Projects

Gunnison Copper Project, Arizona

The Gunnison copper project is located in Cochise county, approximately 65 miles (105km) east of Tucson, Arizona, within the historic Johnson Camp Mining District. The project covers an area of approximately 9,560 acres.

Producer of
Copper cathode
Owner
Excelsior
First Production
Q4 2019
Estimated Investment
$49m
Reserves
4.5 billion pounds of copper
Mining Method
In-situ recovery (ISR)
Mine Life
27 years

The Gunnison copper project is located in Cochise county, approximately 65 miles (105km) east of Tucson, Arizona, within the historic Johnson Camp Mining District. The project covers an area of approximately 9,560 acres.

The project is owned by Excelsior’s wholly owned subsidiaries Excelsior Mining Arizona (ExcelsiorArizona) and Excelsior Mining JCM (Excelsior JCM). Excelsior plans to develop the project in three stages.

Pre-feasibility study of the project was completed in February 2014 and was updated in January 2016. Construction of the project started in December 2018, and the first copper production is expected to be made in the fourth quarter of 2019. The project is expected to produce 2.2 billion pounds of pure copper cathode.

The project is expected to have a production life of 27 years, which includes a commercial production life of 24 years.

The overall investment needed to bring the copper project into production is estimated to be $49m (initial capital). The latter two stages will be funded from the cash generated from stage one operations.

Geology and mineralisation

The project involves the development of the North Star deposit, which is located on the eastern boundary of the Little Dragoon Mountains, which primarily hosts Tertiary Texas Conyon Quarts Monzonite in the southern portion, whereas the northern half of the mountain hosts Pinal Group schists and the Paleozoic sediments.

Primary mineralisation occurs as stringers and veinlets of chalcopyrite and bornite. The mineralisation remains open at depth and to the north, south, and east. Majority of the mineralisation occurs as chrysocolla, which has formed as coatings on rock fractures and as vein fill, while some of the oxide mineralisation occurs as replacement patches and disseminations.

Reserves and production at Gunnison copper project

As of July 2015, the mine was estimated to hold combined measured and indicated resources of 873 million tonnes (Mt), grading 0.29% Cu and containing 4.99 billion pounds (Blbs) of copper, while the inferred resources are estimated to be 187Mt, grading 0.17% Cu and containing 576 million pounds (Mlbs) of copper.

The probable reserves are estimated to be 782Mt grading 0.29% Cu and containing 4.5Blbs of copper.

The initial stage targets to produce at the rate of 25Mlbs of copper cathode a year, while stage two targets a production rate of 75Mlbs a year, and Stage three targets a full production rate of 125Mlbs a year.

Production from stage two is expected to begin in the fourth year, whereas production from stage three is expected in the seventh year.

In-situ recovery (ISR) method at Gunnison project

The in-situ recovery (ISR) mining method has been proposed for the project. The deposit has all the traits conducive for ISR: it is located below the water table, the rocks are highly fractured and permeable, and the oxide minerals are readily leachable.

The ISR method involves the drilling of boreholes, integrating both injection and recovery wells into the copper ore-body. A low pH solution (acid) is pumped into the injection wells to dissolve the targeted minerals. The solution moves through the rocks in a controlled manner to the recovery wells, and from there it is pumped to the surface for processing.

The copper-rich solution is then conveyed to the processing plant to produce pure copper cathode, whereas the remaining solution from the process plant is re-acidified and injected back into the wells.

Processing facilities for the project

The adjacent Johnson Camp Mine (JCM), which was acquired by Excelsior from Nord Resources in December 2015, will be used as the processing facility. The solvent extraction and electro-winning (SX/EW) plant has a rated processing capacity of 25Mlbs a year, and will continue to serve all the three project stages.

A new SX/EW plant, with a rated capacity of 50Mlbs a year, will be constructed in the third year and commissioned in the fourth year. The plant will incorporate 80 EW cells. It will further be expanded by incorporating an additional 80 EW cells in stage three.

”An acid generation plant is planned to be constructed at the project site in the sixth year, whereas a water treatment plant will be constructed in the sixth and seventh years.”

Financing

Excelsior Mining secured $75m project financing, in November 2018, from Triple Flag Mining Finance Bermuda for the Gunnison copper project. It consists of a $65m copper metal stream and a $10m private placement of common shares of Excelsior.

Excelsior also entered a subscription agreement with the affiliates of Greenstone Resources and raised $9.44m for the project. Excelsior will issue more than 13 million common shares, priced at approximately C$0.95 ($0.72) a share, to Greenstone as part of the transaction.

Infrastructure

An acid generation plant is planned to be constructed at the project site in the sixth year, whereas a water treatment plant will be constructed in the sixth and seventh years of production.

Access to the project site will be provided primarily by the existing Interstate 10, and a new one-mile asphalt paved access road to the Gunnison wellfield and plant site will be constructed as part of the project.

A two-mile (3.22km) high-density polyethylene (HDPE) pipeline will be constructed to pass the solution from JCM to the processing facility. New acid storage facilities will also be constructed as part of the project.

Power requirement for the project will be met through an existing 69kV power line, owned by the Sulfur Springs Valley Electric Cooperative, which feeds the existing Johnson Camp Mine. A 0.3-mile power line will be constructed to connect the main power line with the project’s main electrical substation.

Fresh water for the project will be sourced from existing wellfields and mine shafts located within the JCM site. The water will be pumped to the project site and stored in existing and new water storage tanks.

Key players involved

Schmueser and Associates was awarded the general construction contract for the project.

The updated PFS was compiled by M3 Engineering & Technology Corporation (M3), with input from Leach for the metallurgy and leaching recovery studies, MDA for the mineral reserve and mineral resource estimates, as well as the geological studies, and Clear Creek and Associates for the hydrology, mining method, permitting, and environmental studies.

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