Risky venture: Copper mining in Milford brimming with high hopes, fears of failure
'Potential payoff is huge' if mineral can be extracted, investors believe
Dotson promised the mill would process 2,500 tons a day. He claimed the value of the copper and silver would exceed $1.2 billion within in five years, yielding revenues of $103 million annually.
Just this month, the SEC weighed in with a complaint against Dotson and his PR man, Wilford Blum, for allegedly grossly inflating those grandiose projections in press releases and public statements.
But that was long after many Milford residents bought into the hype. No one knows how many invested, but "probably more than I think," Sherwood said.
"A couple invested all they had in it," he said. "But that's small town rumor."
Gary Smith, who grew up in the town, put money into Copper King, as did some of his family members. Smith recalls the days of nice homes, manicured yards and stores on Main Street. Downtown has since dwindled to mostly empty storefronts. Houses have fallen into disrepair.
"I saw this as a real opportunity for that town to change overnight," said Smith, who lives in Centerville and visits Milford often.
But in little more than a year, Copper King Mining went bankrupt having pulled little copper from the ground.
"Their process didn't work," said Tom Munson, a lead inspector with the Utah Division of Oil, Gas and Mining. "(Dotson) thought he had the process all figured out, but he never really did. He wouldn't let anyone tell him anything. I think that was their real downfall."
Copper King's board of directors ousted Dotson just before the company filed Chapter 11 bankruptcy in May 2010.
Enter John Bryan, a wealthy financial adviser who specializes in turning insolvent businesses around and hobnobbing with the rich and famous. The Copper King board appointed Bryan to replace Dotson.
In the early ′90s,90s, he advised the Duke and Duchess of York, Prince Andrew and his then-wife, Sarah Ferguson.
"He's absolutely brill about money," the Duchess cooed, according to Kitty Kelley's "The Royals," an unauthorized biography. "Really, really brill."
That fawning apparently led to a rather public dalliance. A paparazzo snapped photos of Bryan kissing Fergie's toes while she sunbathed topless outside an Italian villa.
Bryan is now married to a Belgian model/musician and runs Copper King out of his Los Angeles office. He has obtained $15 million in financing to pay off the secured creditors and is working on a reorganization plan.
"I think this can be a big success," he said. "We believe the copper resources here are substantial."
Unlike his predecessor, though, Bryan is careful not to inflate the claim, saying it needs further study.
"We cannot have any exaggeration of any data ever again. That's an absolute must for the business going forward," he said.
Thousands of shareholders across the country will have something to say about how Copper King Mining moves forward. The committee they formed, led by San Antonio businessman Chuck Dawson, has gained rare standing in U.S. Bankruptcy Court in Utah.
The group isn't enamored with Bryan and will proffer its own plan to get the mine on its feet. It lists on its website many of Bryan's glamorous but sometimes unflattering escapades.
"We haven't found any evidence he's done a damn thing," said Wright, the Florida investor who owns 12 million shares of stock that at last glance were worth less than a third of a penny per share.
Dawson and Lee Abbot, the new board chairman, fear shareholders as unsecured creditors, including some mom-and-pop Milford businesses that provided services to Copper King, will be cut out of the deal.
One of them is 82-year-old Wayne C. Wiseman who owns the Chevron station. The company owes Wiseman $82,000. He depleted his savings to cover the debt. He said he'd be happy to get half his money back, but doubts he'll see any of it.
"We want to do everything we can to see that everyone gets a fair shake out of this," Dawson said.
But, he admits, his motives aren't totally altruistic.
Dawson has led the effort to employ geologists, metallurgists and engineers to thoroughly study the land's complex mineralogy, which he said should have been done from the beginning. Like everyone else, Dawson sees the opportunity to make a lot of money.
"This is a risky venture. This is by no means a sure thing," he said. "But the potential payoff is huge."
Abbott, the former chief financial officer at Western Utah Copper who resigned just before the merger with Copper King, said a geologist told him the mine could be 10 times the size of the Kennecott's open pit Bingham Canyon Mine, which at 18.7 million tons has produced more copper than any mine in history.
"There's potentially trillions of dollars down there if this thing is mined for 300 or 400 years," he said.said. "Despite all of our studies we cannot say with a high degree of confidence that any of the deposits can be mined profitably."
Abbott's optimistic guess is that it could be operating as early as 2015.
"I'd be tickled to death," said Sherwood of that possibility.
Though it wouldn't change Milford's middle-of-nowhere locale, it could become a going-somewhere town once again.
Email: firstname.lastname@example.org. Twitter: dennisromboy
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