Michigan copper area ripe for revival

Looking around this small town and the others that surround it, one gets a feel for the cyclical nature of the metals mining industry. Remnants and reminders of the pre-1970s glory days — copper light fixtures, impressive displays of native copper, lingering copper mills — are everywhere. Home of the first big metals rush in the U.S., the Keweenaw Peninsula has produced more than 18 billion pounds of mostly native copper since the 1840s. Yet, with the exception of Metall Mining’s (TSE) Copper Range mine, 60 miles to the southwest, producers have moved out of the peninsula, victims not so much of depleted reserves but of successive copper price slumps in the ’60s and ’70s.

So with the price of a pound of copper hovering well above the $1 level, the area is ripe for yet another revival. Great Lakes Minerals (TSE), which has picked up three copper properties in the area and has the right to first refusal on another 1,520 acres, agrees.

The Toronto-based junior is moving quickly to confirm combined sulphide reserves, outlined by Homestake Mining (NYSE) and Inco (TSE) in the mid-1970s, of 5.1 million tons grading 2.7% copper, and native copper reserves of eight million tons averaging 0.8%.

Great Lakes acquired a 50% interest in the properties from privately owned Michigan Mining and Manufacturing and has agreed to spend US$500,000 per annum on exploration over a 3-year period.

When The Northern Miner visited the property in mid-October, the partners were drilling their ninth infill hole on the 543 South sulphide deposit and had just received some impressive results from the third hole, which returned an 84-ft. section grading 3.5% copper (including 20 ft. grading 7.6%). So far, the joint venture has been successful in confirming and even enhancing Homestake’s 543-S estimate of 3.1 million tons grading 3.1% copper, to a maximum depth of 500 ft.

A prefeasibility study could begin by the end of the year if the joint venture is able to confirm the previous reserve estimate with its 8,000-ft. drill program, said Nicholas Tintor, president of Great Lakes.

“The game plan at the moment is to outline a high-grade minable tonnage,” Tintor said. I’d like to see a 3-4% copper grade to ensure some protection on the downside.”

He believes the company can mine profitably at a copper price of about 80 cents, based on a preliminary analysis.

When the partners complete the 543-S drilling, they plan to move their rig to the St. Louis deposit 20 km to the west, where native copper reserves of eight million tons grading 0.8% copper have open pit potential. The G-2, another sulphide deposit with preliminary reserves of one million tons grading 2.8% copper, also warrants further investigation.

The deposits, occurring within Proterozoic flow-top breccias and conglomerates, differ from those currently being mined at Copper Range, where pervasive mineralization occurs throughout a shale unit. Homestake and Inco estimated mill recoveries of 95% for the sulphide deposits and 75% for the native copper, open pit deposit. The mill at the nearby Centennial mine, built by the joint venture in 1974, has the capacity to take the Great Lakes feed, but would need to be refurbished to process sulphide ore. Metall has expressed an interest in buying Great Lakes’ concentrate for its Copper Range smelter.

The Centennial mine, currently at the preproduction stage, gives an indication of what it would be like to develop a mine on the Keweenaw Peninsula. It appears that, unlike some other American states, mining’s impact on the environment is not a pressing concern in Michigan. In fact, an exception in the wetlands protection act allows mining companies to use the sensitive wetlands for tailings disposal.

“We’re not looking for any real difficulties in permitting,” said Erland Anderson, manager of U.S. Operations for A.C.A. Howe International Pacific, a consulting firm for both the Centennial and Great Lakes projects. “We might have to meet some stringent standards, but nothing we can’t deal with.”

Anderson is not anticipating any labor problems either. “The local population up here still blames the union for the demise of mining,” he said. “This is a mining community.” And labor costs are low — US$10 per hour at the nearby Copper Range.

Costs in general are much lower than anywhere in Canada, and the infrastructure is well-established. “If you were to put that deposit in Ontario, it wouldn’t be half as exciting,” Tintor remarked.