameter holes drilled from surface. The leachant is collected underground and pumped to surface. The copper is then extracted using standard SX-EW technology.
Luz del Cobre is tabular in shape, measuring 400 by 160 metres and averaging 30 metres in thickness. Previous owners conducted extensive underground development for the collection of leaching solutions.
Golden News has commissioned KD Engineering of Tucson, Ariz., to conduct a final feasibility study.
Preliminary estimates put the capital cost at US$5.2 million for a 10-million-lb.-per-year operation.
Following a 120-day period for a due diligence review, Golden News will pay US$1.7 million with the balance of the US$4.7-million purchase price. This will be paid in instalments over three years.
The payments will be split between the two vendors while the Mexican group retains a 2% net smelter return royalty to a maximum of US$3 million on the sale of copper, plus a maximum of US$3 million on the sale of gold. Golden News has about 9 million shares outstanding and $600,000 in working capital. It plans to raise an additional $2-3 million through a private placement in the next 60 days.
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