Gold in the Desert: High-Grade Project Nearing Fruition in Arizona

Underneath the management of a brand new CEO, this miner expects to start out producing gold in 2020.

Situated within the fault- and gold-riddled desert lands between Phoenix and Demise Valley, Kerr Mines Inc.’s (KER:TSX; KERMF:OTC; 7AZ1:FRA) Copperstone Mine is gearing as much as recommence manufacturing in 2020, said newly appointed CEO Giulio T. Bonifacio.

As a result of it’s blessed with present infrastructure—a mill, water, energy, labs, restore store, warehouses, workplaces, tailings pond and in depth underground improvement—reinvigorating Copperstone is a low capex mission.

Copperstone’s traditionally productive high-grade gold deposit was profitably mined as an open pit in 1987 by Cyprus Minerals Company. Inside six outstanding years, Copperstone delivered greater than 500,000 ounces gold from 5.6 million tons of ore grading at zero.089 ounces per ton (ouncest) gold (three.05 grams/tonne).

Copperstone’s subsequent proprietor, American Bonanza, additional developed Copperstone with drilling, underground improvement on the base of the open pit, whereas additionally allowing the mission. This was adopted by the development of a 600-ton-per’day flotation mill. The corporate extracted 16,900 ounces of riches from ore grading at zero.104 ouncest gold (three.57 grams/tonne) throughout 2012 earlier than terminating operations in early 2013 because the gold market turned and Copperstone went quickly fallow.

Copperstone and its adjoining property was subsequently acquired by Kerr Mines in 2014 at a reduced value that didn’t mirror the numerous historic prices that approximated US$100 million, Bonifacio famous. Kerr Mine’s wholly owned Copperstone mission straddles 19.2 sq. miles (50 sq. kilometers) of floor space and mineral rights in La Paz County, Arizona. The Toronto-based firm controls the property’s 546 federal unpatented mining claims (10,920 acres) and two Arizona state mineral leases totaling 1,338 acres.

In late 2017, Kerr Mines accomplished a mixed floor and underground drilling exploration program, including 800 ft of extra underground entry. Bonifacio said the corporate plans to start out mining and processing 600 tons of ore per day at Copperstone in 2020, pending advancing detailed engineering, minor allow modifications approval and finalizing phrases of a present financing bundle with Sprott Useful resource Lending Corp.

Final yr, Kerr Mines’ Copperstone preliminary feasibility research calculated the underground Confirmed and Possible to carry 175,093 ounces at 6.79 g/t with a mine lifetime of four.5 years. In 2019, an extra 15,000-meter drill program is focused with the target of extending the estimated lifetime of the mine to eight–10 years based mostly on extracting 320,000 ounces of gold, Bonifacio famous.

“Up to now we have now solely modestly examined the Copperstone mission with exploration work masking roughly solely 10% of the mission,” Bonifacio said. “We see a pathway towards capturing multimillion-ounce potential with additional drilling and testing a number of potential targets which have been recognized.”

Kerr Mines’ proposed mining methodology is a mechanized minimize and fill utilizing rock fill and cement rock fill. Lower and fill was chosen for its flexibility in dealing with the low vein dip angles. The mission is designed to function on two 10-hour shifts; the area has an ample provide of skilled employees and is mining pleasant.

In an interview with Streetwise Experiences, Bonifacio stated, “There’s a consolation zone concerned, in that Copperstone has already produced greater than a half million ounces. The grade is excessive for underground at plus six grams. Moreover, with a number of very potential targets in hand and a land bundle that has been comparatively underexplored, there’s a robust probability that we’re sitting on a million-ounce deposit and a fairly low price to get on the deposit.”

Bonifacio defined, “The US$100 million funding by Copperstone’s earlier house owners in present infrastructure is saving us tens of hundreds of thousands in capital bills. And the mine has all of its main permits. I am fairly excited in regards to the massive land place that got here with the acquisition, which we’ll discover and develop after Copperstone goes on line.”

Bonifacio joined Kerr Mines in April from Nevada Copper, which he retired from in early 2018. Bonifacio informed Streetwise Experiences that he based Nevada Copper in 2005 and directed efforts at each stage of the corporate’s improvement, which included exploration, useful resource enlargement, feasibility research and the profitable allowing of each the underground and open-pit deposits and building on the firm’s Pumpkin Hole mission positioned in Nevada, which is scheduled to start manufacturing in This fall 2019. Bonifacio is a Chartered Skilled Accountant with 30 years of govt expertise in operations, mission finance, capital markets and mergers and acquisitions. Bonifacio has himself raised US$700 million in capital by way of fairness and mission debt financings; he has participated in additional than US$1 billion price of company transactions.

Bonifacio has put his cash the place his mouth is, too. Kerr Mines has accomplished a non-brokered personal placement providing of three,350,000 shares at a value of CA$zero.14 per unit for gross proceeds of CA$469,000. Bonifacio personally subscribed for three million shares; Peter Damouni, a Kerr director, subscribed for 350,000.

Retail traders at present maintain solely a couple of third of Kerr’s shares with administrators, insiders and household funds and workplaces holding the remainder.

Bonifacio stated, “We have got the finances readily available to proceed the research work, and we’re taking a look at lenders and our present financing bundle with Sprott Useful resource Lending to advance the mission absolutely into manufacturing. We’re additionally very excited in regards to the drilling outcomes up to now so we ideally want to additional advance our drilling efforts with an aggressive focused success pushed drill program.” Bonifacio went on to state, “We even have the perfect at school mining professionals to additional advance Copperstone, which is important to our future success.”

Is now the correct time?

“There are only a few already built-out, ready-to-go tasks like Copperstone. That’s what units us aside from the group,” Bonifacio noticed. “A bump within the gold costs is inevitable, it’s a legislation of the market—that’s the reason I put a lot of my very own pores and skin within the recreation!”

Mining funding consultants are cheering for Bonifacio and Copperstone. Technical analyst Clive Maund, analyst Siddharth Rajeev with Basic Analysis and business observer Jeff Nielson all view Kerr Mines as a worthy funding that has the potential to glow with even a modest uptick in gold costs.

The nine-member board of administrators of Kerr Mines is loaded not simply with mining operations consultants with the background to carry Copperstone to fruition, but in addition with a number of heavy weight capitalists.

Chairman Fahad Al Tamimi is a Saudi-based businessman with world funding actions. Beforehand, he was president and CEO of SaudConsult, the biggest engineering agency in Saudi Arabia, chargeable for many massive infrastructure and building tasks within the nation.

Govt vice-chairman Claudio Ciavarella, who has superior Copperstone since its acquisition, is a CPA and personal enterprise proprietor who operates worldwide companies in building and manufacturing.

Direct investor and board member Peter Damouni has over 18 years of expertise in funding banking and capital markets, with experience in mining and oil and fuel. Damouni has labored on and led fairness and debt financings valued over $5 billion.

Director Ayman Arekathas over 35 years of robust banking, finance, funding and enterprise administration expertise working with Chase Manhattan Financial institution, Merrill Lynch, Deutsche Financial institution, Investor, Abraaj Capital and Tamimi investments.


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Further Disclosures

Clive Maund doesn’t personal shares of Kerr Mines and he or his firm has not been paid by Kerr Mines.

Basic Analysis Corp: FRC and the Analyst don’t personal shares of the topic firm. Charges have been paid by KER to FRC. The aim of the charge is to subsidize the excessive prices of analysis and monitoring. FRC takes steps to make sure independence together with setting charges prematurely and using analysts who should abide by CFA Institute Code of Ethics and Requirements of Skilled Conduct. Moreover, analysts might not commerce in any safety beneath protection. Our full editorial management of all analysis, timing of launch of the experiences, and launch of legal responsibility for damaging experiences are protected contractually. To additional guarantee independence, KER has agreed to a minimal protection time period together with an preliminary report and three updates. Protection can’t be unilaterally terminated.

Jeff Nielson might or might not personal securities of Kerr Mines.

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