Good plug from Barry, Parsons looks to repeat Bellevue success...

Good plug from Barry,
Parsons looks to repeat Bellevue success with AuTECO purchase of Canadian copper-gold project

By Barry FitzGerald  Plus, Beament’s Develop tables more cracking hits from its Woodlawn zinc-copper asset ahead of a resource update and Meteoric gets pulses racing with latest rare earths results.

The magic mix of high-grade copper and gold that volcanogenic massive sulphide (VMS) deposits can deliver gives them a special place in the hearts and minds of miners.
It was the now mined-out DeGrussa VMS deposit in Western Australia’s Bryah Basin that earned billions for Sandfire (SFR) and its shareholders, underwriting as it did the company’s subsequent growth into larger-scale production Spain and Botswanna.
Add in the expectation by BHP and others that copper will take off big time in the second half of the decade, and Citi’s expectation that the gold price will again have a “2” in front of it before long, and a VMS project is a nice thing to have.
It’s just what AuTECO (AUT) has landed with its $65 million pick-up ($50m upfront and staged payments to follow) of the Green Bay copper-gold project on the Baie Verte peninsula in mining-friendly Newfoundland, Canada.
AuTECO’s main go up until now has been growing the high grade (7.9g/t) gold resource at its Pickle Crow gold deposit in Ontario to 2.8M ounces.
It will come into its own before long. Prior to the Green Bay pick-up, Pickle Crow more or less justified the company’s $74 million market cap (at a last sale price of 3.2c before a $53m equity funding package for Green Bay at 2.5c a share).
But the upside at Green Bay is game-changing stuff, so much so that the board and management are kicking $5m of their own money into the equity financing for the deal.
Perhaps a better demonstration of the excitement level around Green Bay is that Steve Parsons – the geologist who founded the now $1.67 billion Bellevue Gold (BGL) – is coming out of the NED retirement village to become AuTECO’s managing director.
His success at Bellevue was achieved through the drill bit, taking what most thought was a depleted deposit to a high-grade 3 million ounce lode system, with first production planned in the December quarter of this year.
Parsons’ plan for Green Bay is much the same except this time he is starting out with an already-sizeable resource of 39.2Mt at 2.1% copper equivalent for 811,000t of copper equivalent, most of it in the higher measured and indicated categories.
Now it has to be said that Green Bay was mothballed earlier this year when its previous owner, the AIM-listed Rambler Mining, was put into administration for a whole host of reasons. Essentially though, it was under-capitalised and under-sized.
No mine is on song when the workers are worried about their next pay cheque, and when they are asked to operate crappy equipment, take short-cuts on maintenance, and to keep up ore supply to the mill without a corresponding investment in mine development.
Parsons has no intention of turning the mine back on in a hurry. Instead, he has mapped out a plan over coming years to resolve the past issues, and by making Green Bay bigger and better than it was by growing the resource, all leveraged off an existing $250m infrastructure base supporting the underground operation.
“This all about creating value with the drill bit. It is not about us turning the mine back on. It is about us demonstrating that this mine is of world class standard,” Parsons said after leaving the NED retirement village.
‘’We are starting out with an already large-scale resource. It is about growing the resource and we expect to hopefully double if not triple that over the next 18-24 months.
“From there we would be hoping to demonstrate the mine can be upscaled to a much larger operation in the realm of 2mpta-3mtpa, or perhaps 4mtpa, which would make us a much larger copper producer.”
That points to a potential 40,000t-plus copper equivalent future. Should Parsons repeat his Bellevue success at Green Bay, AuTECO would help fill the current mid-tier copper producer void on the ASX, just as the take-off in copper BHP points to is around the corner.
AuTECO won’t be messing around. Drill rigs are due to roll up to Green Bay this month, and work will begin on a 700m exploration drive to provide underground drilling platforms to grow the resource updip (an open cut emerging is a possibility) and down plunge. The drive will eventually become part of the haulage system at the mine.
On the down plunge potential, previous exploration hits of 22.6m at 4.4% copper and 102m at 1.7% outside of the existing orebody go to Parson’s excitement over the remaking of Green Bay.