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Business Reorganization Can Save Your Company
How to turnaround your business. Business reorganization step-by-step.
If your business is having financial troubles, you can salvage your company using business reorganization. Although it appears more difficult than simply filing bankruptcy, many owners don't realize that in Chapter 11 bankruptcy the court forces these techniques down on the company anyway. The advantage of using these methods outside the court is that you, the business owner, have more control. During Chapter 11, the court will put a trustee in charge of all decisions.
Big corporations refer to business reorganization as "trimming the fat." As this term implies, the owner must cut costs without sacrificing the quality of products or the integrity of the company.
Smaller businesses can also use reorganization methods, but they often have more difficulty. The areas that you, as an owner, need to cut may be less obvious. And your company is less diversified. If you make a mistake and trim the wrong areas, you can destroy the entire business.
How do you, the small business owner, avoid these problems? You must have a plan of action for your business reorganization.
What To Consider During Your Business Reorganization
The planning phase of your business reorganization should be intensive. You must reevaluate your existing business plan and make significant changes. Set new goals that are realistic while being aggressive. Take the time to find out where your business is making money and then refocus your company on these profit making areas.
Next, set up a new financial plan to get you through the next 3 months. Once your business has stabilized during this period, create a more extensive plan to carry the business through 9 more months. Initially you must keep tight controls on your cash flow. You and your accountant should monitor your company financials weekly.
On the employee front, you want to go to a flat organization if you do not have one already. Then set up employee evaluations and remove nonproductive workers. Keep an eye out for misuse of employee time. Make sure everyone is working efficiently and get rid of redundant work. Hold everyone accountable to achieving certain results, including yourself.
Then go back to your business reorganization plan, set new goals and carry them out. But diligently watch your financials. Once your business makes the turn, stay on track with your new direction. Make sure you are meeting your customer needs in areas of high profitability and don't immediately start hiring new people until you are sure your company is on strong financial ground.
Most importantly, note where you business went astray. By learning from your previous mistakes, you can avoid similar problems in the not-so-distant future.
reorganization plan business definition
A plan filed with a bankruptcy court judge by a company in Chapter 11 proceedings in which the disbursement of assets is stipulated. The plan must be approved by the firm's creditors and by the court. A reorganization plan results in new securities being given to creditors in trade for old securities.
Elements of a Chapter 11 Bankruptcy Plan of Reorganization
by Dana Griffin, Demand Media
Debtor in Possession
The goal in a Chapter 11 situation is to restructure the debt so the company, small or large, may stay in business. A business debtor may be a corporation, partnership or sole proprietorship. The debtor files an order of relief but remains in possession of the property while developing a plan to increase revenue to pay off debts. If creditors suspect fraud, they may request a trustee to handle financial arrangements until an agreed upon plan is in place. A debtor in possession also is allowed to borrow funds and may apply to receive unsecured credit without court permission.
Timetable
After submitting an order of relief, the debtor has 120 days to create and file a reorganization plan. For small businesses and businesses with debts of less than $2 million, the timetable may be fast-tracked to 100 days. All creditors must approve the plan with 180 days of the order of relief, or 160 days if fast-tracked. If the debtor does not submit a plan in time, or if any of the creditors fail to consent to it, the creditors themselves may submit a plan. Sometimes, the court extends the debtor's exclusivity period for up to 18 months. Unless an interested party or the courts cause everyone to act in a timely manner, the case can go on for years.
Mandatory Provisions
Your Chapter 11 plan must contain specific mandatory provisions. First, all claims must have a classification. Each secured claim can be classified separately, and you may use general classification for unsecured claims, while employees may be a third class. According to Lawdog Bankruptcy, you can only classify claims together if the “claim or interest is substantially similar to the other claims or interests of the same class.” The plan also must contain a method of treatment for each claim in a class. Furthermore, your plan requires a method of implementation, including a provision for electing directors with the same interests as the creditors.
Impairment Classes
You must include treatments and explanations for all impaired classes in your plan. An impaired class is a group of similar claims that will not be paid in full as of the effective date of a confirmed Chapter 11 plan. Impairment is important because unimpaired classes assume the acceptance of the creditors, and solicitation of their acceptance is not required by law.
Permissible Provisions
Permissible provisions are those not required by law but which help provide for the settlement of all claims. These provisions can impair any class, including unfulfilled lease agreements, reject or assign uncompleted contracts, provide for the liquidation of any or all assets or provide for any other relevant measures in the bankruptcy code. Permissible provisions also provide for modifying secured or unsecured creditors' rights to full payment, partial payment or the surrender of the secured property.
Copper Production Falling
Labor troubles, problems at mines, and a decline in the supply of high-grade copper ore have caused the world's supply of the metal to fall to a four-year low, two Barclays Capital analysts told Bloomberg Business Week. The world's copper stockpiles will only be able to meet 2.7 weeks of demand by the end of the year if the present problems continue, Gayle Berry and Nicholas Snowdon told Bloomberg. The two think that this situation will be sufficient to raise copper prices from the $8,300 a ton average in the first quarter to $9,300 a ton in the fourth quarter.
Freeport's problems at Grasberg were among the many factors the analysts cited as evidence to verify their predictions. They also noted that production at the Kennecott Union copper mine in Utah had dropped by 18% in the first quarter. Kennecott is owned by Rio Tinto (RIO).
Berry and Snowdon's prediction is based on increased demand for copper from China and other countries. So far, China's demand for copper seems to have fallen off this year, and there is no indication that it will rebound any time soon.
The CEO of the world's largest copper producer, Codelco, doesn't agree with them. In mid-April 17, Diego Herandez said that he expects copper supply to exceed demand by 2017 because of the increased production in Peru and Chile, Business Week noted. Codelco, the Chilean government's copper company, is among many producers that are expanding production.
http://seekingalpha.com/article/565161-3-mining-stocks-to-consider-for-upside-potential-in-2013?source=yahoo
copper is a key ingredient in the clean-energy economy, used in hybrid cars, solar panels, wind turbines, and transmission and distribution lines.
Copper May Outshine Gold In 2012
April 2, 2012
http://seekingalpha.com/article/473201-copper-may-outshine-gold-in-2012-4-stocks-to-benefit?source=email_the_daily_dispatch&ifp=1
Chuck,
NOL = Net Operating Loss?
The fact that the patient is still alive, although on life support, is quite amazing.
Under normal circumstances, CPRKQ should have, based on all that took place in the company's history with people motivated by all kinds of intentions and all of whom lacked sufficient technical expertise, passed away long ago.
Case study of a mine start-up
American Bonanza's Copperstone Gold Mine Ships First Gold
VANCOUVER, BRITISH COLUMBIA--(Marketwire -03/01/12)- American Bonanza Gold Corp. is pleased to announce that the 100% owned Copperstone gold mine in Arizona has placed onto transport its first shipment of gold bearing concentrates. The first concentrate shipment consists of 31.2 tons of concentrate grading an average of 22.8 ounces per ton of gold, containing an estimated 712 ounces of gold in concentrate. Gold content grades in the concentrates are over double the most optimistic expectations, and Bonanza continues to pursue further improvements to the gold grade in concentrate.
The gold-bearing concentrates have been produced during the mine and processing plant ramp up process, during early 2012. Bonanza's near term objective is to achieve the design gold production rate of approximately 3,000 ounces of gold per month, and the Company is encouraged to experience continued improvements to throughput as the miners and processing plant operators gain familiarity with the operation, and optimization of the mine and processing plant continues. As part of the optimization program to improve the gold grades in concentrate, a Gemini table has been installed and has been in use for about one month. Recently, a second Knelson concentrator has been installed, and is currently being brought on-line and optimized for best performance.
Performance of the Copperstone crushing and grinding facilities and the gold processing plant continued to improve. During mid-February the plant operated mainly continuously, with low production for optimization and maintenance taking place in three days out of a thirteen day run. During the ten days that the plant operated continuously, throughput improved to an average of 390 tons per day processed, which represents 87% of design capacity. With continued steady throughput improvement, Bonanza's goal is to achieve throughput at the design capacity of 450 tons per day during March 2012.
Head grades during two weeks of mid-February averaged 0.41 ounces per ton of gold which is above the expected life-of-mine average grade. Currently Bonanza has insufficient data to report any increase in the currently predicted grades over the first year of the mine life. The rising head grades are partially a result of the processing plant working through the low grade rock which has been stockpiled at surface for startup. This initial low grade material is currently being replaced by mine ore production. The surface ore stockpile currently contains approximately 2,700 tons of ore.
The processing plant continues to perform well, as indicated by the consistent and low grade tailings assays, in the order of 0.06 ounces per ton gold during the two weeks of mid-February. Low gold grades in the tailings indicate that most of the gold being fed into the plant is being collected in the gravity and flotation circuits where high grade concentrates are being produced. The gold processing plant has been treating ore grade rock for a short time, and accordingly performance estimates are preliminary in nature.
During the two weeks of mid-February, overall gold recovery in the processing plant was estimated to be 85%, according to preliminary data. During February, the gold grade of ore delivered to the processing plant roughly doubled as compared to January (a partial month), and the tailings grade rose as a consequence. As the operators become more familiar with the plant and the Copperstone ores, Bonanza expects the processing plant to adapt more quickly to the changing grades, and achieve consistently low tailings grades. This would effectively increase the overall gold recovery.
Additionally, optimization of the gravity circuit is aimed at further improving the gold recovery over the next several months.
Underground mine performance continues to improve. During 2012, the mine has been focused both on development mining to gain access to future ore bearing stopes, and mining ore from currently available stopes. Over a ten day operating cycle, excluding one day when the mine did not produce ore, the mine averaged 214 tons of ore per day, nearly half of the design mining rate of 450 tons per day of ore. Surface ore stockpiles currently contain approximately 2,700 tons of ore, which will allow the gold processing plant to continue increasing throughput as the mine tonnages increase to provide ore to the processing plant. Bonanza's objective is to bring mine production up to design levels as the processing plant works through the surface stockpile, so that when the stockpile is drawn down, both the mine and the processing plant will be up to their 450 tons of ore per day target levels.
Plans have been formulated for resource expansion drilling. The Bonanza-owned underground drilling rig has been refurbished and will be delivered to Copperstone in the next week. While preliminary in nature, the current exploration plan has the goal of now commencing underground resource expansion drilling during April of 2012. Drilling has been re-scheduled by one month to allow for the installation of all underground infrastructure needed for the drill.
Mr. Brian Kirwin, President & CEO, commented: "Shipment of the first gold in concentrate represents another important milestone in the operation of the Copperstone gold mine. Performance of the mine and processing facility continues to steadily improve in every aspect. We at Bonanza are encouraged by continued improvement in performance, and look forward to bringing the Copperstone gold mine up to design throughput in the near future."
This release was reviewed by Douglas Wood, P.G., Vice President, Exploration of Bonanza, a non-independent Qualified Person within the meaning of NI 43-101.
Does any of this sound familiar, especially as it relates to processing changing ore quality at the processing plant?
Right on.
Most publicly-owned copper mining stocks are close to their 52-week lows.
The fact that CPRKQ has a 1% stake in the original mining project and is unencumbered from debt obligations and creditors and has an option of adding another 2% is quite encouraging.
Add to that the BOD's work to put together a business plan that may move the company out of bankruptcy and eventually produce revenue is very encouraging.
These are are harsh and nasty economic and financial times we live in. Success has never been as difficult to obtain as it is today.
We are still here to fight another day and that's encouraging.
About the Company
CS Mining
CS Mining Location Map
http://www.csmining.com/company.html
CS owns or otherwise controls a wide array of mineral assets and resources in the Milford Mineral Belt, consisting primarily of deposits of copper, along with substantial amounts of gold, silver, magnetite and other assets. It has 11 already-identified mining sites and the potential for many more with further exploration. A location map for the mining operation within Utah is to the right.
Senior Leadership
Harold Roy Shipes
Director, Active in Management
Mr. Shipes is the initial outside director of the company and is also active in many of its operations. He is currently President, CEO and Chairman of International Silver and has over 30 years of experience in the mining industry in senior management positions with companies around the world. He has worked extensively in copper, zinc and precious metals, as well as engineering, construction and project development. Positions held include Vice President and General Manager of Southern Peru Copper Company, General Manager and Chief Executive Officer of Ok Tedi Mining Limited, founder and President of American Pacific Mining, Breakwater Resources, Transoceanic Trading Company, Arimetco International, Western States Engineering, Western Gold Resources, Western Chemicals and American International Trading Company.
Russell D. Alley
Chief Executive Officer
Mr. Alley is a highly experienced manager of mining operations and has extensive industry experience in operating projects similar to those of CS Mining. He has industry-recognized expertise in unit cost control and productivity. While at Southern Peru Copper, he formulated operations and maintenance plans during Peru’s worst economic crisis with 10,000% inflation and severe political instability generating corporate profits above forecast while maintaining full production rate. In that project, he directed the feasibility/engineering study and gained BoD approval of a $100mm copper dump leach SX-EW project which was the first of its kind in the company/country. Mr. Alley also previously managed the start-up and successful operation of the Franke mine, completed exploration, pre-feasibility and an economic study for the Sierra Gorda property, and turned around non-performing assets in Zambia, increasing copper output 50% and silver output 100%. In an executive capacity, he successfully built and/or operated processing operations in Chile, Canada, Zambia, Peru and the United States. He is a skilled metallurgist experienced in the implementation of quality management processes and the processing of skarn ores.
David McMullin
VP of Operations
Mr. McMullin has been with Copper King - Western Utah Copper Company since 1999 and previously served as the Chairman of the Board during the bankruptcy process. Mr. McMullin is a senior level executive with extensive finance and administrative experience in mining, financial, retail, and many other industries. Mr. McMullin has worked in project management and implementation, accounting/bookkeeping management, strategic and business planning, and systems technology design.
Clinton Walker
Director, Active
Mr. Walker is a General Partner at Clarity Partners L.P. Prior to Clarity, Mr. Walker was the Vice President of Corporate Development at Global Crossing focusing on mergers, acquisitions and strategic investments. Previously, Mr. Walker was a Vice President at Pacific Capital Group from 1994 to 1998, an investment firm, where he participated in numerous transactions including the formation of Global Crossing, OpTel and Campuslink. From 1985 to 1994, Mr. Walker worked at Price Waterhouse in the Corporate Finance Group and Entrepreneurial Services Group, and he was responsible for numerous financial advisory assignments and accounting engagements in the middle market sector. In addition, to CS Mining LLC, Mr. Walker currently serves as a Director on the Boards of CaseStack, TelePacific Communications and Westec. Mr. Walker holds a BBA degree from Pacific Union College and is a Certified Public Accountant.
David J. Richards
Director, Active
Mr. Richards is currently the President and Managing Member of Empire Advisors, LLC, an investment organization that does mezzanine financing in various fields. He is currently acting as the Chief Executive Officer of N8 Medical, a company focused on developing novel compounds in the field of antibiotics, antimicrobi als and cancer. N8 is a portfolio company of Empire Advisors. His past experience includes roles as a public company CEO, board member of several public and private companies, a practicing attorney. His educational background includes university degrees in both law and business. Mr. Richards has an accounting degree from Wright State University (B. S. Business, Summa cum Laude, 1974). Subsequently, he earned his Law degree from The Ohio State University College of Law (Juris Doctor, 1977) and also attended the Masters in Taxation program at Capital University.
What's needed to start up a mine
American Bonanza Nears Startup of Copperstone Gold Mine
October 27, 2011 - American Bonanza Gold Corp. (TSX: BZA) ("Bonanza”) is pleased to announce that the Copperstone gold mine is in the final phase of construction prior to the commissioning of the Copperstone gold processing plant, which is scheduled to commence before the end of October.
All major surface administrative construction projects are complete, including new offices, upgraded or new maintenance and truck wash facilities, water distribution systems, power distribution systems, warehouse facilities, and a new assay laboratory. All processing plant and crusher equipment has been installed, with final electrical wiring and piping to be completed by the end of October. All medium voltage electrical wiring to the motor control centers is complete, and all other electrical wiring is nearing completion. The crusher back wall and dump pocket are on schedule to be complete before the end of October.
Earth work and installation of the double lining system for the tailings impoundment are complete. Emplacement of the sand overlay for the tailings impoundment is expected to be complete by the end of October. Installation of the tailings pipeline is on schedule for completion before the end of October.
Bonanza’s mining permits allow mining of ore for treatment in the gold processing plant after the two declines have joined at the north end of the mine, thus providing multiple escape routes and enhanced ventilation. This work is scheduled for completion by the end of October, and would allow for the mining of ore to commence thereafter.
Dry commissioning of the gold processing plant is scheduled to begin near the end of October. During the dry commissioning phase, components of the processing circuit will be individually tested starting with the crushing circuit and grinding mills. Upon successful dry commissioning, the plant will run on water to test for leaks. Upon completion of the water test, non-mineralized rock will be introduced to wet test all circuits and optimize pumping in preparation for the introduction of mineralized rock into the plant.
Bonanza has completed its transition from contract mining to owner mining. All essential mining equipment has been purchased, with several of the major components already delivered to site and at work. Bonanza anticipates improvements in the mining production rate and reduced costs associated with mining as a result of this transition. Copperstone remains on track for a fourth quarter, 2011, mine and mill startup process, with the goal of achieving full production rates by the end of the year.
About Bonanza
Bonanza is nearing completion of the construction activities at the Copperstone gold mine, which will allow for re-activation of mining at the construction-stage Copperstone gold mine. Bonanza is well financed and has no debt. For more information please visit Bonanza’s website at www.americanbonanza.com.
Turning Copper to Cash
By LESLIE P. NORTON Barron’s SATURDAY, OCTOBER 22, 2011
Freeport-McMoRan Copper & Gold trades for far less than the value of its mining assets. The company could be a major beneficiary of the red metal's rebound—or a takeover offer.
A gleaming buying opportunity is emerging in shares of the world's largest publicly traded copper miner, Freeport-McMoRan Copper & Gold. The shares (ticker: FCX) are down 40% this year, to a recent $35, amid bitter labor disputes, collapsing copper prices, flagging global demand and concerns that another financial crisis is looming. One key to copper's comeuppance is the decelerating economy of China, the world's largest buyer of the red metal. Taken together, these negatives have confused the outlook for copper prices—and for Freeport's earnings.
Analysts currently expect Phoenix-based Freeport to earn $5 billion this year, or $5.29 a share, on revenue of $22 billion, versus earnings of $4.3 billion, or $4.65 a share, on revenue of $19 billion in 2010. Shares fetch just 6.6 times 2011 estimates, versus an average price/earnings multiple of 12 in the past decade, and three times earnings before interest, taxes, depreciation and amortization, about half the historic range. "In a double-digit recession, if copper were to go to $1.50 a pound, I see the stock at $20 to $25," says Douglas Chudy, a value investor who follows Freeport for New York money manager Dalton Greiner Hartman Maher.
But for a host of reasons, Chudy doesn't see a recession or $1.50 copper—a price not far from the metal's 2008 nadir. Instead, he says, "copper fundamentals should remain solid for the next few years. I don't think 2011 will prove to be the peak in earnings. If copper gets back to $4, this is a $75 stock in the next couple of years."
Stephen Leeb, another New York money manager and author of Red Alert: How China's Growing Prosperity Threatens the American Way of Life, adds that investors "should view copper and Freeport as aggressive long-term buys." Others on Wall Street could be coming around to that view, as shares held steady late last week, even as copper prices skidded.
More than three-fourths of Freeport's revenue comes from copper, which has fallen to a recent $3.21 a pound from a February high of $4.66. Another tenth derives from gold, and the rest from molybdenum (a mineral that strengthens stainless steel), cobalt, silver and other metals. The company has 120 billion pounds of proven copper reserves, and around 100 billion pounds of other minerals, including gold.
Freeport reported last week that third-quarter earnings fell 11%, to $1.10 a share, because of disruptions at its giant Grasberg mine in Indonesia. Next year the company is expected to earn $4.9 billion, or $5.18 a share, assuming copper prices stay at current levels, which are below the $3.60 a pound that Freeport realized in the third quarter. Broadly, every 10-cent change in copper prices affects Freeport's earnings by 25 cents a share, although sensitivity can change based on production levels and the amount of byproducts mined.
FREEPORT, WHICH PRODUCES FOUR billion pounds of copper a year, says it will lose 100 million pounds of copper output and 100,000 ounces of gold production this year as a result of the strikes. At Grasberg, strikers have been killed and injured in confrontations with the police; they are seeking an eightfold increase in wages. Workers also walked off the job last month at Cerro Verde, Peru's third-largest copper mine, which is majority-owned by Freeport. Company executives declined to comment.
These are sensitive and problematic issues. Yet speaking during the company's most recent earnings conference call, Freeport CEO Richard Adkerson noted that Grasberg is operating at "roughly two-thirds of normal rates," and that the company is mining higher-grade areas to compensate. Capacity utilization was higher in the period than analysts expected, while net extraction costs for Freeport, the lowest-cost copper miner in the world, stayed at a modest 80 cents, owing to high gold prices. Jorge Beristain of Deutsche Bank assumes that each 10% increase in wages at Grasberg would reduce earnings per share by three pennies.
CHINA'S COPPER INVENTORIES, a critical factor in the market, were larger than expected at the end of 2010. In this year's first half, China was thought to have been destocking, but today there are signs it is back in the market. London Metal Exchange warehouses are said to be making major copper deliveries, while the price of physical copper in China is rising.
Long term, copper is becoming scarcer, given more demand from emerging markets and few new big sources of supply. "At prices much below $3 a pound and oil above $80"—which makes mining more expensive—"it is not clear that meaningful additional supplies of copper can be brought to the market, barring a technological miracle," says Leeb. "A resumption of even modest worldwide growth without major technological innovations will imply copper prices dramatically higher than fairly recent all-time highs."
Freeport will be a major beneficiary. The company is far healthier than in 2008, when it had $6.5 billion of net debt stemming from its 2007 acquisition of Phelps Dodge. It since has reduced debt and instead is sitting on $1.6 billion of net cash. With copper at $3.25 a pound, the company would have annual operating cash flow of $7 billion—sufficient to cover its capital-spending needs, taxes and $1 billion of annual dividends.
The Bottom Line
Freeport trades around 35 but could rise to $75 a share in several years if copper works its way up to $4 a pound from a recent $3.21. Freeport plans to boost supply sharply, adding a billion pounds of copper production by 2016 by expanding its mines in Morenci, Ariz., and elsewhere in the U.S., and at Cerro Verde and Tenke Fungurume in Congo. Last week it said it would boost capital spending by $1 billion, to $3.7 billion next year.
Freeport's $33 billion market value is far below replacement value, or the value to a strategic buyer seeking decades of reserves. This year Barrick Gold (ABX) paid $7.5 billion to buy Australian copper miner Equinox Minerals, a price, says Credit Suisse, that would peg Freeport's copper resources at about $123 billion, or $129 a share—not including its gold or molybdenum. Such calculations could present a golden opportunity for mining giants with lots of cash, such as Rio Tinto (RIO), BHP Billiton (BHP), or Brazil's Vale (VALE). Sometimes it's cheaper to mine for copper on Wall Street.
Mining for Value
Freeport could be a tasty morsel for cash-rich mining giants such as Rio Tinto, Vale and BHP. Its shares yield 2.9%.
Recent 12-Month EPS P/E
Company/Ticker Price Change 2012E 2012E
Freeport-McMoRan Copper & Gold/FCX
$34.79 -27.0% $5.18 6.7
Rio Tinto/RIO
47.92 -25.5 9.53 5.0
BHP Billiton/BHP*
72.64 -10.7 8.53 8.5
Vale/VALE
22.21 -32.5 4.67 4.8
Barrick Gold/ABX
44.33 -3.4 6.08 7.3
E=Estimate. *Fiscal year ends June.
Source: Thomson Reuters
China's 1.9 Million Tons of Copper Reserves 10/13/2011 12:11:24 PM
China's copper reserves estimate of 1.9 million tons is nearly double some estimates and as much as the U.S uses in a year. Dow Jones Commodities editor Andrea Hotter discusses what this means for the copper market and if this indicates a slowdown in China.
Copper's Prospects Remain Solid
By MATT DAY Barron's SATURDAY, OCTOBER 1, 2011
The industrial bellwether copper has been making headlines, sliding 25% in September on fears about global economic growth. Prospects for copper-heavy goods have faltered in the face of the euro-zone crisis, sour economic indicators and manufacturing sectors struggling world-wide. The metal is linked with growth because of its use in making everything from cars and consumer electronics to wiring.
But copper futures' plunge to 14-month lows presents an opportunity for those taking a longer view. The market may expect further declines in the short term, but prices should stabilize and resume climbing in the coming months. Supply concerns will help, but the rise will be mostly powered by the Chinese economic locomotive. And that engine should be able to drive prices, despite the specter of a slowdown in Europe and the U.S.
Goldman Sachs this month said only a global setback on a par with the 2008 crisis would derail its bullish view on copper, citing in particular China's monetary-policy options to provide "a strong line of defense" for its economic engine. Morgan Stanley added last week that Chinese buyers would "aggressively restock" metals inventories in the event of a developed-market recession, taking advantage of lower prices after spending much of this year working to avoid paying copper's near-record price. China, which consumed 40% of the world's refined copper last year, imported 1.5 million tons of copper through August, with analysts estimating the country may import as much as one million tons in the fourth quarter.
On Friday, copper settled down 2.9%, at $3.152 a pound on the Comex division of the New York Mercantile Exchange, down 30% this year.
The bull run in copper earlier this year was sparked by lack of the metal in the world marketplace. Prices were pushed by projections that slow-growing mine output would fail to keep up with demand. That panned out during the first half of the year, with the International Copper Study Group saying the shortfall totaled 130,000 metric tons in that period. Those conditions haven't gone away. Strikes at major copper mines in South America and Southeast Asia have failed to catch the interest of investors closely watching Europe's debt crisis and other headwinds to expansion.
Few analysts are willing to offer predictions on exactly when the pressure on copper prices may begin to ease. But China should both carry and drive copper prices despite any macroeconomic swirl. Little is capable of stopping that train.
CopperKen quote:
the big game is being played out of our sight.
As it should and as mandated by the court.
Funny.
In today's world only the hardest balls will make it.
Range, and that's a French e.
CopperKen wrote: I agree Rich. It is inevitable. And I can think of a few others that should go...like the whole JBOD. It is slow and frustrating waiting for the courts to figure out what they are doing. I wish we could just boot the whole group ourselves. I know...patience....patience
Will the BK judge allow reorganization without a competent CEO, management team and board of directors?
It appears you're making a strong case for the court to throw out as inadequate and without merit any and all attempts by the equity holders to reorganize the company and allow for a restructured start up of mining and production.
Copper extraction techniques
From Wikipedia:
Copper extraction techniques refers to the methods for obtaining copper from its ores. This conversion consists of a series of chemical, physical, and electrochemical processes. Methods have evolved and vary with country depending on the ore source, local environmental regulations, and other factors.
As in all mining operations, the ore must usually be beneficiated (concentrated). To do this, the ore is crushed. Then it must be roasted to convert sulfides to oxides, which are smelted to produce matte. Finally, it undergoes various refining processes, the final one being electrolytic. For economic and environmental reasons, many of the byproducts of extraction are reclaimed. Sulfur dioxide gas, for example, is captured and turned into sulfuric acid — which is then used in the extraction process.
Most copper ores contain only a small percentage of copper metal bound up within valuable ore minerals, with the remainder of the ore being unwanted rock or gangue minerals, typically silicate minerals or oxide minerals for which there is often no value. The average grade of copper ores in the 21st century is below 0.6% Cu, with a proportion of ore minerals being less than 2% of the total volume of the ore rock. A key objective in the metallurgical treatment of any ore is the separation of ore minerals from gangue minerals within the rock.
The first stage of any process within a metallurgical treatment circuit is comminution, where the rock is crushed to produce to produce small particles (<100 µm) consisting of individual mineral phases. These particles are then separated to remove gangue, thereafter followed by a process of physical liberation of the ore minerals from the rock. The process of liberation of copper ores depends upon whether they are oxide or sulfide ores.
Subsequent steps depends on the nature of the ore containing the copper. For oxide ores, a hydrometallurgical liberation process is normally undertaken, which uses the soluble nature of the ore minerals to the advantage of the metallurgical treatment plant.
For sulfide ores, both secondary (supergene) and primary (unweathered), froth flotation is utilised to physically separate ore from gangue.
For special native copper bearing ore bodies or sections of ore bodies rich in supergen native copper, this mineral can be recovered by a simple gravity circuit.
Sulfide ores
Secondary sulfides – those formed by supergene secondary enrichment – are resistant (refractory) to sulfuric leaching. These ores are a mixture of copper carbonate, sulfate, phosphate, and oxide minerals and secondary sulfide minerals, dominantly chalcocite but other minerals such as digenite can be important in some deposits..
Supergene ores rich in sulfides may be concentrated using froth flotation. A typical concentrate of chalcocite can grade between 37% Cu to 40% Cu in sulfide, making them relatively cheap to smelt compared to chalcopyrite concentrates.
Some supergene sulfide deposits can be leached using a bacterial oxidation heap leach process to oxidize the sulfides to sulfuric acid, which also allows for simultaneous leaching with sulfuric acid to produce a copper sulfate solution. As with oxide ores, solvent extraction and electrowinning technologies are used to recover the copper from the pregnant leach solution.
Supergene sulfide ores rich in native copper minerals are refractory to treatment with sulfuric acid leaching on all practicable time scales, and the dense metal particles do not react with froth flotation media. Typically, if native copper is a minor part of a supergene profile it will not be recovered and will report to the tailings. When rich enough, native copper ore bodies may be treated to recover the contained copper via a gravity separation circuit where the density of the metal is used to liberate it from the lighter silicate minerals. Often, the nature of the gangue is important, as clay-rich native copper ores prove difficult to liberate.
Oxide ores
Oxidised copper ore bodies may be treated via several processes, with hydrometallurgical processes used to treat oxide ores dominated by copper carbonate minerals such as azurite and malachite, and other soluble minerals such as silicates like chrysocolla, or sulfates such as atacamite and so on.
Such oxide ores are usually leached by sulfuric acid, usually using a heap leach or dump leach process to liberate the copper minerals into a solution of sulfuric acid laden with copper sulfate in solution. The copper sulfate solution (the pregnant leach solution) is then stripped of copper via a solvent extraction and electrowinning (SX-EW) plant, with the barred sulfuric acid recycled back on to the heaps. Alternatively, the copper can be precipitated out of the pregnant solution by contacting it with scrap iron; a process called cementation. Cement copper is normally less pure than SX_EW copper. Commonly sulfuric acid is used as a leachant for copper oxide, although it is possible to use water, particularly for ores rich in ultra-soluble sulfate minerals.
In general froth flotation is not used to concentrate copper oxide ores, as oxide minerals are not responsive to the froth flotation chemicals or process (i.e.; they do not bind to the kerosene-based chemicals). Copper oxide ores have occasionally been treated via froth floatation via sulfidation of the oxide minerals with certain chemicals which react with the oxide mineral particles to produce a thin rime of sulfide (usually chalcocite), which can then be activated by the froth flotation plant.
Copper-bearing Minerals
Chalcopyrite
CuFeS2
34.5 % Copper
Chalcocite
Cu2S
79.8
Covellite
CuS
66.5
Bornite
2Cu2S•CuS•FeS
63.3
Tetrahedrite
Cu3SbS3 + x(Fe,Zn)6Sb2S9
32–45
Malachite
CuCO3•Cu(OH)2
57.3 % Copper
Azurite
2CuCO3•Cu(OH)2
55.1
Cuprite
Cu2O
88.8
Chrysocolla
CuO•SiO2•2H2O
37.9
Chuck writes: We are continuing to make good progress on our Feasibility Study. We have some of the best and brightest working on it for us.
Is this a feasibility study on the property?
Chuck writes: We are building a strong and capable team of experts, advisers and managers with whom we can trust the future of the company.
Do these people represent a new management team that will take over company operations upon CPRKQ's exit from bankruptcy?
ESHC files a brilliant Plan of Reorganization with the bankruptcy court.
Will the judge approve a successful exit without a competent management team in place to effectively implement the plan?
Copper Supply and Demand
Copper Still Carries Electricity
By TATYANA SHUMSKY | Barron’s SATURDAY, MARCH 19, 2011
Prices for the metal are down, but the disaster in Japan makes heightened demand very likely.
The recent decline in the price of copper makes the metal an attractive asset for both short- and long-term investors.
The metal is down 6.4% from February's record high of $4.6375 a pound, as a natural disaster and nuclear emergency in Japan intensified losses sparked by weaker-than-expected Chinese demand. Friday the most actively traded copper contract, for May delivery, was down 0.1% at $4.3390.
But market attention already is shifting from Japan's troubles to the likely spike in copper demand, as the world's third-largest economy rebuilds after a 9.0-magnitude earthquake and subsequent tsunami. "Everything from the power grid, to housing construction, to autos, to consumer appliances are going to be required, and all the base-metal markets are going to benefit from the rebuilding effort," says Max Layton, deputy head of commodities at Macquarie Securities Group. As an element that conducts electricity easily, copper will be incorporated in virtually all these items.
Analysts have been busy calculating just how much additional copper Japan will need. Japan brought in about 1.1 million metric tons of copper last year, according to analysts at the Royal Bank of Scotland. At the moment, imports have slowed as shipping and infrastructure were damaged by the quake. However, when the recovery effort gets under way, Japan's purchases are likely to soar.
Even before the disaster, global copper demand was forecast to outpace supply this year and next, paving the way for steep price gains. The International Copper Study Group pegged this year's shortfall at 400,000 metric tons, or about 2% of production. Goldman Sachs forecasts the price of copper will average around $4.63 a pound in 2011, while Macquarie Group predicts prices to average $5 a pound.
If these predictions play out, short-term investors who enter the copper market at the current price, around $4.20, could make a tidy profit.
Some have argued that current market prices overvalue copper and leave miners with a wide profit margin, given that marginal cost, the cost of additional output, tops out around $2.30 a pound.
But the current marginal costs account for production at existing mines, where reserves are dwindling and construction and exploration costs have long been paid. Future copper supply will come at a much steeper price, as the easy-to-mine deposits have been exploited, and mining companies are forced to venture to less politically stable countries with higher security and development hurdles.
Finding a sizable resource takes time, as does developing it. Even a jumbo deposit like Ivanhoe Mines' (ticker: IVN) Oyu Tolgoi in mining-friendly Mongolia will need a minimum of five years of development before it is ready for production. Ivanhoe partnered with Rio Tinto (RIO) in 2009 to fast-track development of the project, which is expected to start commercial production in 2013.
Moreover, new deposits and expansion projects are barely replacing current production, meaning supply is likely to stay the same while demand continues to grow.
This makes the case for long-term investors to get into the metals market now, while copper is comparatively cheap.