Summo extends Centennial deposit in Arizona

An ongoing 50-hole drill program at the SE Extension copper oxide deposit in southeastern Utah continues to yield higher-than-expected grades for owner-operator Summo Minerals (SMA-T).

Covering a 2,200-by-800-ft. area adjacent to the proposed Centennial pit, the program is designed to infill between 15 previously drilled holes and to test the newly discovered Centennial SE Extension zone, along strike to the southeast. Fourteen of the 15 holes cut the new zone over an average thickness of 44 ft., the average grade being 0.504% copper.

To date, Summo has completed 44 additional holes, and results are available for four of them. After hitting an average grade of 0.65% copper over 48 ft. in 23 of the holes that cut the new zone, these last four averaged 0.82% copper over 35 ft.

Highlights include:

– 50 ft. (from 230 ft.) grading 0.59% copper in hole 36;

– 20 ft. (from 280 ft.) of 2.37% copper in hole 37;

– 30 ft. (from 220 ft.) of 0.51% copper in hole 39; and

– 40 ft. (from 260 ft.) of 0.57% copper in hole 40.

The new zone lies 250 ft. below surface, in the Dakota sandstone and in the underlying Burro Canyon Formation sandstone. Mineralization consists of fine-grained chalcocite and bornite, and the structure remains open to the southeast. Initial acid and cyanide leach tests on the new intercepts showed recovery rates above 95%.

The project lies at the southeastern end of the faulted Lisbon salt anticline. The Lisbon Valley Fault is a major-axial structure that exhibits up to 4,000 ft. of displacement and, outward from the fault, as much as 1,500 ft. along favourable sandstone beds.

The Centennial is the largest of three copper oxide deposits outlined on the Lisbon Valley property.

Overall reserves (at a copper price of US90 per lb.) have been pegged at:

– 25.7 million tons grading 0.475% copper at Centennial;

– 6.5 million tons of 0.311% copper at the Sentinel deposit; and

– 3 million tons of 0.624% copper at the GTO deposit.

At a copper price of US$1.10 per lb., total reserves rise to 46.5 million tons of 0.424% copper, for an additional 71 million contained lbs. copper. All three deposits remain open to expansion.

Lisbon Valley is already fully permitted for an open-pit/heap-leach operation. Production is projected to be 40 million lb. cathode copper annually at a cash operating cost of US48 per lb.

The permitting was obtained in 1997, when a US$45-million project loan was approved for the mine. An environmental challenge, however, delayed development until it was defeated in 1999, but the loan commitment expired in the interim.

Currently, the Lisbon Valley project is the subject of an updated feasibility study, scheduled for completion by the end of June.

Summo is involved in renewed financing discussions and has already signed an agreement with Kellogg Brown & Root to provide contract-mining services and supply a new mobile equipment fleet. Summo is also negotiating with the Industrial Company to perform engineering and construction work, possibly beginning in the latter half of 2000.

The property, which comprises about 5,940 acres, is in San Juan Cty, about 45 miles southeast of Moab.