Tintina grows Black Butte’s copper

VANCOUVER — With an upgraded resource estimate for a second deposit at its Black Butte project in Montana now in hand, Tintina Resources (TAU-V) is ready to revamp the project’s recent economic assessment while it awaits permission to drive a decline into the project’s main copper deposit.

Tintina has been busy at Black Butte since acquiring control of the property in 2010. In the first two years Tintina completed 54,000 metres of drilling, updated the resource at the flagship Johnny Lee deposit and completed a preliminary economic assessment (PEA).

Now the company has boosted Black Butte’s measured-and-indicated copper resource above 1 billion lb. by upgrading the resources within a second deposit. The Lowry deposit lies 2 km east of Johnny Lee and holds five zones of copper mineralization, of which the Middle zone is the largest and highest grade.

The Middle zone is now home to 4.1 million indicated tonnes grading 2.94% copper, 0.1% cobalt and 15.1 grams silver per tonne, plus 801,000 inferred tonnes averaging 2.58% copper, 0.1% cobalt and 14.1 grams silver.

“Infill drilling on the Lowry deposit’s Middle zone upgraded most of the resource to indicated status,” Tintina’s vice-president of exploration Jerry Zieg says. “The addition of the indicated resource on the Lowry deposit achieves our goal of over 1 billion lb. high-grade copper resource. The additional measured-and-indicated resources justify examining the opportunity for a significant expansion in mill throughput, and/or a longer mine life for a future Black Butte copper operation.”

Tintina completed a first-pass PEA for Black Butte in July. The study contemplated the Johnny Lee deposit, which at the time contained 553 million lb. copper in its indicated resource. The PEA determined that a US$210.4-million underground mine could process 3,300 tonnes per day through a conventional mill-and-flotation circuit to produce a single concentrate. Resources at the time supported a 14-year mine life.

Using a copper price of US$2.97 per lb. at an 8% discount rate, the Black Butte operation carried a pre-tax net present value of US$145.8 million, and would have generated a 20.4% internal rate of return.

A few months later, Tintina expanded Johnny Lee with a new estimate that pegged the deposit’s measured-and-indicated resources at 11.6 million tonnes grading 3.57% copper, 0.1% cobalt and 13.4 grams silver. Inferred resources grew to 1.5 million tonnes averaging 2.91% copper, 0.092% cobalt and 13.6 grams silver.

Adding together the new Lowry resource and the earlier Johnny Lee resource brings Black Butte’s current count to 15.7 million measured-and-indicated tonnes grading 3.4% copper, 0.1% cobalt and 13.9 grams silver, plus 2.3 million inferred tonnes averaging 2.8% copper, 0.09% cobalt and 13.8 grams silver.

Tintina now plans to revamp its Black Butte PEA based on the newly expanded resource. The vision could incorporate a higher throughput, or a longer mine life. The company plans to release the new study before mid-year.

Copper mineralization was discovered at Black Butte in the 1980s, but the last of a series of owners turned the property back to its rancher owners in 1993. In 2010, members of the original discovery team — now working with Tintina — reconnected with those property owners. By May 2010 Tintina had inked mining leases covering 5,000 acres of private ranch lands, which contain all known resources at Black Butte to date.

Since September 2010 Tintina has completed 54,500 metres of drilling, which added to 37,500 metres of historic drilling data to define the resources at Johnny Lee and Lowry.

The Middle zone at Lowry is a tabular unit of copper-cobalt-silver mineralization within fragmented, silicified and dolomitized shale and carbonate. At its north end the deposit is 265 metres below surface, but it dips gently south, reaching a depth of 720 metres below surface. At present the Middle zone measures 600 by 300 metres. Its thickest parts are 80 metres tall.

Johnny Lee is a similar deposit. Sitting 2 km west of Lowry, Johnny Lee also hosts copper, cobalt and silver in bands of massive chalcopyrite that are bounded by pyritic layers within shale and conglomerates. Johnny Lee is divided into two segments: the Upper zone lies 30 to 200 metres below surface and reaches 30 metres in thickness, and the Lower zone lies between 340 and 500 metres depth, at up to 13 metres thick.

Johnny Lee and Lowry are both amenable to underground mining. At the start of the year Tintina submitted an application to the Montana authorities to drive a decline to Johnny Lee, to provide access for underground drilling and bulk sampling of up to 10,000 tonnes of mineralized material for metallurgical testing.

The company anticipates approval for the plan before mid-2013. Community and regional support for the project is strong because Montana has a long history of mining, and because the area around Black Butte is struggling economically, and residents are keen for new employment opportunities.

News of the Lowry resource had no impact on Tintina’s share price, which remained at 27¢. The company has a 52-week share price range of 21¢ to 50¢, with 142 million shares outstanding.