Arizona-based El Capitan Precious Metals is set to start onsite mining operations at its New Mexico mine.
This process will offset the cost of mining by separating and selling the high-quality iron that represents a significant part of the El Capitan ore.
The company said that the strategic step follows the impressive results from its refined precious metals recovery process. It will be a challenge to recover the metals because of the presence of iron in the El Capitan ore.
The ECPN board performed a mining operation opportunity analysis that would demonstrate consistent and repeatable proof-of-recovery data for prospective buyers and boost the sale of the property.
The company plans to separate and sell the high-quality iron from the El Capitan ore and offset the proceeds against the expense of the mining operations and generate cash flow for the company.
ECPN chairman John F. Stapleton said: "We will literally turn a challenge into a significant economic advantage in the overall mining and recovery process by separating and selling the iron."
The company has engaged in discussions with two mining and logistics companies to try to find a contract miner.
One of the appointed companies would oversee all mining, crushing, separation, and pelletising activity, while the stockpiled, non-ferrous material separated from the iron would be further crushed and concentrated by ECPN.
ECPN president and CEO Chuck Mottley said: "An especially positive aspect of this newly-enhanced precious metals recovery process is that it does not use cyanide or any other caustic chemicals."
Image: A stockpile of iron ore pellets will be used in steel production. Photo: courtesy of Lars Lentz.