JABA Inc. PLEASED TO ADVANCE 4 BILLION POUND COPPER PROJECT
JABA's July 24 announcement of completion of a letter of intent that finally places its Southeastern Arizona (SEAZ) project in position for production of copper continues to excite the company and its shareholders. The Property area has long been coveted and advanced by several large would-be developers, so many that no consolidation or agreement has heretofore been possible. Through the 1980s and 1990s, however, personnel of Delta Exploration LLC persevered, acquiring a parcel here and a tract there toward ultimate assembly of a workable land position.
Further and CRUCIALLY, the property had been thought of and advanced as a conventional open pit sulfide copper mine, against which low sulfide-copper grade, scenic, and logistic-cost concerns mitigated.
Scores of drill holes through the oxide- chrysocolla zone to reach the sulfides reported then sub-economic sulfide copper grades --- but little heed was paid to the oxide copper, for which no economic extractive methodology had been perfected. Now only in the late 1990s, following research at Santa Cruz, Copper Creek, and San Manuel, in situ leaching - SX-EW as a process has been accredited just as the property position was secured. JABA is full well aware that the SEAZ Project might not be 'permittable' as a conventional open pit mine, either environmentally or economically - but it is a prime, reasonable, certifiable candidate for ISL--SX-EW, and we have excellent reason to assure our investors that it can and will be appropriately permitted.
The property has known no prior production simply because the land
consolidation had not been assembled and because the technology of ISL--SX-EW had not been established. Both have now been achieved.
Several investors have been concerned with potential permitting problems, rightly so in the present US climate of anti-mining conservation and environmentalism. JABA's stand here we think is realistic. JABA separates possible objections to the SEAZ Project into the two areas of (1) Surface Impact (objections to visibility of roads, well heads, pipelines, the SX-EW plant site, and general scenic impairment), and (2) Leachant Loss (the hypothetical possibility that loss of down-hole leaching agents by leakage from the oxide ore areas will be expensive and potentially damaging to aquifers).
Surface impact can and is to be kept to absolute minimums. All roads and structures, including the plant site, will be placed in low areas out of view. Many drill roads that are already there will be landscaped away. With the exception of the plant building, virtually all surface disturbance can be landscaped away once the well-field and distribution piping is installed and buried. JABA's installations will be unnoticeable among the high tension lines, and roads already on and near the property. In short, JABA is confident that the visual and environmental impact on the surface can be kept inoffensively minimal, and will work with environmental planners to assure that the impact is insignificant.
Hypothetical leachant loss will be self-sealing and thus self correcting. As in most skarn systems, the general geology is one of an igneous rock core, a band of contact with limestones that became the skarn zones (a combination of silica (quartz) combined with limestone to form hard, brittle, non-reactive calcium silicate minerals mineralized with copper, zinc, silver, etc.), and then a regional lateral continuation of unaffected limestone strata. The igneous rocks are impermeable, and no leach solution loss can take place. The skarn zones are brittle, and natural geologic processes have cracked and broken them -- they are therefore naturally permeable to the leach solutions. The laterally-encasing limestones are more plastic and self-sealing, and they also will naturally react with the sulfate ions in the leach solution to form gypsum (calcium sulfate also known as plaster of paris) sealants wherever fractures might occur. No fluid loss via natural permeabilities is thus possible. Also, the science and hydraulic engineering of injection and recovery well-fields has been developed to astoundingly successful degrees in hot-water petroleum, salt, and sulfur extraction technologies elsewhere in the US and abroad. JABA's injection and extraction wells would be laid out to conform rigorously to such engineering practice to ensure no loss of fluids for purely economic reasons in addition to the environmental considerations.
Finally, geohydrologic evaluation indicates that natural surface runoff and groundwater drainage and flow is in the direction of a series of massive buried limestone ridges and hills and a saline dry lake, not toward any riparian or faunal-floral preserve. Even in the geologically and technologically highly unlikely event that some leakage might occur, distances measured in miles and neutralizing limestone rock would snuff any hypothetically harmful aquifer effects. JABA is thus totally confident that the technology is permittable at SEAZ, as past permitting success (at our Southern Zone) before the technology had even been perfected attests.
Another common shareholder query has focused upon economics and profit
to JABA and its investors. Elsewhere, we have described the parameters of conventional open pit mining and standard extractive processing, of heap leaching, and of in situ leaching procedures. Standard mining generates per-pound-copper costs of from 75 to 90 US cents, depending on haul distances, grade, power and labor costs, etc. Heap leaching, where the material to be leached is mined, hauled, and arrayed on leach pads, is cheaper but still fairly costly at 30 to 70 cents, again largely dependent on mining and hauling costs. Collahuasi, El Abra, and Radomiro Tomic in Chile and North Silver Bell, Arizona, are four of many new mining projects using this technology. 'All-in' costs at Radomiro Tomic are projected at less than 40 cents a pound, (March 1998 Engineering and Mining Journal, page 31) and comparative costs suggest that JABA's SEAZ Project SX-EW plant might be capitalized at only $13 to $20 million. As noted in our original news release (July 24, 1998),several projects have used and demonstrated the feasibility of ISL-SX-EW, and several others such as BHP's Florence Project have approved it. JABA predicts 40-cent all-in costs at SEAZ, although we will carry our projections at a conservative 50 cents. The economics are excellent because:
- No mining of rock, and thus no rock-hauling expenses or capital equipment are involved.
- No waste heaps or holes-in-the-ground will be left.
- No significant surface effects need be mitigated.
- There are no milling or smelting costs - EW product is
wire-grade 99.999% copper.
- Drilling technology has been perfected, and injection-recovery
procedures are established.
- Reagents - be they dilute sulfuric acid- or ammonia water-based
- are cheap and locally available.
- Electric power, railroad and highway transport, and water are
already on the property.
- Skilled labor, drill contractors, etc., are in the immediate
area, which has a mining history and no camp site or - town site is
required.
Although our news release of July 24, 1998 referenced 450 million tons
grading 0.39% oxide copper, the SEAZ project has a core of high grade
material currently estimated to contain about 2 billion pounds copper
averaging about 1% or more. It is JABA's intention to selectively leach this core for the first 20 years of production.
By James A. Briscoe, C.E.O.
--
Mardee S. Briscoe
Vice President/Business Mgr.
JABA (US) Inc.
2766 N. Country Club Rd.
Tucson, AZ 85716
(520)327-7440 voice
(520)327-7450 fax
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