Home > Boards > Free Zone > Industry Specific > Metals and Mining Sector Ideas

« ... Blue-Sky Gold Potential Right in America's Backyard

Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
goldenpolarbear Member Profile
Followed By 18
Posts 6,862
Boards Moderated 0
Alias Born 03/02/13
160x600 placeholder
goldenpolarbear   Wednesday, 05/09/18 06:43:23 AM
Re: None
Post # of 111 
« ...Blue-Sky Gold Potential Right in America's Backyard


« ...Arizona is also seeing zinc exploration. Arizona Mining Inc. (AZ:TSX) recently received, four months ahead of plan, all the permits required to construct two exploration declines at its Taylor zinc-lead-silver project in Santa Cruz County. The project currently has a Measured mineral resource of 15.2 million tons grading 9.6% zinc equivalent; 85 million tons grading 10.5% zinc equivalent Indicated; and 43 million tons grading 11.9% zinc equivalent Inferred.

Gold has a much lower profile than copper and zinc in the state. While visitors can pan for gold along several of Arizona's rivers, larger-scale gold mines are as scarce as water in the Sonoran desert.

That is about to change. Kerr Mines Inc. (KER:TSX; KERMF:OTC; 7AZ1:FRA) has been actively exploring bringing the past-producing Copperstone Gold Mine in western Arizona back to life.

Copperstone, located in mining-friendly Arizona, has a lot going for it. The fully permitted mine is built and there is infrastructure on site. It already has a 300,000 ounce resource, and the land package offers lots of exploration potential.

Copperstone was mined by Cyprus Minerals as a heap-leach surface mine from 1989 to 1993, when it was decommissioned. Between 2010 and 2014, a previous junior mining company developed a small underground operation that was put on care and maintenance due to engineering and financial issues, as well as a downward trending gold price. Some 500,000 ounces of gold have been produced at the mine.

Kerr acquired Copperstone in 2014.

The previous owners of the mine had made large investments in infrastructure and drilling. The existing underground access, mill, surface impoundments and related infrastructure are well built and are in sound working condition, according to the company. The infrastructure investments were made relatively recently and cost the previous operator between CA$50 million and CA$60 million; today they would cost over CA$100 million to replicate, Kerr CEO Claudio Ciavarella told Streetwise Reports.

Kerr over the last six months or so has released some eye-popping drill results. On Feb. 21, the company announced that Copperstone hole KER-17U-50 returned a 7.3 meter drill hole interval with 102.7 g/t gold, an off-the-charts result.

On January 15, Kerr announced an increase of 255% of mineralized extents in the Footwall zone, "including an increase of 223 meters of strike and 91 meters of dip extents compared to previously announced Footwall Zone." The company also noted the discovery of a "new and separate Footwall mineralized zone with 105 meters of strike and 240 meters of dip." This area remains open along strike and dip. The company also noted the presence of copper as high as 2.78%, which could be an additional revenue source for the mine.

And on December 5, Kerr noted that hole KER-17U-12's total interval length is 60.5 feet at 27.0 g/t gold, another high-grade result that also increased the down-dip extension of the deposit.

The company released results from its prefeasibility study on April 10 .

According to the prefeasibility study, the 300,000-ounce resource begins beneath an open pit 500-feet deep, and the company's biggest news suggests interesting numbers for future development. Based on the company's recent news release , it expects to jump into production quickly.

A Clear Path to Production

The study shows strong highlights for both the quality and quantity of the gold found in Copperstone. The company announces a base case of $1,250 per ounce of gold, which is about $65 below today's price. With average annual sales of 38,347 ounces gold, the company expects payback of initial capital ($22.7 million) within 2.3 years of a 2019 production start. That low capex of $22.7 million also includes a mine equipment capital lease. With a study life operating margin (EBITDA) of $89 million and an internal rate of return of 40%, the company is confident in starting production next year.

With the infrastructure in place and strong numbers, the company says it has a 95% average of recovering gold using crushing, grinding, and whole ore leach.

CEO Claudio Ciavarella estimated that the company could be looking at 100,000 ounces of gold per 100 vertical feet of its Copperstone project. While the open pit was initially 500 feet deep, the company has added an additional 300 feet. Ciavarella says Kerr Mines could go another 400 to 500 feet deep.

"If this mineralization continues at the same rate, this would mean that we could grow the resources to around the 1,200-1,400-foot level and add another 300,000 to 400,000 ounces in resources," explained Ciavarella.

Kerr Mines' president, Martin Kostuik, shares the excitement: "The results of this PFS display the strong near-term production opportunity for the Copperstone Mine and robust returns for our investors. This is just the beginning."

The company threw out big-picture numbers for the long term. According to the study, the study life operating margin (EBITDA) is $89 million, with an internal rate of return of 40%.
.... »

Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
Follow Board Follow Board Keyboard Shortcuts Report TOS Violation
Current Price
Detailed Quote - Discussion Board
Intraday Chart
+/- to Watchlist