Alta Gold Co., Salt Lake City, and Magma Copper Co., Tucson, Ariz., have purchased the 12,000-acre Robinson Mining District near Ely, Nev., from Kennecott Corp. following multiparty transactions.
Magma has acquired and consolidated a 51 percent interest in the property ownership in the Robinson copper property and $10.5 million to Alta Gold and Echo Bay Inc., to acquire a 51 percent interest in the existing gold operations.The $10.5 million includes $5.5 million paid to Alta Gold for 1.67 million shares of Alta Gold stock which Magma had previously purchased and has now returned.
Alta Gold, for its 49 percent interest, paid about $2 million, having received credits for royalties totaling about $8 million paid to Kennecott from gold mining operations conducted on the property. Future development and operating activities will be conducted in a joint venture with Alta Gold.
Feasibility studies indicate potential to develop nearly 200 million tons of ore containing 0.68 percent copper and 0.012 ounces of gold per ton of ore. The deposit could yield more than 2.5 billion tons of copper and 1.2 million ounces of gold over an 18-year mining life.
The study shows that it would cost $200 million to re-establish copper mining in the district.
Dan S. Bushnell, Alta Gold chairman and chief executive officer, said the joint venture with Magma Copper is a major milestone, which will position the company for long-term growth as a diversified mining company.