Journey To The American West Part II: Arizona Copper Country
Two weeks ago I traveled to the heart of the American copper mining industry
Two weeks ago, I had the opportunity to visit the Arizona Copper Belt and Prismo Metals’ Hot Breccia Project. The visit was eye opening and I had the opportunity to see some of the largest copper mining operations in the United States. Before we delve into Hot Breccia, I would like to begin by setting the stage.
The western United States has a rich mining history dating back more than 150 years (The Mining Act of 1872 is still federal law today). However, there are only a few states that continue the West’s mining legacy today. Among them are Arizona and Nevada, the two premier mining jurisdictions in the USA. In particular, Arizona is arguably the most important mining state due to being responsible for ~70% of US annual copper production.
Mining majors such as Freeport McMoRan (NYSE:FCX), Rio Tinto (NYSE:RIO), BHP (NYSE:BHP), and Grupo Mexico (ASARCO) are all active across the state of Arizona. The Arizona Copper Belt refers to a region in Arizona known for its rich deposits of copper and other minerals. This belt has played a significant role in the history and economy of the state, with mining being a major industry since the late 19th century. The region extends through several counties, including Pinal, Gila, and Greenlee, and contains some of the most significant copper mines in the United States.
Key Points about the Arizona Copper Belt:
Historical Significance:
Copper mining in Arizona began in the mid-19th century, but it wasn't until the 1870s and 1880s that the industry really took off.
Arizona's copper industry boomed in the early 20th century, making it one of the largest copper producers in the world.
Geological Characteristics:
The Copper Belt is part of the Basin and Range Province, characterized by mountain ranges separated by down-dropped valleys.
The region is known for porphyry copper deposits, which are large, low-grade, but economically significant.
Major Mines:
Morenci Mine: One of the largest copper mines in the world, located in Greenlee County. Operated by Freeport-McMoRan, it has been in production since the late 19th century.
Ray Mine: Located in Pinal County, this open-pit mine is operated by Asarco, a subsidiary of Grupo Mexico and has been a major contributor to Arizona's copper production.
Bagdad Mine: Another significant mine in Yavapai County, known for both copper and molybdenum production.
Economic Impact:
The copper industry has been a major economic driver for Arizona, contributing to the state's development and providing jobs for thousands of people.
Despite fluctuations in copper prices and changes in the industry, mining remains a critical part of Arizona's economy.
A development stage project located in the Arizona Copper Belt stands to contribute roughly 25% of US copper production once it enters operation. The Resolution Project is the most recent discovery, a giant project currently being operated under a joint venture between Rio Tinto and BHP and located just outside of the town of Superior, Arizona. Resolution will be an underground mining operation with a 1.8 billion ton reserve grading 1.53% copper, making it the highest grade operation in the region and one of the largest copper deposits in North America.
It is estimated that the 64 billion pound copper mining project will have a life of mine of more than fifty years and produce 25% of projected US copper demand. Rio Tinto and BHP are so committed to Resolution that they have spent more than 20 years and $2 billion to advance the project to the final step of federal environmental permitting.
Prismo Metals (CSE:PRIZ, OTC:PMOMF) is preparing for its maiden drill program at its Hot Breccia copper project in Southern Arizona. The company recently received permit approval from the Bureau of Land Management for ten drill pads and the final preparations are being made for the commencement of a 5,000 meter diamond drill program.
Hot Breccia is located in Pinal County, Arizona within 3 kilometers of the Hayden Smelter, and on trend of both Resolution and the Ray Mine. Both Hayden and Ray are owned and operated by ASARCO (subsidiary of Mexican mining giant Grupo Mexico).
Another unique feature of the Arizona Copper Belt is the presence of two (Hayden and Miami) of only three copper smelters located within the United States. The third smelter is Rio Tinto’s Kennecott Smelter in Utah.
To be clear, Pinal County is copper country, an area of Arizona in which mining is an integral part of people’s lives and livelihood. Given its close proximity to the formerly producing Christmas Mine, Hot Breccia’s location is especially intriguing. Christmas was one of the first mines to begin producing copper in the region, it operated for more than 75 years before being shuttered in 1982 due to a combination of falling head grades and soft copper prices.
In its first decades, Christmas consistently produced high-grade copper ore with grades of 2%+ Cu due to ore sorting by hand. At Christmas, the Naco Limestone unit daylights at surface, and the Escabrosa Limestone interacts with the Christmas Stock (Granodiorite Porphyry) below.
Oxidation of primary sulfides in the skarn and intrusive lithologies at Christmas produced an oxide assemblage, which includes chrysocolla, cuprite, tenorite, malachite, azurite, dioptase, brochantite, and chalcanthite. Primary Chalcocite mineralization can be locally significant along some fracture zones. Adjacent to the Christmas Stock, primary sulfide mineralization in the Williamson Canyon Volcanics has been oxidized to iron oxides with minor amounts of cuprite, malachite and native copper.
The limestone hosting much of the ore and exposed at surface at Christmas is the same limestone that sits at depth at Prismo Metals’ nearby Hot Breccia Project. It is believed that the Williamson Canyon volcanic unit covered the limestones throughout the area. It is thick in the Christmas / Hot Breccia area and gets thinner to the west. Perhaps most notably, the extensional faulting that dropped down the Hot Breccia block resulted in erosion of the volcanics, and exposed the lower stratigraphy at Christmas, while preserving it at Hot Breccia.
Kennecott, a subsidiary of Rio Tinto (NYSE:RIO), drilled seven holes at Hot Breccia between 1972 and 1981. Within the ‘upper plate’ Williamson Canyon Volcanics the intensity of hydrothermal alteration increases at depth. While Prismo is missing much of the key drill log information from historical drilling at Hot Breccia, two of Kennecott’s deeper holes (OCC-7 and OCC-8) intercepted significant intervals of high-grade copper:
OCC-7: 60’ (18.3 meters) with 1.4% Cu, 4.65% Zn at 2,900’
OCC-8: 25’ *(7.62 meters) with 1.73% Cu and 0.11% Zn at 2,305’ and 15’ (5 meters) with 1.4% Cu and 0.88% Zn at 2,350’
Prismo conducted a ZTEM survey at Hot Breccia in 2023. ZTEM is particularly effective at identifying buried conductive targets that offer little or no surface expression. The ZTEM at Hot Breccia identified a priority conductive anomaly at depth that appears to be related to a dike swarm with associated polymictic breccia. The conductive body identified by the ZTEM survey is located in roughly the same depths as the limestone units - limestones should not present a conductivity signature unless they have been altered and host sulfide mineralization.
In theory, the Hot Breccia target zone (conductivity anomaly in purple above) has dimensions of 2,000 meters x 1,000 meters x 500 meters - Prismo’s core holes should begin reaching the target zones at roughly 400+ meters downhole.
UPDATE: Prismo Metals Acquires Data and Updates Model for Hot Breccia Copper Project in Arizona
Steve Robertson, Prismo Metals President, commented “We take a very thorough, scientific approach to exploration, using all information that we can gather to inform our modelling. This includes data produced and interpreted by previous generations, often by very talented geologists. We view the acquisition of the 1970’s data as equally important as fresh data and interpretation. This will have a strong influence on our exploration program in 2024.
With this new data incorporated, our Computing & Artificial Intelligence partners at ExploreTech in California (see Prismo’s news release dated March 4th, 2024) have completed the preparation phase for the probabilistic ZTEM inversion and drilling optimization. The computation phase has commenced, and it is expected that this inversion and target processing will take approximately 7 to 10 days on ExploreTech’s high-performance computing system.”
On my visit to Hot Breccia last month, I was able to verify that the project location and pedigree checks many boxes:
✅Pro-mining region of Arizona with multiple operating mines
✅Favorable geological setting with strong analogs to nearby Christmas Mine (402 million tonnes @ .39% Cu) and Resolution Deposit (1.8 billion tonnes @ 1.5% Cu)
✅Dry climate (better suited for dry stack tailings and less prone to have slides of waste material or ore piles)
✅Skilled labor force and large population centers within driving distance (90 minutes from Phoenix and 2 hours from Tucson)
✅The Hot Breccia property has no people living on it and there are large areas of relatively flat topography
✅BLM Claims with straightforward permitting process
When I spoke with Dr. Linus Keating, he recounted the story of how Hot Breccia had bothered him for three decades. He and his team of geologists had tried to “kill” the project many times, but with each additional piece of data the geological thesis only became more compelling. Hot Breccia is truly one of those drill targets that simply must get drilled. One way or another the Truth Machine will reveal the Earth’s secrets that have been sealed beneath a thick layer of volcanic rocks for more than 100 million years.
In the side-by-side on the way out to Hot Breccia
The namesake breccias exposed near areas of past drilling are copper and gold mineralized. These breccias contain fragments of mineralized rocks that have been brought up from depth in a quartz porphyry intrusion. In addition, there are multiple other types of mineralization present in outcrop at surface including:
Magnetite skarn with oxide copper minerals
Garnet skarn, gossanous material
Limestone, marble, quartzite
Breccia pipe cutting up through volcanic cover
1%+ copper grades in outcrop
Dr. Linus Keating on high-grade copper skarn mineralization:
"...so we have the advantage at Hot Breccia of being able to see these breccia pipes that have come up from significant depths, and they show us on the surface that deep down, we have these bodies of skarn. Skarn develops around the edges of an intrusive in the limestones, and skarn is a major producer of high-grade copper in southern Arizona. Skarn is responsible for the high grades at South32 Hermosa property. It's responsible for the high grades at the Christmas Mine, just a couple miles northwest of us, and we have these same rocks, these same host rocks here underneath Hot Breccia, underneath this pile of Cretaceous volcanics."
Prismo has a drilling contractor lined up and intends to commence a 5-hole 5,000 meter diamond drill program in the next 4-6 weeks. Management, founders, and advisors hold 28.6% of Prismo’s outstanding shares - CEO Alain Lambert has been a consistent accumulator of PRIZ shares on the open market, purchasing more than 200,000 shares of his company since the beginning of June:
I have purchased Prismo shares on the open market and for better or worse I am committed to holding until I see the results of the maiden drill program at Hot Breccia.
Disclosure: Prismo Metals Inc. is a sponsor of Goldfinger Capital so some information could be considered biased.
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