Nord gets green light for mine

A feasibility study has determined that the Johnson Camp copper mine near Tucson, Ariz., can be reopened profitably now that prices for the red metal have improved.

Nord Resources (NRDS-O) purchased the 2,723-acre mine site in June 1999, when copper prices were US65 per lb. The price has since climbed to as high as US85, though stockpiles have beaten it back to less than US80 per lb.

With an investment of US$13.5 million, Nord says it can reopen the mine and produce 19.7 million lbs. annually over the next 11 years.

Nord issued 1.6 million shares to Summo Minerals (SMA-T) for proprietary data and the right to buy the mine from Arimetco International. Nord completed the US$1.9-million purchase, of which US$310,000 was paid on closing with the remainder payable over three years.

Assuming a copper price of US85 per lb. for the first two years, climbing to US95 in the fourth year, Nord estimates gross revenue could top US$200 million over the life of the mine.

Operating costs are pegged at US63 per lb. over the life of the mine, including US21 per lb. for mining, US32 for processing and US10 for administration and other expenses.

Pretax cash flow from the operation is estimated at US$43 million over the mine life.

Nord’s 28.5%-owned affiliate, Nord Pacific (NPF-T), which operates the Girilambone copper mine in Australia, will help manage Johnson Camp. Also, Nord Pacific will be entitled to 20% of the cash flow after Nord Resources has recovered its investment.