THE BOURSE WHISPERER: Australian-American Mining Corporation (ASX: AIW) has entered into a letter of intent to acquire a 50 interest in a copper mine in Nevada in the United States of America.
The Victoria copper mine is located in an established mining region, 120 kilometres southeast of Elko in the eastern part of Nevada.
Location of the Victoria copper mine, Nevada. Source: Company announcement
The mine was discovered and explored underground by Anaconda Copper in the 1940’s, then operated by Anaconda from 1975 to 1977, producing ore from both an open pit and an underground mine.
The mine closed due to declining copper prices in 1977.
It was briefly re-started in 1980 but was soon closed as then operator, Day Mines, was taken over.
When producing, the underground at the Victoria copper mine operated at 1,000 tons per day via sub level caving.
“This acquisition represents a significant milestone for the company,” AusAmerican Mining managing director Richard Holmes said in the company’s announcement to the Australian Securities Exchange.
“We believe that we will be able to rehabilitate the mine and be in production by mid-2014.
“This project adds significantly to our copper portfolio in the USA, a jurisdiction in which we feel very comfortable given its size, security, infrastructure, cost advantages and importantly, demand for copper.
“The project is highly attractive to AusAmerican due to its relatively low entry cost, near term production potential and excellent exploration upside opportunities.
“This acquisition will enable AusAmerican to self-fund exploration and the further development of the Victoria Mine, Blue Bell and De Soto copper projects.”
AusAmerican considers the project and regional exploration potential to be excellent, highlighting the small Eugenia deposit as an example.
The Eugenia deposit is situated two kilometres from the Victoria copper mine and is described by AusAmerican as a massive sulphide deposit that was discovered using rudimentary geophysics.
The company indicated there to be a number of high-priority targets identified by Anaconda Copper which require testing.