AI
Tuesday, April 21, 2009 6:21:36 PM
SURPRISE!
Note the date. May be old news but it's historically pretty accurate.
Note the numbers.
IMO WE HAVE OUR HANDS ON A MONSTER. I think this is going to be the largest copper mine, and other metals, in the world.
I think the Milford mineral belt is unbelievably rich and MD has got it covered. WHOOOOOOPPEEEEEEE!!!
AMERICAN OWNED!!!
I think MD likes the Western Utah Copper name better than CK
Check out the new site.
http://wuccompany.com/
IMO concentrate is HOURS from production. I THINK the best explanation for the behavior of the company over the last few months is that MD believes there is a large "shorting". Whether
true or not, I think he wants to drop a bomb all at once hoping to trap the NS. IMO
The numbers in the report have changed SIGNIFICANTLY over the past couple of years with more proven assets. 3.5B, although certainly large, is not out of line with the numbers that are probably going to hit us soon. IMO
Oh, and I understand that they are looking for more "Hammers" for the chain gang!!!!!!!! lol
Executive Summary & Business Plan
Western Utah Copper Company, Milford Utah
May 1, 2006
INDEX
A. Introduction, Area History, Studies and Reports
Business Model for Current Mining Operations
Milford Utah District Minerals
Methods of Metal Recovery
New Technology - VSI (Vertical Shaft) Impact Mills
New Electro-Winning Technology
Phase One
Phase Two
Phase Three
Phase Four
C. Mineralogy Of The Ores - PMET, Wolfgang Baum, MDA
Hidden Treasure Mine Mill
Mineral Reserves
Reserves Certified by Mine Development Associates
Reserves Certified by Havenstrite Management
Reserves and Resources Certified by Peter Joralemon
West Hills Mine Costs
D. Process and Sale of Concentrates
Cash Flow Projections
The Concentrator
Exit Strategy
WUCC Management
A. Introduction
Western Utah Copper Company (WUCC), a privately held Utah corporation which owns or controls more than 100,000 acres of mineral properties, real estate, and other assets in Beaver County Utah, has collected a vast number of mining claims, land ownership, land leases, mining rights, buildings and equipment (as detailed below) into a property that is 18 miles by 8 miles and contains a gross value, if all were mineable, of twenty billion dollars worth of metals. The metals, in order of total value are: tungsten, copper, silver, gold and molybdenum, and as discussed below, each different ore body is processed differently, but with the same mill, to recover all of the metal that can be economically recovered, to maximize the total value recovered.
To date, all the required permitting has already been obtained to be in full production and make copper, gold and silver concentrate. WUCC will begin its operations in four phases, using advanced cutting edge technology, and taking full advantage of the company’s studies and reports compiled at great expense by experts in the mining industry.
Area History
The Milford area has produced copper, silver, lead, zinc, tungsten, fluorite, uranium, and perlite. Deposits of kaolinite and alunite with possible economic potential exist. To the close of 1910, the area had produced about 17,000 ounces of gold, 16,000,000 ounces of silver, 31,000,000 pounds of copper, 350,000,000 pounds of lead, and 5,000,000 pounds of zinc. The Rocky and Beaver Lake Ranges have produced 8,000 ounces of gold, 780,000 ounces of silver, 34,000,000 pounds of copper, minor amounts of lead, zinc and tungsten. (James A. Whelan Research Geologist, U.S.M.S. 1973 paper)
Beginning in the late 1,700’s with the coming of Father Escalante, the Milford area has been rich in mining history and the ore to go with it. When Mormon pioneers first ventured into the valley in the mid 1,800’s at least one mine, first thought by the pioneers to be worked by early Indians, was in-fact a silver mine operated by early Spaniards. Mormon pioneers mined it for metal to make bullets. They found them to be extra hard, learning later the hardness was due to silver and thus a lead-silver mine and not a pure lead mine as first thought. This mine was a key element in the organization of the Lincoln mining district some 15 Miles south east of the Companies copper holdings.
In September of 1875 James Ryan and Samuel Hawkes discovered what would later become one of the biggest silver producers in its day and American history, the Horn Silver mine. Along with it came one of the most notorious mining camps in the west, with shootouts common on a daily basis. The town fathers found it necessary to import a gunslinger sheriff to clean up the town. From Boot Hill in Pioche Nevada, A Sheriff Pearson was imported to do just that and as the story goes shot it out with more than 50 desperadoes in the streets of Frisco before his job was done.
Later the infamous Jay Cooke who cleverly invented a way to finance the civil war by selling federal bonds, was engaged to help finance a railroad that later served both the Horn Silver mine and the Western Utah Copper Companies Cactus mine. By 1879 the United States Annual Mining review and stock ledger was calling the Horn Silver “Unquestionably the richest silver mine in the world now being worked”.
Later the rich ore caused such greed that the mine operators took out the pillars ordinarily left in place to secure the stopes. This caused a terrific cave-in that reportedly blew out windows in Milford 17 miles away. In less than a year the mine was back in business again at a limited capacity and worked sporadically up until the 1940’s.
The Horn Silver mine was a key element in the organization of the San Francisco Mining District. The Horn Silver mine produced substantial quantities of copper, gold, lead and zinc in addition to the rich silver ore. The Horn Silver mine borders the company’s holdings on the west. The Companies Cactus mine and Beaver carbonate mine, are both located near the Horn Silver mine in the San Francisco Mining district.
The Star mining district is located just west of the Town of Milford and also borders the companies copper holdings on the south. The Star District produced substantial amounts of copper, gold, silver, lead and zinc generally up to about 1948. The first reported substantial workings were recognized by the formal organization of the Star Mining District around 1872. The deepest reported workings being the Moscow mine, reaching the 1,600-foot level.
Of interest may be the fact that the President and CEO of Western Utah Copper Company, Mark D. Dotson was born near the Gold Crown mine in the star mining district in 1958. There his father worked a gold mine. At age 5 after having been bit by a western diamond back rattle snake at age 3, the family moved to the town of Milford.
Western Utah Copper Company will conduct significant modern operations in the Rocky Mining District organized in 1872. Below a snapshot from the USGS report of the day, January 5, 1874 as furnished by MR. G.K Gilbert:
Rocky District, Utah.
[From notes furnished by Mr. G.K. Gilbert.]
“This district was discovered February 17, and organized March 27, 1872; work began May 1 following. It is situated on the Pioche and Salt Lake road, called sixty miles from Fillmore. The mineral cropping’s covered an area of one-half mile square; the ledges are on the east face of the mountain. The general direction of lodes, &c., of the north group is east and west to southeast and northwest; south group, north and south; they dip with the country-rock the ores are base, milling; assays show the presence of gold in silver-bearing veins, $12 being the highest. The principal mines now worked are the Rockafellow and Severance, shaft down 46 feet; Champion, shaft down 30 feet; and Homestead, shaft down 44 feet; no mill. Mining labor costs $4 per day, and the average cost of sinking a shaft on a main vein is from $10 to $18 per foot. Grain, farm produce, &c., comes from Beaver Valley; timber, eighteen miles; lumber, forty miles; and fuel, eight miles west; and water, (the Beaver River,) two and a half miles east. There are 15 inhabitants in the district. It is not a stage-station, but on the Pioche and Salt Lake stage-route. The country-roads are good. No Indians.”
UNITED STATES ENGINEER OFFICE,
GEOGRAPHICAL AND GEOLOGICAL EXPLORATIONS AND SURVEYS
West of THE ONE HUNDREDTH MERIDIAN,
GEO. M. WHEELER,
Washington, D.C., January 5, 1874. Lieutenant of Engineers, in charge.
Beginning in the 1950’s the Rocky and Beaver lake districts once again became of interest for copper. Nearly all of the major copper mining companies have came to Milford in search of new copper deposits. In 1976 M.D. Regan of Bear Creek Mining (Kennecott) stated “The Milford area exhibits all the favorable geologic indications of a porphyry copper mega-district”.
New exploration techniques were developed for the exploration of copper magnetite skarns. Using hand held ground magnetometers beginning in about 1959, many new discoveries were made, some of which remain quite large. Included are the Bawana, Maria, Hidden Treasure, Candy B, and Valley.
In all, the mining districts had one thing in common, disparate fractionated ownership. All this owing to the very nature of greed and rich ore. Litigation was commonplace beginning in the late 1,800’s for encroachment. Lawsuits caused many mines to shutdown during trials, which even then could last for weeks or months.
As is the case with the company’s Cactus Mine in the early 1900’s, these delays often caused the mine to cave in and much production lost. Over the years many large mining companies came and went unable to assemble a large enough land package to properly operate a large operation, and accordingly kept moving.
Perhaps the single most important thing that the president and CEO of WUCC could have done was to assemble the land into one large land package. This effort began in 1989. Never before since the history of the mining districts in the late 1,800’s has this ever been done, much to the detriment of the business.
Now, WUCC has resolved the primary cause of age-old litigation by acquiring all the lands into one big package. Even in the early 1970’s litigation was ever present over prior ownership and encroachment. Now WUCC is poised for huge success with no restrictions on growth or mining.
The assets assembled by WUCC, a lifetime of work in these districts, as well as a huge data base, combined with the current upward metals trend, make this a once in a life time investment opportunity.
Studies and Reports:
Peter Joralemon Report: The single most comprehensive work in the combined Rocky and Beaver Lake mining districts historically has been the Peter Joralemon Report. Prepared in 1980 for Toledo Mining Company, the work is intended to represent a compilation of American Mining, Toledo, Shield Development, and Essex international. The work in the past has generally been the “Bible” in this region.
WUCC has assembled a large database that contains many daily memos, technical reports by Metcon, work done by Majestic oil, Noranda, American Mining, Shield Development, Essex International, and others. This represents years of working history in the mines as well as milling secrets. Enclosed in this business plan (Tab 1) is Metcon technical report: 73-38, 72-4, and EI-114.8.
Note that report 72-4 and 73-38 suggest substantial gold and silver recovery as part of new metallurgical practices at the mines. Typically this was ignored in favor of making cement copper.
In the day of these older operations the only option they had was to make cement copper. In order to do this they had to leach the copper from the ores. The Skarn ores contain much calcium carbonate and therefore would neutralize the acid. When older reports speak of metallurgical problems with the ore, generally that is it. The pregnant solution would then be leached out onto scrap steel and the steel sent to the smelter. Approximately 70% copper recovery was attained in this manner.
The historical operation processed approximately 450 tons per day through a ball mill, yielding a very good copper concentrate containing gold and silver. This copper concentrate according to Dave Belling the mill manager from 1971 to 1975 averaged 37.5% copper with high amounts of gold and silver. 800 tons was processed daily in a vat leach crushed to 1 ½ minus. The ball mill copper concentrate was then usually shipped to Baghdad or elsewhere. This they made a good profit on and were typically paid for the gold and silver. In making cement copper, the gold and silver is sacrificed. Historically many memos’ spoke of the need for a bigger ball mill to increase profits over the cement copper method. WUCC will make a flotation copper concentrate in similar fashion, but using cutting edge technology.
Integration and study of existing reports, work history, and past mistakes of the historical operations show that the biggest threat to profitably came from cold winter weather. The new mill WUCC is building has been designed to over come these mistakes by floor heating devices in combination with current technology.
Additional mistakes came from un-willingness to recognize the value of underground mining reserves and act upon them. Modern technology allows for very economical underground mining and WUCC management believes this to be the wave of the future. As soon as surface reserves are exhausted, WUCC will immediately go underground, and may in fact pursue underground high-grade reserves contemporary with surface mining operations. This in combination with the very high-grade ores available will make the WUCC operation among the most profitable of any modern operations.
Nevada Star Resources Corporation Feasibility Study: Following the Peter Joralemon Report, two significant works have been completed. The first is by Nevada Star Resources Corporation, who, in 1998, commissioned Mine Development Associates (MDA) of Reno Nevada to prepare a bankable feasibility study to determine the economics of mining and processing copper ore in a heap leach environment. In this environment the pregnant liquor from a leach pad is run through a solvent extraction, electro win plant which produces pure cathode copper which is saleable daily. The study also certified ore reserves and concluded that copper can be produced from this project area in a very economic manner.
Dr. William B. Wray Report: Later, at the request of, and for publication by the Utah Geological Association, a significant history was written and prepared by Dr. William B. Wray. This work is the most comprehensive and historically detailed to date on the Rocky Range, and Beaver Lake Mining Districts. Dr. Wray also wrote a companion history on the San Francisco Mining District.
Milford Utah District Minerals:
The following chart identifies the gross value of metals in the Milford Mineral Belt, located in Beaver County Utah District, and includes all metals whether mine-able or not, and is only intended to give the reader an idea of the real size and scope of the district. These estimates were prepared by Dr. William B Wray using all the third party generated data the company has available. These estimates could prove to be extremely conservative:
METAL QUANITY PRICE/UNIT VALUE_______
Tungsten 95,126,000 lbs $145.00 $13,793,270,000
Copper 2,436,200,000 lbs $ 1.60 $ 4,019,730,000
Silver 106,140,000 oz $ 7.20 $ 764,208,000
Molybdenum 8,208,000 lbs $ 35.00 $ 287,280,000
Total $ 19,212,938,000
The recent rise in the prices of all metals has been driven by demand from growth in China, India, and Pakistan. As the residents of each country become more and more modernized, it is not likely the demand will stop for many years to come thereby propping up the copper price for at least 10 years or more. The demand for copper in the USA has been dropping as growth in other countries outpaces that of the more modern USA. China is the world’s principal supplier of Tungsten.
B. Business Model for Current Mining Operations
WUCC’s business model for mining the Milford District is designed around the concept that mining must be able to continue even if metal prices drop to historic lows, WUCC is designed to maintain an operating cost below market expectations even if metal prices drop to historic lows. This includes the recovery of Magnetite, Moly, and tungsten. All very valuable, but not listed in the cash flow projections along with Copper, Gold, Silver.
WUCC, beginning with its first production estimated to be October 15, 2006, mine and produce in excess of 200 million pounds of copper having a gross value at a price of $2.00 per pound, or $400,000,000.00, at a cash cost of less than $0.66 per pound of copper. Of this, approximately seventy five percent will have valuable recoverable gold and silver which is expected to add, based on previous operations and smelter receipts, an average of 23.5% to the gross, or $29,610,000.00 for a grand total of $429,610,000.00.
While this represents a substantial portion of the proven ore, millions of pounds of copper are available that need only to be further developed by more, and ongoing drilling. Exploration potential for upside right now is limited only by the amount of money available to keep drilling out the ore zones. The project will likely be many times the size as stated herein. In addition to these surface estimates, the current underground reserves potential is well into the millions of pounds of high grade copper, gold, silver ores.
And while WUCC has listed its cost at $0.66 per pound, this is much more than the world wide average cost to mine, mill and recover copper ore. This makes our numbers extremely defensible in the face of world average costs. The actual cost based upon other current operations will be much less than stated.
Methods of Metal Recovery:
Each major ore body will require a different process to recover all of the metal that can be economically recovered. The first project will be to process the ore in the Hidden Treasure Mine. This mine, like the Maria, Candy B, Copper Ranch, Sunrise, and Valley is rich in copper oxide ore with considerable values in gold and silver. For this reason WUCC will combine several known technologies to allow full recovery of all three metals. In summary, the ore will be milled to a fine powder, concentrated by flotation, Vat leached with ammonia, or acid, in a closed circuit controlled environment, and fed into a SX/EW plant to produce cathode copper. The gold and silver will be precipitated out of the sludge remaining and processed off site.
Hidden Treasure Mine Mill: Construction has already begun on the Hidden Treasure Mine mill. It has been designed to process ore from the Hidden Treasure Mine and all other ore bodies in the District. The ore from the Hidden Treasure Mine will average 1.75% copper plus gold and silver. Mark Dotson, Don Foot and Dr. Rashoun Bappou have designed a mill that can process 2,400 tons of ore per day. This equipment will reduce the particle size of the rocks to 1/200 of an inch. Water and reagents will be added to form slurry. The reagents will cause air bubbles to stick to both the oxide and sulfide particles. When the metal rich portion of the slurry floats to the top it is skimmed off. The 2,400 tons of slurry will be concentrated to 100 tons of concentrate that will be over 40% copper. The copper is leached from the concentrate with ammonia, or acid. The pregnant leach solution (PLS) is processed through mixer settlers to produce enriched electrolyte. The copper will be plated out of the electrolyte by the electro-winning process. The residual concentrate can be sold to nearby processors where existing equipment can recover the gold and silver.
Construction should be complete and the plant operating at the end of October 2006. At this point the plant will be producing copper at the rate of 2,500,000 pounds per month at a cost of $0.66 per pound. The gold and silver credits will reduce this cost amount. The December 2005 spot price of copper was $2.00 for a net income of $1.30 per pound or $3,350,000.00 per month. This profit is at 1,200 tons per day and will double when 2,400 tons per day production is reached. See cash flow section for current, 3month, 15 month and 27 month LME based production estimates and LME based pricing (page 16).
Heap Leach Facility: While the mill for the Hidden Treasure Mine is under construction, WUCC will begin the process of developing a heap leach facility. This includes finding a location without valuable metal underneath, obtaining an economical source of sulfuric acid, or alternately, bacteria, and obtaining a heap leach permit. This facility will use sulfuric acid, or bateria, to recover copper from low-grade ores that have only copper. Some of these ores, to be leached, have already been stockpiled. Pregnant Leach Solution (PLS) that flows out from the heap leach will be processed to cathode copper in a SX/EW plant.
New Technology - VSI (Vertical Shaft) Impact Mills:
Using cutting edge technology never before used in the United States, WUCC will implement a process that has been used very successfully by Newmont Gold Corp. in Uzbekistan since 1996 to grind the ore. Based on in-house test results, later certified by Western States, and known technology, WUCC will implement VSI (vertical shaft) impact mills in conjunction with a horizontal shaft impact, and will implement a regrind ball mill to reduce the +30 mesh fractions to a finer grind to liberate more gold and more copper, to produce a product in the 50%, –200 mesh range for floatation. The largest portion of the product size will be in the 90-150-mesh size range. Since the largest grinding cost is born by the VSI, the small ball mill cost per ton is less than $0.50 per ton. The total cost to reduce mine run ore to the final floatable product is $4.62 per short ton of ore. The mill will process 1,200 short tons of ore per day at start up then 2,400 tons per day ASAP. (24 hours).
Note: Ball mills and similar historical grinding systems are less than 20% percent efficient. Modern VSI technology is almost 100% efficient and will do the same job for less than one half the cost.
Column flotation will be used in place of historic, problematic, and less efficient flat lying tanks. This will allow more contact time for the reagents to work and guarantee nearly 90% or more recovery. From this point on, industry standard processing will be employed to extract the concentrate using vacuum type con filters. Processing costs through the mill are estimated to be $4.62 per short ton of ore. Metcon testing (Table 4) indicates that the majority of oxide copper minerals are liberated at ten mesh. For example Maria 55 %, Hidden Treasure 68%, this in combination with column floatation will substantially decrease the total recovery costs as well as increasing recovery.
Tailings will be dewatered using derrick hi-dry or similar type systems in combination with standard thickeners. After the tails are dewatered, they will be used as backfill in the open pit mines and placed on the waste dumps, or designated storage areas. This is far more cost effective than spending $3.5 million to bond and build a tailings pond. Some of the tails can be sold for mortar sand at a profit.
New Electro-Winning Technology:
This is a new method of manufacturing electro-winning equipment that will be available for use in the Milford District. This technology does not use lead anodes that contaminate the copper and lower its value. It also requires much less labor to harvest and strip the copper off of the stainless steel cathode blanks. The power required to plate the copper onto the cathode blanks will be reduced by 25% to 30%. The new equipment will be owned and operated by the vendor (Bill Jacobs and company) that developed the technology on a tolling price per pound of metal basis.
Phase One:
Beginning May 2006, a 1,200/2,400-ton per day concentrator will be built substantially on, or near, the Nevada Star SX/EW site. Construction is expected to take 130 days. During this time a power line will be constructed to service the project with commercial power.
Beginning August 2006 stripping will begin on the Hidden Treasure open pit mine, along with haul road construction. It is anticipated the ore body can be stripped in 105 days. Tailings disposal will include dewatering and dry stacking nearby.
Phase Two:
Beginning at the completion of the construction of the new concentrator, a modified SX/EW plant will be built. The plant will be designed to vat leach concentrates, high-grade ore, and service a leach pad. Construction time is estimated to be 120 days.
Phase Three:
At the successful completion of the SX/EW plant, leach pads will be constructed on a scaled version of the feasibility study design. Construction time is estimated to be 120 days
Phase Four:
As soon as practical, and contracts for manufactured goods are secured, a manufacturing facility will be built. The facility contemplates using cathode copper to manufacture copper products for shipment directly into the market place eclipsing the middleman. This, as is the case with companies like Cerro Copper, will more than double the value of each pound of refined copper. This operation will be the only mouth of mine manufacturing facility in the USA.
Mineralogy Of The Ores (PMET, Wolfgang Baum, MDA:
Ore mineralogy can be complicated. However the ores of the Milford Districts are very straightforward. Among the most easily recovered are Chalcocite, Covellite, tenorite, malachite and many others named below in the mineralogy description section. Most of these go into solution with exceptional ease making recovery simplistic.
Hidden Treasure Ore: The Hidden Treasure ore (drill cuttings) contains elevated amounts of chalcocite and covellite and noticeable amounts of brochantite. The Hidden Treasure ore also contains higher amount of quartz and magnetite with moderate to minor amounts of diopside, biotite and relatively high grade, coarse-grained copper mineralization consisting of chrysocolla and malachite.
Maria Ore: The Maria ore contains higher grades of copper mineralization with fine to coarse grained chrysocolla and lesser amounts of malachite. In addition, there are trace amounts of secondary copper sulfides and chalcopyrite.
Bawana Ore: The Bawana ore contains disseminated chrysocolla mineralization with traces of malachite, further, trace amounts of covellite and chalcocite. Tenorite occurs with iron oxides.
OK Pit Ore: The OK Pit ore contains bimodal copper mineralogy, which consists of, disseminated malachite and major amounts of chalcocite with lesser covellite. Trace amounts of chrysocolla and tenorite.
Copper Ranch Ore: The Copper Ranch ore contains relatively high-grade copper mineralization with chrysocolla and malachite representing the major copper minerals. Traces of, chalcopyrite, covellite, chalcocite.
Sunrise Ore: The Sunrise ore contains abundant chrysocolla with bornite and chalcopyrite increasing with depth.
Mineral Reserves:
It should be noted that often a very fine line is all that exists between ore reserves, probable reserves, and inferred reserves. A good example of this would be the Candy B ore body shown below at 1.26 million tons. Ongoing drilling has already upgraded this deposit to over 7 million tons inferred. The current model suggests up to 40,000,000 tons for the Candy B. If this ore body never exceeds the 7,000,000 tons it will add over 150,000,000 pounds of copper to the reserves base. Almost doubling what is modeled herein. 350,000,000 pounds of copper at today’s price with the gold and silver is over one billion dollars. Management believes the project will grow to far exceed these numbers many times.
Reserves Certified by Mine Development Associates: MDA, per table 4.3 (Tab One), has certified as proven and probable the following reserves using the ultimate pit curves as designed by Medsystem Lerchs-Grossman:
Hidden Treasure Mine - 802,000 tons at 1.75% copper-cutoff at .57% - 28,081,000 pounds of copper
Since the project will also implement the SX/EW operation as contemplated by the Nevada Star Resources Corporation Feasibility Study, a substantial amount of rock that runs .3-.5% copper which would be either not be mined, or would be put in the waste piles, is now ore for the leach pads. It is estimated to contain at least one million pounds or more of copper. Hidden Treasure concentrate (report 72-4, and memo December 14, 1973 Clement K Chase) and Inspiration smelter schedule ran the following: 32.8% CU, 0.87 oz/ton gold, 74.6 oz/ton silver or, $826.56 per ton copper, $351.48 per ton gold, $432.68 per ton silver.
Maria Mine - 559,000 tons at 1.13% Copper-cutoff at .42% - 2,594,000 pounds of copper
Note: same as above except the marginal materiel will be more, perhaps1.5 million pounds of copper.
Copper Ranch Mine - 280,000 tons at 1.13% Copper-cutoff at .43% - 6,327,000 pounds of copper
Note: same as above with approximately 350,000 pounds of copper.
OK Mine - 1,223,000 tons at 0.73% Copper-cutoff at .26% - 7,804,000 pounds of copper
Havenstrite Management certified 1.9 million tons at .62% copper and 23,700,000 pounds of copper. This number, based on the past work of Dotson Exploration Inc. at the OK Mine, is valid.
MDA Tons Certified: 2,864,000 - pounds certified 64,806,000
pounds probable 74,526,000
Reserves Certified by Havenstrite Management (Tab Two):
Mary I Mine - 1,100,000 tons at 0.35% Copper (.5-1 strip) - 7,700,000 pounds of copper
Cortex Dumps - 200,000 tons at 0.55% Copper - 2,200,000 pounds of copper
Essex OK Dumps - 1,770,000 tons at 0.45% Copper - 15,930,000 pounds of copper
Havenstrite tons certified: 3,070,000 - pounds certified 25,830,000
Reserves and Resources Certified by Peter Joralemon (Tab Three):
Note: MDA found a high level of confidence in the Peter Joralemon Report with respect to tons and grade.
Candy B - 1,230,000 tons at 1.26% Copper - 30,996,000 pounds of copper
More drilling will be required to elevate this to reserves status. At this point it is only a resource. Drilling will likely substantially increase these figures. Using 651 scraper, this ore will be economic to strip and mine as it is overlain by gravel. This ore body is expected, based upon historical assay data, to have a very substantial gold and silver credit. (See also discussion under Mineral reserves above)
Bawana Extension - 1,207,000 tons at 1.84% Copper - 44,464,800 pounds of copper
Even though Peter Joralemon has listed a portion of this as reserves, WUCC classifies all of this as resources until more drilling is done. It is very clear a substantial amount of ore is available at the Bawana extension. Dr. William B. Wray, in a memo to WUCC CEO Mark Dotson dated August 17, 2004, finds a very real possibility of an underground mine-able resource of 1,900,630 tons of ore at an average grade of 1.99% copper, and 75,645,074 pounds of copper. This is a very conservative figure. Consulting geologist David Hartshorn has found a strong probability that the Bawana ore zone has a sub-parallel (B-32 DH) strand that is much bigger that the original zone. Evidence suggests that it may outcrop beneath the quartzite WNW of the Bawana pit. This allows a very large open pit mine potential of more than 2 million tons. While more drilling needs to be done to conclusively define open pit and underground mine-able reserves, the strongest probability is that in a combination of open pit and underground, more than 3.5 million tons of good grade ore will be developed. 3,500,000 tons at an average grade of 1.5% copper or 105,000,000 pounds possible.
Sunrise - 294,000 tons at 2.72% Copper - 15,993,600 pounds of copper
Old Hickory - 850,000 tons at 1.25% Copper - 21,250,000 pounds of copper
Peter Joralemon, because of the visual size, speculated that 4,000,000 tons at .50% copper might exist. The Old Hickory skarn is large and relatively unexplored. To be safe, WUCC has estimated a much smaller tonnage with a slightly higher grade. While ore is in sight, much drilling will need to be done to substantiate the tonnage and grade, therefore this is only possible ore. A memo dated October, 1971 by J.K. Jones (Essex) indicates that Shield Development had many drill holes with substantial grade and mineralization from the Old Hickory in widths of 50-100 feet, but they were unable to locate the drill hole location map to correspond with them.
Joralemon tons: 3,581,000 - 112,843,000 pounds of copper
Essex Mill site - Crushed vat leach rock 650,000 tons at .58% copper - 7,540,000 pounds of copper
Note: part of this property belongs to someone else. The owner is willing to work out a favorable arrangement to process.
Cactus-New Years Oxide - 350,000 tons at 1.10% Copper - 7,700,000 pounds of copper
Total pounds of Certified Copper - 115,539,000
Total pounds of probable Copper - 112,760,600
Grand total pounds of copper - 228,300,400
Note: This does not include the substantial resource of cactus mine sulphide ores estimated to be more than 2,000,000 tons at 1.5% copper or 60,000,000 pounds of copper, or those listed as resources such as the Candy B, Hidden treasure extension, valley deposit, copper ranch extensions, or any of the underground potential which may exceed the open pit operations in tonnage at some point.
West Hills Mine Costs (Tab Five, sheet 4-14):
West Hills Mine Cost MDA estimate
Hidden Treasure $1.25 per ton $1.00 per ton
Waste $0.90 $0.90
Alluvium $0.50 $0.65
Average $0.88 $0.85
These costs include haulage to the processing sites, and road and waste pile maintenance. West Hills Excavation’s pricing included a profit. The cost will be substantially the same now, except for an increase in fuel, which will add approximately $0.01 per pound of copper, at a fuel cost of $2.50 per gallon. MDA found the costs submitted by West Hills Excavating to be accurate and credible Therefore WUCC’s costs to mine would be substantially as stated by MDA (Sheet 4-14).
Mining will be done using four 60-ton caterpillar rock trucks, two 990-size loaders, one D-10 dozer and all the usual fleet of equipment, which accompanies this type of mine operation.
The costs listed below are generally 20% higher than the actual costs, except for mining, which is exact. The mining cost is calculated for the Hidden Treasure ore body and takes into account a portion of the ore body already stripped. As mining progresses to other ore bodies, the cost will vary and increase slightly. It is likely the worst-case scenario will add no more than $2.00 per ton, or a total of $3.25 per ton, (Candy B for example).
Note: The actual ore and waste costs will average $0.60 per short ton
Cost review: Crushing and grinding $4.62 per short ton
Mill and process $4.60 per short ton
Mine costs $1.25 per short ton *
*Includes tails backhaul. Adjust mine cost per strip ratio Example: Strip of 2.7:1 is 2.7 X $1.25, or $3.37 total mine cost
Equipment cost $0.40 per short ton
Reagents $1.50 per short ton
Grand Total $12.37 per short ton *
*Includes power
Process and Sale of Concentrates:
Before Phase Two is implemented, WUCC has pre-sold all of its copper, whether concentrate, or cathode to Katamin metals of St Louis Missouri, and they will ship concentrate to Kennecott or Phelps Dodge. The overall cost to ship the concentrate will be no more than 12% of the gross, including freight, and is economically attractive, not withstanding the Phase Two plans.
WUCC will employ the process of vat leaching the concentrate using a pachucha type vat leach tanks. In effect, Essex and other operators were doing the same thing to some degree with great success. Their failures resulted from making cement copper from the pregnant solution. WUCC will run the vat-leached materiel through the SX/EW plant to make cathode grade copper. This will be an end run around using a smelter, therefore lowering the costs. The sludge from vat leaching will automatically become a gold and silver con, which will be combined and concentrated again for either shipment, or on site processing. Concentrate with large amounts of gold and silver will be shipped directly to the smelter copper and all. The con can presently be shipped to Kennecott (SLC), Baghdad Arizona, or the gold con to Elko Nevada (Barrick).
Exit Strategy for Equity Investors
WUCC management believes the company’s holdings in addition to the copper project are worth going public in an IPO. Once production is achieved the stock value of WUCC will be considerable. It has always been management’s position to go public with money, rather than looking for it to create added value.
The companies holdings in addition to the Milford Mineral belt include oil and gas lands that are very similar geologically to the Wolverine discovery in central Utah, copper gold properties in South West Utah, The Gold finger trend in southwest Beaver County containing nearly 75,000 ounces in resources, and highly prospective for Carlin type gold deposits, and a 50% interest in the drum property in Millard county which may also contain large Carlin type gold deposits.
Cash Flow Projections:
A) LME 3 Month
B) LME 15 Month
C) LME 27 Month
E. WUCC Management:
Mark D. Dotson, President, Western Utah Copper Company
Mark Dotson will be the CEO of the Joint Venture. Mr. Dotson has extensive experience in geology and open pit mining with a master’s degree in geology and a minor in business administration. Mr. Dotson has been a design build contractor instrumental in completing several $25 million dollar projects. He is very familiar with all of the prospecting, drilling, and mining that have been going on for years near Milford, Utah, and is the person most responsible for gathering all of the various mining properties in the District into one 75 square mile property Mr. Dotson has been elected three times to political office, both city and state, and twice nominated to serve as Western Director Of Minerals for BLM. (Both positions were declined because of time constraints.)
Serguei Azarov, Staff Mining Engineer
Serguei Azarov was educated at Vorlcutinskey Mining College and the University of St. Petersburg in Russia. Mr. Azarov holds a 5 year degree in mining engineering and a four year degree in mine management, graduating in 1986. Mr. Azarov was in charge of the largest, and some smaller mines in Russia, being directly responsible for over 3,000 employees. Mr. Azarov managed and developed every aspect of mining, both surface and underground.
Charles W. McGinley III, Mining Engineer (consultant to WUCC)
Mr. McGinley has over 30 years of technical and practical experience in many varied geomechanical environments and mining methods, and has a Bachelor of Science degree in Mining Engineering from the University of Utah. He has kept his education current with courses in Rock Mechanics and Blasting.
His comprehensive abilities encompass the following relevant areas:
Underground and surface fragmentation engineering work.
Management of producing operations, including supervision of miners, budgetary preparation and production levels, safety programs, mining regulations and reports.
Surface and underground mining equipment.
Implementation and modification of mining preparation, feasibility and production methods, short and long range mine planning, cost and profitability projections.
David Hartshorn, Geologist
Mr. Hartshorn has a Masters degree in Geology and additional training in mining engineering. He has successfully designed and mined three large open pit gold mines for Jumbo Mining Company in Utah and Nevada, and has over 28 years experience. Mr. Hartshorn has extensive experience in every aspect of large mining operations from raw exploration, to full metal recovery.
William Leigh, Chief Counsel for Western Utah Copper
Mr. Leigh, a CPA, graduated from the University of the Pacific McGeorge School of Law with a Juris Doctorate in law, as well as a Bachelor of Science degree with honors in accounting from Southern Utah University. Mr. Leigh has been instrumental in the development of several large projects in the Cedar City area and has a wide range experience from general law to heavy industry and mining.
Kohler and Eyre, CPA
LaDell Eyre of the firm Kohler and Eyre is the CPA for Western Utah Copper. Mr. Eyre holds a Master of Accountancy degree with honors, and has extensive experience with such major accountancy firms as Deloitte & Touche in Phoenix Arizona, the Quantum Group, and many others.
Consultants:
Dr. Roshan B. Bhappu, P.E.
Mountain States R & D
13801 East Benson Highway
Suite A
Vail, Arizona 85641, U.S.A.
President of Mountain States Research and development, a world leader in mineral extractions and recovery processing.
Dr Roger Steiniger
Western Michigan University, B.S. in geology, 1964
Brigham Young University, M.S. in geology, 1966
Colorado State University, Ph.D. in geology, 1986
Membership in several professional organizations, delivered numerous presentations at professional meetings, and published several articles in peer-review journals.
American Institute of Professional Geologist-certification number 7417
Note the date. May be old news but it's historically pretty accurate.
Note the numbers.
IMO WE HAVE OUR HANDS ON A MONSTER. I think this is going to be the largest copper mine, and other metals, in the world.
I think the Milford mineral belt is unbelievably rich and MD has got it covered. WHOOOOOOPPEEEEEEE!!!
AMERICAN OWNED!!!
I think MD likes the Western Utah Copper name better than CK
Check out the new site.
http://wuccompany.com/
IMO concentrate is HOURS from production. I THINK the best explanation for the behavior of the company over the last few months is that MD believes there is a large "shorting". Whether
true or not, I think he wants to drop a bomb all at once hoping to trap the NS. IMO
The numbers in the report have changed SIGNIFICANTLY over the past couple of years with more proven assets. 3.5B, although certainly large, is not out of line with the numbers that are probably going to hit us soon. IMO
Oh, and I understand that they are looking for more "Hammers" for the chain gang!!!!!!!! lol
Executive Summary & Business Plan
Western Utah Copper Company, Milford Utah
May 1, 2006
INDEX
A. Introduction, Area History, Studies and Reports
Business Model for Current Mining Operations
Milford Utah District Minerals
Methods of Metal Recovery
New Technology - VSI (Vertical Shaft) Impact Mills
New Electro-Winning Technology
Phase One
Phase Two
Phase Three
Phase Four
C. Mineralogy Of The Ores - PMET, Wolfgang Baum, MDA
Hidden Treasure Mine Mill
Mineral Reserves
Reserves Certified by Mine Development Associates
Reserves Certified by Havenstrite Management
Reserves and Resources Certified by Peter Joralemon
West Hills Mine Costs
D. Process and Sale of Concentrates
Cash Flow Projections
The Concentrator
Exit Strategy
WUCC Management
A. Introduction
Western Utah Copper Company (WUCC), a privately held Utah corporation which owns or controls more than 100,000 acres of mineral properties, real estate, and other assets in Beaver County Utah, has collected a vast number of mining claims, land ownership, land leases, mining rights, buildings and equipment (as detailed below) into a property that is 18 miles by 8 miles and contains a gross value, if all were mineable, of twenty billion dollars worth of metals. The metals, in order of total value are: tungsten, copper, silver, gold and molybdenum, and as discussed below, each different ore body is processed differently, but with the same mill, to recover all of the metal that can be economically recovered, to maximize the total value recovered.
To date, all the required permitting has already been obtained to be in full production and make copper, gold and silver concentrate. WUCC will begin its operations in four phases, using advanced cutting edge technology, and taking full advantage of the company’s studies and reports compiled at great expense by experts in the mining industry.
Area History
The Milford area has produced copper, silver, lead, zinc, tungsten, fluorite, uranium, and perlite. Deposits of kaolinite and alunite with possible economic potential exist. To the close of 1910, the area had produced about 17,000 ounces of gold, 16,000,000 ounces of silver, 31,000,000 pounds of copper, 350,000,000 pounds of lead, and 5,000,000 pounds of zinc. The Rocky and Beaver Lake Ranges have produced 8,000 ounces of gold, 780,000 ounces of silver, 34,000,000 pounds of copper, minor amounts of lead, zinc and tungsten. (James A. Whelan Research Geologist, U.S.M.S. 1973 paper)
Beginning in the late 1,700’s with the coming of Father Escalante, the Milford area has been rich in mining history and the ore to go with it. When Mormon pioneers first ventured into the valley in the mid 1,800’s at least one mine, first thought by the pioneers to be worked by early Indians, was in-fact a silver mine operated by early Spaniards. Mormon pioneers mined it for metal to make bullets. They found them to be extra hard, learning later the hardness was due to silver and thus a lead-silver mine and not a pure lead mine as first thought. This mine was a key element in the organization of the Lincoln mining district some 15 Miles south east of the Companies copper holdings.
In September of 1875 James Ryan and Samuel Hawkes discovered what would later become one of the biggest silver producers in its day and American history, the Horn Silver mine. Along with it came one of the most notorious mining camps in the west, with shootouts common on a daily basis. The town fathers found it necessary to import a gunslinger sheriff to clean up the town. From Boot Hill in Pioche Nevada, A Sheriff Pearson was imported to do just that and as the story goes shot it out with more than 50 desperadoes in the streets of Frisco before his job was done.
Later the infamous Jay Cooke who cleverly invented a way to finance the civil war by selling federal bonds, was engaged to help finance a railroad that later served both the Horn Silver mine and the Western Utah Copper Companies Cactus mine. By 1879 the United States Annual Mining review and stock ledger was calling the Horn Silver “Unquestionably the richest silver mine in the world now being worked”.
Later the rich ore caused such greed that the mine operators took out the pillars ordinarily left in place to secure the stopes. This caused a terrific cave-in that reportedly blew out windows in Milford 17 miles away. In less than a year the mine was back in business again at a limited capacity and worked sporadically up until the 1940’s.
The Horn Silver mine was a key element in the organization of the San Francisco Mining District. The Horn Silver mine produced substantial quantities of copper, gold, lead and zinc in addition to the rich silver ore. The Horn Silver mine borders the company’s holdings on the west. The Companies Cactus mine and Beaver carbonate mine, are both located near the Horn Silver mine in the San Francisco Mining district.
The Star mining district is located just west of the Town of Milford and also borders the companies copper holdings on the south. The Star District produced substantial amounts of copper, gold, silver, lead and zinc generally up to about 1948. The first reported substantial workings were recognized by the formal organization of the Star Mining District around 1872. The deepest reported workings being the Moscow mine, reaching the 1,600-foot level.
Of interest may be the fact that the President and CEO of Western Utah Copper Company, Mark D. Dotson was born near the Gold Crown mine in the star mining district in 1958. There his father worked a gold mine. At age 5 after having been bit by a western diamond back rattle snake at age 3, the family moved to the town of Milford.
Western Utah Copper Company will conduct significant modern operations in the Rocky Mining District organized in 1872. Below a snapshot from the USGS report of the day, January 5, 1874 as furnished by MR. G.K Gilbert:
Rocky District, Utah.
[From notes furnished by Mr. G.K. Gilbert.]
“This district was discovered February 17, and organized March 27, 1872; work began May 1 following. It is situated on the Pioche and Salt Lake road, called sixty miles from Fillmore. The mineral cropping’s covered an area of one-half mile square; the ledges are on the east face of the mountain. The general direction of lodes, &c., of the north group is east and west to southeast and northwest; south group, north and south; they dip with the country-rock the ores are base, milling; assays show the presence of gold in silver-bearing veins, $12 being the highest. The principal mines now worked are the Rockafellow and Severance, shaft down 46 feet; Champion, shaft down 30 feet; and Homestead, shaft down 44 feet; no mill. Mining labor costs $4 per day, and the average cost of sinking a shaft on a main vein is from $10 to $18 per foot. Grain, farm produce, &c., comes from Beaver Valley; timber, eighteen miles; lumber, forty miles; and fuel, eight miles west; and water, (the Beaver River,) two and a half miles east. There are 15 inhabitants in the district. It is not a stage-station, but on the Pioche and Salt Lake stage-route. The country-roads are good. No Indians.”
UNITED STATES ENGINEER OFFICE,
GEOGRAPHICAL AND GEOLOGICAL EXPLORATIONS AND SURVEYS
West of THE ONE HUNDREDTH MERIDIAN,
GEO. M. WHEELER,
Washington, D.C., January 5, 1874. Lieutenant of Engineers, in charge.
Beginning in the 1950’s the Rocky and Beaver lake districts once again became of interest for copper. Nearly all of the major copper mining companies have came to Milford in search of new copper deposits. In 1976 M.D. Regan of Bear Creek Mining (Kennecott) stated “The Milford area exhibits all the favorable geologic indications of a porphyry copper mega-district”.
New exploration techniques were developed for the exploration of copper magnetite skarns. Using hand held ground magnetometers beginning in about 1959, many new discoveries were made, some of which remain quite large. Included are the Bawana, Maria, Hidden Treasure, Candy B, and Valley.
In all, the mining districts had one thing in common, disparate fractionated ownership. All this owing to the very nature of greed and rich ore. Litigation was commonplace beginning in the late 1,800’s for encroachment. Lawsuits caused many mines to shutdown during trials, which even then could last for weeks or months.
As is the case with the company’s Cactus Mine in the early 1900’s, these delays often caused the mine to cave in and much production lost. Over the years many large mining companies came and went unable to assemble a large enough land package to properly operate a large operation, and accordingly kept moving.
Perhaps the single most important thing that the president and CEO of WUCC could have done was to assemble the land into one large land package. This effort began in 1989. Never before since the history of the mining districts in the late 1,800’s has this ever been done, much to the detriment of the business.
Now, WUCC has resolved the primary cause of age-old litigation by acquiring all the lands into one big package. Even in the early 1970’s litigation was ever present over prior ownership and encroachment. Now WUCC is poised for huge success with no restrictions on growth or mining.
The assets assembled by WUCC, a lifetime of work in these districts, as well as a huge data base, combined with the current upward metals trend, make this a once in a life time investment opportunity.
Studies and Reports:
Peter Joralemon Report: The single most comprehensive work in the combined Rocky and Beaver Lake mining districts historically has been the Peter Joralemon Report. Prepared in 1980 for Toledo Mining Company, the work is intended to represent a compilation of American Mining, Toledo, Shield Development, and Essex international. The work in the past has generally been the “Bible” in this region.
WUCC has assembled a large database that contains many daily memos, technical reports by Metcon, work done by Majestic oil, Noranda, American Mining, Shield Development, Essex International, and others. This represents years of working history in the mines as well as milling secrets. Enclosed in this business plan (Tab 1) is Metcon technical report: 73-38, 72-4, and EI-114.8.
Note that report 72-4 and 73-38 suggest substantial gold and silver recovery as part of new metallurgical practices at the mines. Typically this was ignored in favor of making cement copper.
In the day of these older operations the only option they had was to make cement copper. In order to do this they had to leach the copper from the ores. The Skarn ores contain much calcium carbonate and therefore would neutralize the acid. When older reports speak of metallurgical problems with the ore, generally that is it. The pregnant solution would then be leached out onto scrap steel and the steel sent to the smelter. Approximately 70% copper recovery was attained in this manner.
The historical operation processed approximately 450 tons per day through a ball mill, yielding a very good copper concentrate containing gold and silver. This copper concentrate according to Dave Belling the mill manager from 1971 to 1975 averaged 37.5% copper with high amounts of gold and silver. 800 tons was processed daily in a vat leach crushed to 1 ½ minus. The ball mill copper concentrate was then usually shipped to Baghdad or elsewhere. This they made a good profit on and were typically paid for the gold and silver. In making cement copper, the gold and silver is sacrificed. Historically many memos’ spoke of the need for a bigger ball mill to increase profits over the cement copper method. WUCC will make a flotation copper concentrate in similar fashion, but using cutting edge technology.
Integration and study of existing reports, work history, and past mistakes of the historical operations show that the biggest threat to profitably came from cold winter weather. The new mill WUCC is building has been designed to over come these mistakes by floor heating devices in combination with current technology.
Additional mistakes came from un-willingness to recognize the value of underground mining reserves and act upon them. Modern technology allows for very economical underground mining and WUCC management believes this to be the wave of the future. As soon as surface reserves are exhausted, WUCC will immediately go underground, and may in fact pursue underground high-grade reserves contemporary with surface mining operations. This in combination with the very high-grade ores available will make the WUCC operation among the most profitable of any modern operations.
Nevada Star Resources Corporation Feasibility Study: Following the Peter Joralemon Report, two significant works have been completed. The first is by Nevada Star Resources Corporation, who, in 1998, commissioned Mine Development Associates (MDA) of Reno Nevada to prepare a bankable feasibility study to determine the economics of mining and processing copper ore in a heap leach environment. In this environment the pregnant liquor from a leach pad is run through a solvent extraction, electro win plant which produces pure cathode copper which is saleable daily. The study also certified ore reserves and concluded that copper can be produced from this project area in a very economic manner.
Dr. William B. Wray Report: Later, at the request of, and for publication by the Utah Geological Association, a significant history was written and prepared by Dr. William B. Wray. This work is the most comprehensive and historically detailed to date on the Rocky Range, and Beaver Lake Mining Districts. Dr. Wray also wrote a companion history on the San Francisco Mining District.
Milford Utah District Minerals:
The following chart identifies the gross value of metals in the Milford Mineral Belt, located in Beaver County Utah District, and includes all metals whether mine-able or not, and is only intended to give the reader an idea of the real size and scope of the district. These estimates were prepared by Dr. William B Wray using all the third party generated data the company has available. These estimates could prove to be extremely conservative:
METAL QUANITY PRICE/UNIT VALUE_______
Tungsten 95,126,000 lbs $145.00 $13,793,270,000
Copper 2,436,200,000 lbs $ 1.60 $ 4,019,730,000
Silver 106,140,000 oz $ 7.20 $ 764,208,000
Molybdenum 8,208,000 lbs $ 35.00 $ 287,280,000
Total $ 19,212,938,000
The recent rise in the prices of all metals has been driven by demand from growth in China, India, and Pakistan. As the residents of each country become more and more modernized, it is not likely the demand will stop for many years to come thereby propping up the copper price for at least 10 years or more. The demand for copper in the USA has been dropping as growth in other countries outpaces that of the more modern USA. China is the world’s principal supplier of Tungsten.
B. Business Model for Current Mining Operations
WUCC’s business model for mining the Milford District is designed around the concept that mining must be able to continue even if metal prices drop to historic lows, WUCC is designed to maintain an operating cost below market expectations even if metal prices drop to historic lows. This includes the recovery of Magnetite, Moly, and tungsten. All very valuable, but not listed in the cash flow projections along with Copper, Gold, Silver.
WUCC, beginning with its first production estimated to be October 15, 2006, mine and produce in excess of 200 million pounds of copper having a gross value at a price of $2.00 per pound, or $400,000,000.00, at a cash cost of less than $0.66 per pound of copper. Of this, approximately seventy five percent will have valuable recoverable gold and silver which is expected to add, based on previous operations and smelter receipts, an average of 23.5% to the gross, or $29,610,000.00 for a grand total of $429,610,000.00.
While this represents a substantial portion of the proven ore, millions of pounds of copper are available that need only to be further developed by more, and ongoing drilling. Exploration potential for upside right now is limited only by the amount of money available to keep drilling out the ore zones. The project will likely be many times the size as stated herein. In addition to these surface estimates, the current underground reserves potential is well into the millions of pounds of high grade copper, gold, silver ores.
And while WUCC has listed its cost at $0.66 per pound, this is much more than the world wide average cost to mine, mill and recover copper ore. This makes our numbers extremely defensible in the face of world average costs. The actual cost based upon other current operations will be much less than stated.
Methods of Metal Recovery:
Each major ore body will require a different process to recover all of the metal that can be economically recovered. The first project will be to process the ore in the Hidden Treasure Mine. This mine, like the Maria, Candy B, Copper Ranch, Sunrise, and Valley is rich in copper oxide ore with considerable values in gold and silver. For this reason WUCC will combine several known technologies to allow full recovery of all three metals. In summary, the ore will be milled to a fine powder, concentrated by flotation, Vat leached with ammonia, or acid, in a closed circuit controlled environment, and fed into a SX/EW plant to produce cathode copper. The gold and silver will be precipitated out of the sludge remaining and processed off site.
Hidden Treasure Mine Mill: Construction has already begun on the Hidden Treasure Mine mill. It has been designed to process ore from the Hidden Treasure Mine and all other ore bodies in the District. The ore from the Hidden Treasure Mine will average 1.75% copper plus gold and silver. Mark Dotson, Don Foot and Dr. Rashoun Bappou have designed a mill that can process 2,400 tons of ore per day. This equipment will reduce the particle size of the rocks to 1/200 of an inch. Water and reagents will be added to form slurry. The reagents will cause air bubbles to stick to both the oxide and sulfide particles. When the metal rich portion of the slurry floats to the top it is skimmed off. The 2,400 tons of slurry will be concentrated to 100 tons of concentrate that will be over 40% copper. The copper is leached from the concentrate with ammonia, or acid. The pregnant leach solution (PLS) is processed through mixer settlers to produce enriched electrolyte. The copper will be plated out of the electrolyte by the electro-winning process. The residual concentrate can be sold to nearby processors where existing equipment can recover the gold and silver.
Construction should be complete and the plant operating at the end of October 2006. At this point the plant will be producing copper at the rate of 2,500,000 pounds per month at a cost of $0.66 per pound. The gold and silver credits will reduce this cost amount. The December 2005 spot price of copper was $2.00 for a net income of $1.30 per pound or $3,350,000.00 per month. This profit is at 1,200 tons per day and will double when 2,400 tons per day production is reached. See cash flow section for current, 3month, 15 month and 27 month LME based production estimates and LME based pricing (page 16).
Heap Leach Facility: While the mill for the Hidden Treasure Mine is under construction, WUCC will begin the process of developing a heap leach facility. This includes finding a location without valuable metal underneath, obtaining an economical source of sulfuric acid, or alternately, bacteria, and obtaining a heap leach permit. This facility will use sulfuric acid, or bateria, to recover copper from low-grade ores that have only copper. Some of these ores, to be leached, have already been stockpiled. Pregnant Leach Solution (PLS) that flows out from the heap leach will be processed to cathode copper in a SX/EW plant.
New Technology - VSI (Vertical Shaft) Impact Mills:
Using cutting edge technology never before used in the United States, WUCC will implement a process that has been used very successfully by Newmont Gold Corp. in Uzbekistan since 1996 to grind the ore. Based on in-house test results, later certified by Western States, and known technology, WUCC will implement VSI (vertical shaft) impact mills in conjunction with a horizontal shaft impact, and will implement a regrind ball mill to reduce the +30 mesh fractions to a finer grind to liberate more gold and more copper, to produce a product in the 50%, –200 mesh range for floatation. The largest portion of the product size will be in the 90-150-mesh size range. Since the largest grinding cost is born by the VSI, the small ball mill cost per ton is less than $0.50 per ton. The total cost to reduce mine run ore to the final floatable product is $4.62 per short ton of ore. The mill will process 1,200 short tons of ore per day at start up then 2,400 tons per day ASAP. (24 hours).
Note: Ball mills and similar historical grinding systems are less than 20% percent efficient. Modern VSI technology is almost 100% efficient and will do the same job for less than one half the cost.
Column flotation will be used in place of historic, problematic, and less efficient flat lying tanks. This will allow more contact time for the reagents to work and guarantee nearly 90% or more recovery. From this point on, industry standard processing will be employed to extract the concentrate using vacuum type con filters. Processing costs through the mill are estimated to be $4.62 per short ton of ore. Metcon testing (Table 4) indicates that the majority of oxide copper minerals are liberated at ten mesh. For example Maria 55 %, Hidden Treasure 68%, this in combination with column floatation will substantially decrease the total recovery costs as well as increasing recovery.
Tailings will be dewatered using derrick hi-dry or similar type systems in combination with standard thickeners. After the tails are dewatered, they will be used as backfill in the open pit mines and placed on the waste dumps, or designated storage areas. This is far more cost effective than spending $3.5 million to bond and build a tailings pond. Some of the tails can be sold for mortar sand at a profit.
New Electro-Winning Technology:
This is a new method of manufacturing electro-winning equipment that will be available for use in the Milford District. This technology does not use lead anodes that contaminate the copper and lower its value. It also requires much less labor to harvest and strip the copper off of the stainless steel cathode blanks. The power required to plate the copper onto the cathode blanks will be reduced by 25% to 30%. The new equipment will be owned and operated by the vendor (Bill Jacobs and company) that developed the technology on a tolling price per pound of metal basis.
Phase One:
Beginning May 2006, a 1,200/2,400-ton per day concentrator will be built substantially on, or near, the Nevada Star SX/EW site. Construction is expected to take 130 days. During this time a power line will be constructed to service the project with commercial power.
Beginning August 2006 stripping will begin on the Hidden Treasure open pit mine, along with haul road construction. It is anticipated the ore body can be stripped in 105 days. Tailings disposal will include dewatering and dry stacking nearby.
Phase Two:
Beginning at the completion of the construction of the new concentrator, a modified SX/EW plant will be built. The plant will be designed to vat leach concentrates, high-grade ore, and service a leach pad. Construction time is estimated to be 120 days.
Phase Three:
At the successful completion of the SX/EW plant, leach pads will be constructed on a scaled version of the feasibility study design. Construction time is estimated to be 120 days
Phase Four:
As soon as practical, and contracts for manufactured goods are secured, a manufacturing facility will be built. The facility contemplates using cathode copper to manufacture copper products for shipment directly into the market place eclipsing the middleman. This, as is the case with companies like Cerro Copper, will more than double the value of each pound of refined copper. This operation will be the only mouth of mine manufacturing facility in the USA.
Mineralogy Of The Ores (PMET, Wolfgang Baum, MDA:
Ore mineralogy can be complicated. However the ores of the Milford Districts are very straightforward. Among the most easily recovered are Chalcocite, Covellite, tenorite, malachite and many others named below in the mineralogy description section. Most of these go into solution with exceptional ease making recovery simplistic.
Hidden Treasure Ore: The Hidden Treasure ore (drill cuttings) contains elevated amounts of chalcocite and covellite and noticeable amounts of brochantite. The Hidden Treasure ore also contains higher amount of quartz and magnetite with moderate to minor amounts of diopside, biotite and relatively high grade, coarse-grained copper mineralization consisting of chrysocolla and malachite.
Maria Ore: The Maria ore contains higher grades of copper mineralization with fine to coarse grained chrysocolla and lesser amounts of malachite. In addition, there are trace amounts of secondary copper sulfides and chalcopyrite.
Bawana Ore: The Bawana ore contains disseminated chrysocolla mineralization with traces of malachite, further, trace amounts of covellite and chalcocite. Tenorite occurs with iron oxides.
OK Pit Ore: The OK Pit ore contains bimodal copper mineralogy, which consists of, disseminated malachite and major amounts of chalcocite with lesser covellite. Trace amounts of chrysocolla and tenorite.
Copper Ranch Ore: The Copper Ranch ore contains relatively high-grade copper mineralization with chrysocolla and malachite representing the major copper minerals. Traces of, chalcopyrite, covellite, chalcocite.
Sunrise Ore: The Sunrise ore contains abundant chrysocolla with bornite and chalcopyrite increasing with depth.
Mineral Reserves:
It should be noted that often a very fine line is all that exists between ore reserves, probable reserves, and inferred reserves. A good example of this would be the Candy B ore body shown below at 1.26 million tons. Ongoing drilling has already upgraded this deposit to over 7 million tons inferred. The current model suggests up to 40,000,000 tons for the Candy B. If this ore body never exceeds the 7,000,000 tons it will add over 150,000,000 pounds of copper to the reserves base. Almost doubling what is modeled herein. 350,000,000 pounds of copper at today’s price with the gold and silver is over one billion dollars. Management believes the project will grow to far exceed these numbers many times.
Reserves Certified by Mine Development Associates: MDA, per table 4.3 (Tab One), has certified as proven and probable the following reserves using the ultimate pit curves as designed by Medsystem Lerchs-Grossman:
Hidden Treasure Mine - 802,000 tons at 1.75% copper-cutoff at .57% - 28,081,000 pounds of copper
Since the project will also implement the SX/EW operation as contemplated by the Nevada Star Resources Corporation Feasibility Study, a substantial amount of rock that runs .3-.5% copper which would be either not be mined, or would be put in the waste piles, is now ore for the leach pads. It is estimated to contain at least one million pounds or more of copper. Hidden Treasure concentrate (report 72-4, and memo December 14, 1973 Clement K Chase) and Inspiration smelter schedule ran the following: 32.8% CU, 0.87 oz/ton gold, 74.6 oz/ton silver or, $826.56 per ton copper, $351.48 per ton gold, $432.68 per ton silver.
Maria Mine - 559,000 tons at 1.13% Copper-cutoff at .42% - 2,594,000 pounds of copper
Note: same as above except the marginal materiel will be more, perhaps1.5 million pounds of copper.
Copper Ranch Mine - 280,000 tons at 1.13% Copper-cutoff at .43% - 6,327,000 pounds of copper
Note: same as above with approximately 350,000 pounds of copper.
OK Mine - 1,223,000 tons at 0.73% Copper-cutoff at .26% - 7,804,000 pounds of copper
Havenstrite Management certified 1.9 million tons at .62% copper and 23,700,000 pounds of copper. This number, based on the past work of Dotson Exploration Inc. at the OK Mine, is valid.
MDA Tons Certified: 2,864,000 - pounds certified 64,806,000
pounds probable 74,526,000
Reserves Certified by Havenstrite Management (Tab Two):
Mary I Mine - 1,100,000 tons at 0.35% Copper (.5-1 strip) - 7,700,000 pounds of copper
Cortex Dumps - 200,000 tons at 0.55% Copper - 2,200,000 pounds of copper
Essex OK Dumps - 1,770,000 tons at 0.45% Copper - 15,930,000 pounds of copper
Havenstrite tons certified: 3,070,000 - pounds certified 25,830,000
Reserves and Resources Certified by Peter Joralemon (Tab Three):
Note: MDA found a high level of confidence in the Peter Joralemon Report with respect to tons and grade.
Candy B - 1,230,000 tons at 1.26% Copper - 30,996,000 pounds of copper
More drilling will be required to elevate this to reserves status. At this point it is only a resource. Drilling will likely substantially increase these figures. Using 651 scraper, this ore will be economic to strip and mine as it is overlain by gravel. This ore body is expected, based upon historical assay data, to have a very substantial gold and silver credit. (See also discussion under Mineral reserves above)
Bawana Extension - 1,207,000 tons at 1.84% Copper - 44,464,800 pounds of copper
Even though Peter Joralemon has listed a portion of this as reserves, WUCC classifies all of this as resources until more drilling is done. It is very clear a substantial amount of ore is available at the Bawana extension. Dr. William B. Wray, in a memo to WUCC CEO Mark Dotson dated August 17, 2004, finds a very real possibility of an underground mine-able resource of 1,900,630 tons of ore at an average grade of 1.99% copper, and 75,645,074 pounds of copper. This is a very conservative figure. Consulting geologist David Hartshorn has found a strong probability that the Bawana ore zone has a sub-parallel (B-32 DH) strand that is much bigger that the original zone. Evidence suggests that it may outcrop beneath the quartzite WNW of the Bawana pit. This allows a very large open pit mine potential of more than 2 million tons. While more drilling needs to be done to conclusively define open pit and underground mine-able reserves, the strongest probability is that in a combination of open pit and underground, more than 3.5 million tons of good grade ore will be developed. 3,500,000 tons at an average grade of 1.5% copper or 105,000,000 pounds possible.
Sunrise - 294,000 tons at 2.72% Copper - 15,993,600 pounds of copper
Old Hickory - 850,000 tons at 1.25% Copper - 21,250,000 pounds of copper
Peter Joralemon, because of the visual size, speculated that 4,000,000 tons at .50% copper might exist. The Old Hickory skarn is large and relatively unexplored. To be safe, WUCC has estimated a much smaller tonnage with a slightly higher grade. While ore is in sight, much drilling will need to be done to substantiate the tonnage and grade, therefore this is only possible ore. A memo dated October, 1971 by J.K. Jones (Essex) indicates that Shield Development had many drill holes with substantial grade and mineralization from the Old Hickory in widths of 50-100 feet, but they were unable to locate the drill hole location map to correspond with them.
Joralemon tons: 3,581,000 - 112,843,000 pounds of copper
Essex Mill site - Crushed vat leach rock 650,000 tons at .58% copper - 7,540,000 pounds of copper
Note: part of this property belongs to someone else. The owner is willing to work out a favorable arrangement to process.
Cactus-New Years Oxide - 350,000 tons at 1.10% Copper - 7,700,000 pounds of copper
Total pounds of Certified Copper - 115,539,000
Total pounds of probable Copper - 112,760,600
Grand total pounds of copper - 228,300,400
Note: This does not include the substantial resource of cactus mine sulphide ores estimated to be more than 2,000,000 tons at 1.5% copper or 60,000,000 pounds of copper, or those listed as resources such as the Candy B, Hidden treasure extension, valley deposit, copper ranch extensions, or any of the underground potential which may exceed the open pit operations in tonnage at some point.
West Hills Mine Costs (Tab Five, sheet 4-14):
West Hills Mine Cost MDA estimate
Hidden Treasure $1.25 per ton $1.00 per ton
Waste $0.90 $0.90
Alluvium $0.50 $0.65
Average $0.88 $0.85
These costs include haulage to the processing sites, and road and waste pile maintenance. West Hills Excavation’s pricing included a profit. The cost will be substantially the same now, except for an increase in fuel, which will add approximately $0.01 per pound of copper, at a fuel cost of $2.50 per gallon. MDA found the costs submitted by West Hills Excavating to be accurate and credible Therefore WUCC’s costs to mine would be substantially as stated by MDA (Sheet 4-14).
Mining will be done using four 60-ton caterpillar rock trucks, two 990-size loaders, one D-10 dozer and all the usual fleet of equipment, which accompanies this type of mine operation.
The costs listed below are generally 20% higher than the actual costs, except for mining, which is exact. The mining cost is calculated for the Hidden Treasure ore body and takes into account a portion of the ore body already stripped. As mining progresses to other ore bodies, the cost will vary and increase slightly. It is likely the worst-case scenario will add no more than $2.00 per ton, or a total of $3.25 per ton, (Candy B for example).
Note: The actual ore and waste costs will average $0.60 per short ton
Cost review: Crushing and grinding $4.62 per short ton
Mill and process $4.60 per short ton
Mine costs $1.25 per short ton *
*Includes tails backhaul. Adjust mine cost per strip ratio Example: Strip of 2.7:1 is 2.7 X $1.25, or $3.37 total mine cost
Equipment cost $0.40 per short ton
Reagents $1.50 per short ton
Grand Total $12.37 per short ton *
*Includes power
Process and Sale of Concentrates:
Before Phase Two is implemented, WUCC has pre-sold all of its copper, whether concentrate, or cathode to Katamin metals of St Louis Missouri, and they will ship concentrate to Kennecott or Phelps Dodge. The overall cost to ship the concentrate will be no more than 12% of the gross, including freight, and is economically attractive, not withstanding the Phase Two plans.
WUCC will employ the process of vat leaching the concentrate using a pachucha type vat leach tanks. In effect, Essex and other operators were doing the same thing to some degree with great success. Their failures resulted from making cement copper from the pregnant solution. WUCC will run the vat-leached materiel through the SX/EW plant to make cathode grade copper. This will be an end run around using a smelter, therefore lowering the costs. The sludge from vat leaching will automatically become a gold and silver con, which will be combined and concentrated again for either shipment, or on site processing. Concentrate with large amounts of gold and silver will be shipped directly to the smelter copper and all. The con can presently be shipped to Kennecott (SLC), Baghdad Arizona, or the gold con to Elko Nevada (Barrick).
Exit Strategy for Equity Investors
WUCC management believes the company’s holdings in addition to the copper project are worth going public in an IPO. Once production is achieved the stock value of WUCC will be considerable. It has always been management’s position to go public with money, rather than looking for it to create added value.
The companies holdings in addition to the Milford Mineral belt include oil and gas lands that are very similar geologically to the Wolverine discovery in central Utah, copper gold properties in South West Utah, The Gold finger trend in southwest Beaver County containing nearly 75,000 ounces in resources, and highly prospective for Carlin type gold deposits, and a 50% interest in the drum property in Millard county which may also contain large Carlin type gold deposits.
Cash Flow Projections:
A) LME 3 Month
B) LME 15 Month
C) LME 27 Month
E. WUCC Management:
Mark D. Dotson, President, Western Utah Copper Company
Mark Dotson will be the CEO of the Joint Venture. Mr. Dotson has extensive experience in geology and open pit mining with a master’s degree in geology and a minor in business administration. Mr. Dotson has been a design build contractor instrumental in completing several $25 million dollar projects. He is very familiar with all of the prospecting, drilling, and mining that have been going on for years near Milford, Utah, and is the person most responsible for gathering all of the various mining properties in the District into one 75 square mile property Mr. Dotson has been elected three times to political office, both city and state, and twice nominated to serve as Western Director Of Minerals for BLM. (Both positions were declined because of time constraints.)
Serguei Azarov, Staff Mining Engineer
Serguei Azarov was educated at Vorlcutinskey Mining College and the University of St. Petersburg in Russia. Mr. Azarov holds a 5 year degree in mining engineering and a four year degree in mine management, graduating in 1986. Mr. Azarov was in charge of the largest, and some smaller mines in Russia, being directly responsible for over 3,000 employees. Mr. Azarov managed and developed every aspect of mining, both surface and underground.
Charles W. McGinley III, Mining Engineer (consultant to WUCC)
Mr. McGinley has over 30 years of technical and practical experience in many varied geomechanical environments and mining methods, and has a Bachelor of Science degree in Mining Engineering from the University of Utah. He has kept his education current with courses in Rock Mechanics and Blasting.
His comprehensive abilities encompass the following relevant areas:
Underground and surface fragmentation engineering work.
Management of producing operations, including supervision of miners, budgetary preparation and production levels, safety programs, mining regulations and reports.
Surface and underground mining equipment.
Implementation and modification of mining preparation, feasibility and production methods, short and long range mine planning, cost and profitability projections.
David Hartshorn, Geologist
Mr. Hartshorn has a Masters degree in Geology and additional training in mining engineering. He has successfully designed and mined three large open pit gold mines for Jumbo Mining Company in Utah and Nevada, and has over 28 years experience. Mr. Hartshorn has extensive experience in every aspect of large mining operations from raw exploration, to full metal recovery.
William Leigh, Chief Counsel for Western Utah Copper
Mr. Leigh, a CPA, graduated from the University of the Pacific McGeorge School of Law with a Juris Doctorate in law, as well as a Bachelor of Science degree with honors in accounting from Southern Utah University. Mr. Leigh has been instrumental in the development of several large projects in the Cedar City area and has a wide range experience from general law to heavy industry and mining.
Kohler and Eyre, CPA
LaDell Eyre of the firm Kohler and Eyre is the CPA for Western Utah Copper. Mr. Eyre holds a Master of Accountancy degree with honors, and has extensive experience with such major accountancy firms as Deloitte & Touche in Phoenix Arizona, the Quantum Group, and many others.
Consultants:
Dr. Roshan B. Bhappu, P.E.
Mountain States R & D
13801 East Benson Highway
Suite A
Vail, Arizona 85641, U.S.A.
President of Mountain States Research and development, a world leader in mineral extractions and recovery processing.
Dr Roger Steiniger
Western Michigan University, B.S. in geology, 1964
Brigham Young University, M.S. in geology, 1966
Colorado State University, Ph.D. in geology, 1986
Membership in several professional organizations, delivered numerous presentations at professional meetings, and published several articles in peer-review journals.
American Institute of Professional Geologist-certification number 7417
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