Great Lakes may lease mill

Great Lakes Minerals (TSE) is considering leasing an existing mill 23 miles from its 543-S copper deposit in order to be in production within a year.

The deposit lies on the Keeweenaw Peninsula in Michigan. Independent engineering reports, one by Kilborn Engineering, conclude that the Centennial mill, built in the 1970s by Homestake Mines and now owned by local businessmen, is in good condition and could process the 543-S ore.

The Centennial mill is fully permitted and, because the 543-S material is low in iron sulphides, waste rock does not pose the environmental problem of acid runoff. In fact, says President Nicholas Tintor, runoff would be acid neutralizing.

Great Lakes has been negotiating with Metall Mining (TSE) to process the 543-S material at Metall’s Copper Range mine and metallurgical facilities about 80 miles away. Great Lakes Chairman John McBride says he favors the Centennial mill option because it would reduce trucking costs and allow Great Lakes greater control.

The 543-S deposit hosts proven, minable reserves of 1.28 million tons grading 4.4% copper and could produce about 20 million lb. copper a year, the company says.

Noranda Exploration, a unit of Noranda (TSE), has started an exploration program on a 42,000-acre parcel of land on the peninsula, not including the 543-S, in a joint venture with Great Lakes.

Noranda, the operator, can earn a 60% interest by spending US$4 million on exploration and paying Great Lakes $135,000 over four years.

When Great Lakes went public in 1991, it had the right to earn a 50% interest in three deposits. Now, says McBride, it holds a 100% interest in five deposits as well as participating with Noranda on an aggressive exploration program. Its only ongoing obligations are payments to property vendors amounting to about $100,000 annually.