Capstone and BHP Billiton Copper reach Exploration Agreement on Pinto Valley Copper Project

Capstone Mining (TSX: CS) has signed an 18-month agreement to drill and collect metallurgical samples at BHP Copper's Copper Cities project, 10 kilometers east of the Pinto Valley copper mine in Capstone, Arizona.

Copper Cities was developed in the 1950s as part of U. S. efforts to increase copper production to support the Korean War. The project includes opencast mining, concentrate production and leaching. Grinding stopped in 1989 and leaching lasted until 1982.

The USGS estimates that the project has 68.7 million tons of ore and a copper grade of 0.66 per cent. Total production is 895 pounds of copper, including 7500 pounds of cathode copper.

The Pinto Valley open-pit mine, concentrator and solvent extraction / electrowinning (SX/EW) plant are located approximately 125km east of Phoenix. Production began in 1975, and since then, the mine has produced more than 4 billion pounds of copper, including 500 million pounds of cathode copper. Capstone acquired the project from BHP Copper in 2013.

"We believe that Tongcheng is geologically a mirror image of the Pinto Valley with the same host rock and age," said Brad Mercer, senior vice president of strategic projects and exploration at Capstone. "our ongoing plan calls for a C $6.7 million two-stage drilling plan aimed at matching historical boreholes and selecting some of them for metallurgical testing."

Capstone is currently studying how to increase the production of Pinto Valley in order to increase the cathode production of mineralized waste to 300 million to 350 million pounds per year within two decades. The study, known as PV4, includes three potential uses of technological innovation.

Jetti catalytic leaching technology, which can increase the boundary grade and leachable tonnage of the plant by increasing the mining rate, rolling grade and leaching amount. Column leaching tests are being carried out in the first half of this year.

Coarse particle flotation technology can increase copper recovery by at least 6% to a total recovery of about 90%, while providing flexibility to increase mill output.

Pyrite agglomeration transfers acid-producing minerals (such as chalcopyrite) from tailings to heap leaching so that more copper can be recovered and some acids needed for production can be produced. The capital cost of agglomeration is approximately C $7 million (US $5.6 million) and the payback period is one year.

In June last year, Capstone completed its SV3 mill optimization project, which included the replacement of the shell of the No. 3 ball mill. By upgrading the tailings concentrator, the project has increased production and copper recovery, while reducing water consumption.

The Pinto Valley project has measured and indicated a resource of 1.4 billion tons, with a copper grade of 0.29% (including 8.9 billion pounds) and 0.006% molybdenum (including 170 million pounds). The inferred resources are 170.6 million tons, with a copper content of 0.26% and a molybdenum content of 0.006%.

In addition, Pinto Valley,Capstone operates the Cozamin copper and silver mine in Mexico and develops the Santo Domingo copper, iron and gold project in Chile. The company used 85000 tons of copper from Pinto Valley and Cozamin to meet the 2021 production guidelines.

This year's guidelines have been set at 82000 to 90000 tons of copper, including copper from the Santo Domingo project. Capstone further said it plans to spend $153 million on capital projects and $11.2 million on exploration in 2022.