Final permits are in place for the Luz del Cobre copper deposit, 100 miles east of Hermosillo in Mexico’s Sonora state.
Golden News Resources (VSE) plans to develop the property as an in situ leaching operation.
The deposit contains an estimated 6 million tons grading 1% copper and is expected to produce 10 million lb. copper per year at a cash cost of US35 cents per lb. The in situ process involves injecting water into a grid of wells drilled into the deposit. The water is expected to become weakly acidic when it combines with the deposit’s 5% pyrite content, allowing it to leach out the copper mineralization for collection in a series of underground drifts and crosscuts. Copper will then be recovered by means of solvent extraction-electrowinning.
The project’s capital cost is estimated at US$8 million (down from a previous estimate of US$10 million). Golden News has about $7 million in working capital and additional money may be available through the exercise of outstanding warrants.
The company expects to begin breaking ground in November and to be in production by mid-1995.
Golden News has paid about US$2 million to date and is required to pay a further US$2.7 million over the next two and a half years to acquire the property from a group of private investors and 49% owner Chutine Resources . The property also has a 2% royalty capped at US$3 million.
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