Southern re-starts Oracle Ridge

Following a 10-week shutdown, the Oracle Ridge copper mine in southwestern Arizona is back in production.

Southern Copper (VSE), which owns 70% of the mine, has expanded mill capacity to 1,000 from 750 tons per day. (The shutdown enabled underground operators to advance development ahead of stopes, so as to match expanded production.)

Proven and probable reserves are estimated at 7 million tons grading 2% copper.

President Peter Guest said the mine should be able to break even at current copper prices. Cash costs are estimated at US68 cents per lb., based on an average grade of 2% copper and recoveries of about 90%.

Recoveries are averaging about 92% and head grades are running at 2.1% copper. Guest noted that a renegotiation of the company’s smelter contract was instrumental in reducing costs. Smelter charges are about US22 cents per lb. compared with the previous level of US30 cents.

Copper production is expected to average 1 million lb. per month. Southern Copper has about $300,000 in working capital and 36 million shares outstanding. It is free of debt.