{"id":1091766,"date":"2018-12-27T17:29:41","date_gmt":"2018-12-27T17:29:41","guid":{"rendered":"http:\/\/www.mining.com\/?p=961325"},"modified":"2018-12-27T17:29:41","modified_gmt":"2018-12-27T17:29:41","slug":"crown-mining-preps-moonlight-for-next-copper-rally","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1091766","title":{"rendered":"Crown Mining preps Moonlight for next copper rally"},"content":{"rendered":"

Earlier this year,\u00a0Crown Mining\u00a0(TSXV: CWM) bought 100% of the Moonlight-Superior property in northeastern California for $375,000 in cash and 2.75 million shares.<\/span><\/p>\n

The land package is best known for its Superior and Engels deposits, which produced over 161 million lb. copper as underground mining operations between 1915 and 1930.<\/span><\/p>\n

But the property, 200 km northeast of Sacramento and 145 km northwest of Reno, also has a third deposit called Moonlight that wasn\u2019t discovered until the 1960s, and was never developed. Moonlight has 252 million indicated tonnes grading 0.25% copper for 1.3 billion lb. contained copper, and 109 million inferred tonnes averaging 0.24% copper for 534 million lb. copper.<\/q><\/span><\/p>\n

Moonlight, about 2.5 km from Superior and Engels, has nearly 1.5 billion lb. copper, the company says.<\/span><\/p>\n

According to a resource estimate Crown completed in December 2017, which was based on 202 historic drill holes, Moonlight has 252 million indicated tonnes grading 0.25% copper for 1.3 billion lb. contained copper, and 109 million inferred tonnes averaging 0.24% copper for 534 million lb. copper.<\/span><\/p>\n

Of the historic drill holes, 189 were drilled by American Exploration between 1966 and 1970, and the other 13 were undertaken by Sheffield Resources between 2005 and 2006.<\/span><\/p>\n

In March, Crown completed a preliminary economic assessment (PEA) on Moonlight that concluded an open-pit mine would produce an average of 85 million lb. copper, or 163,000 tons copper concentrate a year, over a 17-year mine life.<\/span><\/p>\n

The early-stage study did not take into account any mineralization from the Superior deposit, which, according to an inferred resource estimate from 128 historic drill holes Crown completed in 2014, has another 54.4 million inferred tonnes grading 0.41% copper for 487 million lb. contained copper.<\/span><\/p>\n

Using a base case copper price of $3.15 per lb., the PEA forecast a 16.4% internal rate of return, $179-million net present value and $708-million operating cash flow, all post-tax.<\/span><\/p>\n

Initial capital costs were forecast to reach $513 million, including a $71-million contingency, and the study estimated a pre-tax payback period of just under five years.<\/span><\/p>\n

\"\"Crown Mining\u2019s Moonlight-Superior property in northeastern California. Credit: Crown Mining.<\/p>\n

\u201cThe bottom line is the PEA helps us to talk to people about the merits of the property,\u201d Crown\u2019s president and CEO Stephen Dunn says. \u201cThe PEA shows people that this thing can be economic at $3.15 per lb. copper, so it makes it a lot easier to talk to people about the pros and cons.\u201d<\/span><\/p>\n

Dunn notes that the study did not factor in any gold credits, and points out that previous owners of Moonlight did not assay the first 15 metres of oxide, which so far has been categorized as waste.<\/span><\/p>\n

\u201cIt is actually mineralized and can be mined,\u201d he says, \u201cso we need to do more work and drilling to be able to delineate the oxide, and that will help the economics.\u201d<\/span><\/p>\n

Dunn says it would cost $500,000 to punch 20 holes into Moonlight\u2019s upper oxide layers, but with the current market as poor as it is for juniors with early-stage projects, the timing just doesn\u2019t seem to be right.<\/span><\/p>\n

\u201cWhen the markets get better and it wants juniors, we will do that, but my market cap is only $5 million, so we really don\u2019t get any appreciation for what we have,\u201d he says. \u201cIf we tried to raise $2 million right now it would dilute my shareholders too much, so I\u2019m waiting for markets to get better.\u201d<\/span><\/p>\n

Dunn, who founded the company, is the largest shareholder, with 20% of Crown\u2019s 40 million common shares outstanding. Five other investors (most of them high school and university friends) own another 30%.<\/span><\/p>\n

\u201cWhenever we need money we just pass the hat,\u201d Dunn says. \u201cWe put in $100,000 a month ago, and I did half of that.\u201d<\/span><\/p>\n

The company has 40 million common shares outstanding and has traded within a 52-week range of 6.5\u00a2 (October 2018) to 28\u00a2 (March 2018).<\/span><\/p>\n

Dunn doesn\u2019t kid himself about the prospects of putting Moonlight into production any time soon.<\/span><\/p>\n

\u201cNo one is going to build this mine unless copper is over $3.50 per lb.,\u201d he says. \u201cBecause of the last cycle, producers don\u2019t want to start building huge new mines unless they\u2019re almost assured of making profits in the first few years.\u201d<\/span><\/p>\n

But Dunn is bullish on the market fundamentals for the metal, and likes to quote mining guru Robert Friedland of\u00a0Ivanhoe Mines\u00a0(TSX: IVN), who predicted earlier this year that \u201cyou will need a telescope to see copper prices in 2019.\u201d<\/span><\/p>\n

Dunn says copper is setting itself up for \u201ca pretty big rally\u201d next year and could hit $5 per lb. \u201cvery soon.\u201d<\/span><\/p>\n

\u201cEveryone is pointing fingers at trade wars, but the thing is, the global economy is still growing,\u201d he says. \u201cThere\u2019s still positive growth and demand everywhere \u2026 the reality is, there\u2019s a copper deficit, and one of these days prices are going to reflect that.\u201d<\/span><\/p>\n

He also dismisses arguments that copper demand from China \u2014 which he calculates consumes almost half the global market for the metal \u2014 can\u2019t continue at the same pace.<\/span><\/p>\n

\u201cA lot of people who don\u2019t understand economics say, \u2018that can\u2019t last,\u2019 but of course it can,\u201d he exclaims. \u201cThey are building out their grid. They are building new office buildings and electric trains and will continue to use the same amount of copper.\u201d<\/span><\/p>\n

Meanwhile, he reasons, \u201cIndia is looking over China\u2019s shoulder and wants the same things.\u201d<\/span><\/p>\n

Like most copper bulls, Dunn points to declining copper grades around the world, a shortage of new mines coming on stream, and what he calls the looming \u201cpinch point,\u201d where demand will suddenly exceed supply.<\/span><\/p>\n

\u201cWhen that happens prices explode, because buyers need that pound of copper for the refrigerator or the car they\u2019re making,\u201d he says. \u201cPeople are going to make a lot of money in copper and the market is ignoring that right now.\u201d<\/span><\/p>\n

This article originally appeared in The Northern Miner.\u00a0<\/a><\/p>\n

The post Crown Mining preps Moonlight for next copper rally<\/a> appeared first on MINING.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Moonlight has nearly 1.5 billion lb. copper, the company says.<\/p>\n

The post Crown Mining preps Moonlight for next copper rally<\/a> appeared first on MINING.com<\/a>.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[828,829,404,369,428],"tags":[24,33],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1091766"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1091766"}],"version-history":[{"count":2,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1091766\/revisions"}],"predecessor-version":[{"id":1091792,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1091766\/revisions\/1091792"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1091766"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1091766"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1091766"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}