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Andover Ventures Sets Sights on Production
By James West
MidasLetter.com
Monday, July 13th, 2009
Andover Ventures (TSX.V:AOX) is on the fast-track to production on the very large and prolific East Tintic mining district in central Utah, as mining friendly a state as Nevada if not more so. Historic production for the region includes 2.3 million ounces of gold, 250 million ounces of silver, 250 million pounds of copper, and 2.2 billion pounds of lead.
Andover's holdings encompass 5 major deposits including the past-producing Trixie Mine, which comes complete with a 250 tonne per day turn-key mine and mill, the start-up of which will usher in the era of production for Andover. At the same time, the company will focus on developing resources through exploration from other deposits to keep the mill running and potentially scale operations upward in a big way.
According to Andover CEO Gordon Blankstein, "The project has been held by the same company, Chief Consolidated Mining, for over 92 years. It's in excess of 16,000 acres, which I believe makes the company not only a very significant land holder in the State of Utah, but the third largest land holder in the State. Its been tied up in legal battles for the last 9 months, and so now we're through that and we're going to put the property back into production."
Phase 1 - The Trixie Mine
The Trixie Mine was last mined and operated in 2002, during these operations Chief used and utilized grading procedures standard in the mining industry, however Chief an American company was not subjected to or up to Canadian National Instrument 43-101 standards. That said, on May 15, 2000 Chief announced in a report that the ore body discovered at that time contained approximately 70,546 tons of indicated ore at an average grade of three quarters of an ounce of gold and five ounces of silver per ton. The contained gold and silver int his initial indicated tonnage estimate equates to 52,808 ounces of gold and 351,539 ounces of silver.
Blankstein said, "Our approach is kind of a two-phase approach. One is that in 2001, the Trixie mine was put into production by Chief, and they totally refurbished a 250 tpd mill that was there. The floatation cells the filter presses and the circuits presses are all band new, and they only produced for about 4 months."
"They were recovering about .72 ounces of gold per ton through the floatation circuits, but at that time were not utilizing the newly commissioned cyanide circuits! So we should be able to up that production. The quickest way to do it is by processing some surface material that was mined but not milled, and we're permitted and bonded and basically ready to go. We'll start off producing from the Trixie, and then we're going to upgrade our feasibility study on the Burgin Extension which is a very high grade silver lead zinc deposit that runs about 18 ounces silver per ton and 25% lead-zinc."
"There have been two feasibility studies completed on that - one by Mine Development Associates and the other by, Pincock Allan Holt, but they were both done pre-NI 43-101. The last one was done in 2001 but because it was done for a U.S. corporation it didn't adhere to the standards of the Canadian Instrument, so we'll get that updated and then move forward into water permitting and get that into production. At the same time we will do a confirmation drilling program on the district - we'll do some on the Trixie and some on the Burgin - so there'll be drilling, plus near-term production, plus movement on what I call my big elephant, which is the Burgin Extension."
The Big Elephant - The Burgin Extension
The Burgin Mine is characterized by silver grades running as high as 22.5 ounces per ton according to non-43-101 compliant resource estimates. Gold grades within the system range from less than 2 grams per ton up to just under one ounce per ton in some sections.
Within that mineralization are zinc grades as high as 7.8% and lead up to 20%. Andover will conduct confirmation drilling throughout 2009 and 2010 to put the known mineralized resources into a 43-101 compliant category in support of an updated feasibility study.
As to the timeline for all this good news?
"I've been saying publicly that we'll be back into production within a year," says Blankstein. "We've spent a lot of time working in the mill - we have to do some shaft cable x-raying, and rewiring in the hoist building and maybe some re-timbering in the shafts, though we've had crews down to the ore faces, so one year I'm comfortable saying - it gives us lots of time - but we should be able to get there before that."
When asked what makes today's share price attractive for potential investors in the company, Blankstein said, "We own all the surface rights to the land as well as the underground rights, and I think the surface rights are worth more than the market cap of the company. Secondly, the mill and plant are essentially brand new in 2001 with five months worth of operation, so at this point we've got a facility that in itself is also worth more than the market cap of the company, so those are a couple of financial factors that change the value outlook for the company substantially."
If that were all Andover had going for it, the company would appear to be well on the way towards a profitable future of mining in Utah. But Utah is only the near term source of revenue for the company. It also has a very large VMS project in Alaska.
Sun VMS Project - Brooks Range, Alaska
Gordon Blankstein's view of the project near Red Dog, Alaska was succinct and to the point.
"The Sun Vulcanogenic Massive Sulphide deposit was discovered in the mid-1970's which casued a staking rush among major mining companies at time such as Noranda, Kennecott, Cominco and so on, and the district today is well known. The largest undeveloped VMS deposit in the world according to Mine Metal Economics Group is the one that's contiguous with the Sun that is owned by Rio Tinto through Kennecott called the Arctic deposit.
Teck also has a deposit there called the Smucker, and Nana Corporation has a deposit there called the Bornite.
"We did an extensive drill program a little over a year ago and we're in the process of getting data assimilated and updated, but we're probably the fifth or sixth largest undeveloped VMS deposit on the planet. Anaconda did a pre-feasibility study including metallurgical work back in 1980, and they estimated 20 million
tonnes in the Sun deposit of about 2.39 to 2.37 opt silver, 1.9% copper, 1.2 % lead and 4.5% zinc. They didn't really assay for or were looking for gold, but we did on our program last year and we were seeing grades of 1.1 to 1.2 grams per tonne, so its very rich rock with large potential upside."
"We're not going to spend a lot of money on it this year because we're focusing on getting the Utah operation into a cash flow generating scenario, but it's a very significant asset that will provide value to our shareholders down the road. At today's prices there are in excess of $4 billion worth of ore identified by Anaconda."
Learn more about Andover's projects and follow their progress online at www.AndoverVentures.com.
SOURCE: http://www.midasletter.com/news/09071301_Andover-ventures-set-sights-on-production.php
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