Arizona Copper Tour: Sunnyside & Cactus
I spent the last week in America's copper state visiting some of the most promising mining projects in the state
Arizona is one of my favorite states and it also happens to be “The Copper State” - the state flag even represents its tradition of copper mining:
At the center of the flag is a large copper-colored five-pointed star. The star represents Arizona's status as the largest producer of copper in the United States, reflecting the state's rich mining heritage.
Arizona produces approximately 700,000 to 800,000 metric tons of copper annually, this represents roughly 70% of US copper production. Freeport-McMoRan’s Morenci Mine produces ~300,000 metric tonnes of copper annually, making it the largest copper mine in North America.
Besides its rich geology, Arizona has a unique location positioned between the largest state (both in terms of population and economy) and a country with a rich mining tradition, Mexico. Its geographic location gives Arizona’s mining industry multiple advantages including:
Well-developed road, rail, and air networks facilitate the transport of mined materials to smelters, refineries, and markets domestically and internationally.
Proximity to power plants and natural gas pipelines ensures a reliable energy supply for mining and processing operations.
Arizona’s location near major industrial centers in the U.S., such as California and Texas, ensures easy access to domestic markets.
Proximity to the Port of Los Angeles and other international trade hubs allows efficient export of mined materials to global markets, particularly Asia and Europe.
Access to a skilled labor pool familiar with the industry’s demands - proximity to Mexico can also mean lower cost labor.
All of this makes Arizona a top mining destination that has regularly landed it in the top 10 in the Fraser’s Institute’s Annual Survey of Mining Jurisdiction Attractiveness.
Over the years, I have visited more than a dozen mining projects in Arizona. On this trip, I added three more to my tally. On the agenda were Barksdale Resources’ Sunnyside Project (adjacent to South32’s Hermosa Mine) and Arizona Sonoran’s Cactus Porphyry Copper Project (past producer operated by ASARCO during the 1970s and early 1980s).
A couple weeks ago, Barksdale Resources (TSX-V:BRO) was featured on my 2024 Tax Loss Silly Season Shopping List, so it was a real treat to be able to visit Sunnyside while it was fresh in my mind.
The important thing to understand about the Patagonia area of Arizona is that to call it geologically rich would be a gross understatement. Mother Nature delivered a series of porphyry centers in a trend that extends from Mexico northwest into Arizona:
The Patagonia Mountains are located 65 miles south of Tucson, Arizona along the northwest-trending belt of porphyry copper deposits extending from Sonora, Mexico to the Sacaton deposit in central Arizona. Sunnyside sits right on the US side of the border, adjacent to South32’s 153 million tonne Hermosa CRD deposit that grades 3.53% zinc, 3.83% lead, and 77 g/t silver. I discussed Barksdale in some detail both in my Tax Loss Season Article, and the complementary video.
The drill was turning at hole SUN24-002B at the time of my visit and VP of Exploration Alan Roberts was in the zone. Roberts is a drilling expert who holds a Master of Science degree from the Royal School of Mines. He has more than 30 years of experience working as a geologist across the world, with a particular focus in the western USA.
Roberts’ attention to detail was evident from the cleanliness of the company’s core shack as well as the drill pad. I came away from the visit impressed, but also very cognizant of the challenges of deep drilling in a higher cost jurisdiction.
The South32 office in the town of Patagonia.
The view of the drill rig from up the road. Alan Roberts at far left and Barksdale VP of Communications Terri Anne Welyki at right.
It was a sunny day at Sunnyside.
Looking at South32’s Hermosa Project from Barksdale’s property.
Yours truly inspecting some high-grade copper bearing drill core that was announced in this recent news release.
I was encouraged to read Barksdale’s news release this morning announcing a 10-meter intersection of copper-dominant semi-massive sulfides in hole SUN24-002B:
Mineralization within altered volcanic and carbonate lithologies from 1,265 to 1,358m (4,150ft to 4,455ft) is comprised of intervals of semi-massive to stockwork textured sulfide mineralization containing up to 50% sulfide composed of coarse grained, chalcopyrite and galena with accessory sphalerite and chalcocite.
As of the date of this morning’s press release, drilling is progressing at 1,370 meters. Barksdale's geologic model projects additional targeted zones of mineralization deeper in the carbonate section:
I am long BRO shares at the time of this writing and looking forward to further drill program updates and assays for hole SUN24-002B.
Later in the week, I visited the Cactus Mine owned by Arizona Sonoran Copper (TSX:ASCU). Cactus was formerly known as the Sacaton Mine, and it represents the northern extension of the same porphyry trend that Sunnyside sits on.
The existing open pit at Cactus that was mined by ASARCO in the 1970s and 80s. The vast majority of copper mineralization at Cactus is expected to be extracted via open-pit mining methods.
Once in production, Arizona Sonoran anticipates that Cactus will produce an average of 172 million pounds of copper cathodes annually, processed onsite by heap leach and SXEW.
The infrastructure and scale of the copper mineralization at Cactus are impressive. The infrastructure advantages at Cactus are numerous - current and nearby infrastructure includes:
Onsite administration buildings, geology, core storage, completed earthworks, substation, parking lot and access roads
Clean power via onsite substation for $0.07/kWh
Paved access roads and easy access to interstate highways I-8 and I-10
Union Pacific railroad line adjacent to the property
Casa Grande, Maricopa and Phoenix are all located nearby to supply materials/consumables in addition to a skilled labour pool
Permitted water available onsite, and additional water may be available through the city
Flat land and low altitude
Located within the City of Casa Grande industrial park
Alison Dwoskin, Arizona Sonoran Director of Investor Relations.
With an overall life of mine grade of 0.41% copper it will be paramount to get the metallurgy and ore sequencing dialed in to optimize economics. Cactus is expected to produce copper cathodes onsite via heap leach and SXEW. To date, metallurgical programs show the metallurgy is clean and reacts in line with other Arizona oxide and enriched leaching operations. In addition, Arizona Sonoran has partnered with Rio Tinto’s Nuton subsidiary. Nuton’s heap leaching technologies may help Cactus solve primary leaching. Overall the company’s plan is to advance towards copper production in the USA, pending construction decision.
Arizona Sonoran plans to produce a prefeasibility study in early 2H 2025, with first production envisioned in 2029.
The Parks/Salyer deposit and Cactus deposits (633 million tons grading 0.58% total copper Measured and Indicated, and Inferred resources of 474 million tons grading 0.41% total copper) are the up-dip extension of Ivanhoe Electric’s adjacent Santa Cruz Deposit. Santa Cruz hosts an indicated resource totaling 226.7 million tonnes grading 1.24% total copper (2.8 million tonnes of contained copper), and Inferred Resources totaling 149.0 million tonnes grading 1.24% total copper (1.8 million tonnes of contained copper).
Santa Cruz sits across the Maricopa Highway to the southwest of Cactus. Mineralization at Parks/Salyer and Cactus is significantly shallower than at Santa Cruz (mineralization begins at just over 1,000 meters depth at Santa Cruz):
Cactus sits on 6,000 acres of private land and Arizona Sonoran expects to have all permits in place by the end of 2026.
Recent third party polling of Casa Grande, Arizona area residents indicated that 87% of the community supports the Cactus Mine moving into production. A full production scenario at Cactus will potentially generate billions of pounds of copper over the mine life, bringing billions of dollars to the economy, in addition to several hundred high-paying jobs in Pinal County, Arizona. Cactus is a very high-quality US copper asset and I am eager to see how this area of Arizona unfolds.
Disclosure: Author owns shares of Barksdale Resources at the time of publishing and may choose to buy or sell at any time without notice.
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