Wallbridge Mining (TSX: WM; US-OTC: WLBMF) is building an open-pit mine in April at its Broken Hammer copper–platinum group metal project in Sudbury, Ont., and says production should start in June. Total capex is $1 million.
The company has also signed a custom milling agreement with Northern Sun Mining (TSX: NSC; US-OTC: LBEFF) to generate a gravity concentrate and a flotation concentrate at its Redstone mill in Timmins. The concentrates produced at the Redstone mill will be sent to a nearby copper smelter.
Broken Hammer will be mined by local mining contractor William Day Construction. Wallbridge expects to extract 195,000 tonnes of in-pit copper, nickel and PGM reserves in 10 to 12 months, at a rate of 800 tonnes per day.
“This is not a company maker at this stage, it’s a small open-pit operation that can generate some cash,” Marz Kord, the company’s president and CEO, explains in an interview. “The upside for Broken Hammer is first that it generates cash that can be put back into the ground to find extensions to Broken Hammer, or into other properties that we have in Sudbury. Second, it allows us not to dilute shareholders as much during these tough economic times.”
Broken Hammer is open at depth and to the west, and is surrounded by the Wisner property package, which Wallbridge has joint-ventured with Lonmin (LSE: LMI). Under the terms of the joint-venture agreement signed in November 2013, Lonmin will spend $2 million on exploration there this year on drilling, geophysics and fieldwork. The London-based company can earn 50% of Wisner by spending $6 million over three years. It can also increase its stake by another 15% if it funds all exploration and development costs until finishing a bankable feasibility study.
Kord, a mining engineer, points out that the expected return on Broken Hammer is one-third of the company’s total market capitalization of between $15 million and $17 million, and reasons that putting Broken Hammer into production makes more sense than exploring the property by diluting its shareholders.
The company sees upside in its Sudbury exploration prospects and joint-venture partnerships.
Wallbridge owns a 8% founding stake in Duluth Metals (TSX: DM; US-OTC: DULMF), for example, which is a company it created in 2005 to explore and develop projects in Minnesota. Duluth owns 60% and Antofagasta (LSE: ANTO) 40% of the Twin Metals copper–nickel–cobalt–platinum–palladium–gold–silver project. Duluth also owns 100% of 161.87 sq. km of exploration properties adjacent to and nearby the Twin Metals project.
In addition, Wallbridge owns 40.5% of Miocene Metals (TSXV: MII), a company that it spun out in 2010 to explore and develop porphyry copper–gold–molybdenum projects in B.C.
Miocene went public in 2011 and is working on a merger with privately held Carube Resources, which has prospective properties in Jamaica, where it is exploring for copper–gold porphyry deposits.
In February Miocene and Carube Resources announced that Carube’s joint-venture partner OZ Minerals (US-OTC: OZ-MLF; ASX: OZL) — an Australian copper–gold producer — is drilling the Bellas Gate copper–gold project in Jamaica. A 2,000-metre drill program there will focus on four of the company’s 14 high-priority targets.
“We’re a junior with a lot of activities — developing projects and exploration,” Kord says.
As for Broken Hammer, ore delivery could have been earlier than June if it weren’t for half-load restrictions on the roads, which will be lifted that month. Hardly any infrastructure is needed at the site, except for resurfacing an access road and building a water-treatment pond, which should be complete within the next six to eight weeks, Kord says.
“Hopefully by next year we’ll have positive results from our exploration program, and will generate positive cash flow from Broken Hammer,” he says.
Over the last year Wallbridge has traded in a range of 4.5¢ to 12¢ per share, and 10¢ at press time. The company has just over 162 million shares outstanding.