CMC Metals Ltd. (CMCXF)

[BMGS]

Old article but worth reading
The article was published in late 2010 at
http://miningmarketwatch.net/cmb.htm

1) Bishop Mill facility, Bishop California, USA - 100% Owned, Long term debt free
Fully permitted mill with water rights grandfathered in • Only mill within 8 hour driving radius

Figure 1. CMB.V's Bishop Mill facility Fully permitted mill, upgradable to 300TPD.
CMC Metals 100% owned Bishop Mill facility, located in Bishop California, was built in 1985 for Mammoth Mountain Mining and acquired earlier this year by CMC Metals to capitalize on its unique positioning as a fully permitted mill sitting geographically as the only mill located within a very large geographic radius central to a number of permitted gold, silver, and poly-metallic mines. The Mill is a permitted past operational mill capable of gravity concentrating gold and sulfide ores. CMC Metals also owns five claims which surround the Mill, an additional 3200 square foot warehouse, and a 960 square foot equipment maintenance building. The Mill is fully secured by fence, line power to the site, one mile from a paved highway and contains a water well (with grandfathered rights to draw) for operational use.

The recently purchased Bishop Mill is intended to be a source for permitted mines in the area to process ore. The company intends to not only earn income from ore concentrate but will also seek to acquire a potential interest in the underlying mineral properties. Mining MarketWatch Journal contacted Donald Wedman, B.Sc. (Engineering), P.Eng., President & CEO of CMC Metals Ltd about the project and he was able to confirm CMC Metals is in active negotiations with several local permitted mines; "We have a number of proposals to contract use of the mill plus also we have a list of four mining properties that we are negotiating on right now to have as our own ore to be processed there." Mr. Wedman felt the Bishop business unit would most likely be meaningfully operational showing significant results by mid 2011.

CMC is currently in the process of expanding the tailings pond and doubling the mills rated capacity to 100-tonne-per-day (TPD), the mill is ultimately upgradable to 300TPD. As part of the upgrade CMC Metals is including a prep mill and gravity tables to help concentrate some of the heavies prior to going through the floatation. By upgrading the tailings pond to a class A double lined pond CMC Metals will be able to pretty well process any type of ore. When we contacted CMC Metals on October 19, 2010 they were in the process of completing the last of the permitting of a new tailings pond. Donald Wedman offered the following synopsis regarding the advantage of upgrades and the expected profit potential for CMC Metals "Because the Bishop area is central to a number of gold, tungsten, and silver properties, also a number of lead-zinc-silver properties, the improved tailings pond opens up the operation to process any type of ore through there. There are many permitted mines in the area but they can’t produce anything as there is no milling facility within an economic radius of where they are, they would have to go down to Mexico. We are really excited about our Bishop facility, when the first quarter operating results come in investors will finally realize why we had acquired that mill. The light will go on."

See related November 23, 2010 release entitled "CMC Metals Ltd. Bishop Mill Upgrades Double Capacity"; where CMC Metals announced the purchase of a coarse gravity circuit for the Bishop Mill facilities located in Bishop California. The upgrades include a Krupp mill and gravity tables to produce a coarse concentrate prior to the grinding circuit. The addition will expand the capability of the types of ores the mill can handle plus double the mill capacity to 100 tons per day. Equipment, installation and commissioning were purchased for $75,000. The equipment has been transported to the site. Foundation and concrete works are underway and installation completion is scheduled by year end.

Inyo County California is an active mining area with defined mineral deposits of silver, gold, copper and tungsten. The Company is in negotiations with surrounding property owners to provide material for the Bishop Mill facilities.
Further, the Company would like to announce that the application for construction of a Class A tailings pond has been completed and submitted to the Lahonton Water Board for approval. SRK International Consultants assisted in developing the design specifications and application to construct the tailings pond which will double the capacity of the current tailings pond.

This acquisition gives CMC Metals physical hard assets, a form of stable revenue/cash flow when up and operating, and leverage in facilitating opportunity in the area as CMC Metals will be able to gain an interest in the ore supplied to the mill. Management could not afford to not acquire Bishop when the opportunity presented itself. The attraction of a grandfathered fully permitted mill central to numerous quality ore bodies with no competition was too appealing, especially considering CMB.V effectively acquired the facility for a mere USD$350K. Mining MarketWatch Journal notes that without the grandfathering such a facility could not be close to replicated in California in today, and even if it could the replacement value of the Bishop mill (if a similar structure were attempted to be built today) would be in the multi-millions.
- end of release synopsis -

This facility essentially becomes the default solution for mineral rich properties owned by people in the area, many that have owned their property for generations (willed by ancestors that were miners) yet do not have the skill set or ability to develop it.

The Bishop mill also gives CMC Metals the ability to expand its productive months beyond that it was restricted to on its other project in the Yukon where 8 months of the year the weather takes precedence. At the Bishop mill CMC Metals will have revenue, cash flow, activity, and progress year round.

2) Silver Hart Silver Mine and Mill, Yukon, Canada - 100% Owned,
First bulk sample taken (this Sept. 2010) from surface of high grade veins grades over 5000g/t silver

Figure 2. CMC Metals' Silver Hart - CMC Metals has modeled the mining approach. They will strip mine the TM zone down to the underground adit they have now and there will be two locations where they will be splitting the opening in the pit; one will drive an underground drift over to the S zone, a stack fault that parallels the TM to the northeast about 130 metres off the TM pit. CMB.V will continue following the vein heading NE.

Figure 3. High Grade TM Zone Veins The TM zone alone contains an estimated historical high grade silver resource of 6.5 million ounces (non NI 43-101 compliant inferred resource).
When CMC Metals Ltd. was incorporated in 2005, it was done so with the purpose of acquiring a medium-size high grade precious metals deposit that was well advanced in exploration, yet one that fell just below the hurdle rate for most large corporations. Once acquired, the plan was to advance the project to fruition. Silver Hart was identified as an ideal project -- when the property was secured in 2005 Silver Hart made sense with silver under US$6/oz, now silver is well over $20/oz, it appears the plan is ready to come to fruition in spades for CMC Metals shareholders starting with a series of high grade bulk samples.