Key Highlights
- Kerr Mines Inc. (“company”, “Kerr”) recently appointed Giulio T. Bonifacio as the CEO. Mr. Bonifacio was the Founder / President of Nevada Copper (TSX: NCU / peak market capitalization of over $500 million) since its inception in 2005, until his retirement in 2018. Nevada Copper’s is advancing its Pumpkin Hollow copper project to production this quarter, having invested over US$600 million to date.
- Kerr is targeting to commence production at the Copperstone project in Western Arizona by Q4-2020.
- We believe a 5,000 m Phase I drill program in 2019, on the main Copperstone zone, not only demonstrated high grades (including 16.8 m at 40 g/t gold), but also potential for further increase in tonnage. The most recent resource estimate on the project, calculated in 2018, showed a measured and indicated resource of 0.28 Moz at 7.63 gpt gold, and an inferred resource of 0.15 Moz at 6.81 gpt gold.
- The company is planning to commence a 10,000 m / Phase II drill program in early 2020, which will continue to focus on resource and reserve expansion. Results of the Phase I and II programs will be used to update the 2018 resource estimate.
- Management is currently evaluating potential to lower the initial CAPEX (2018 PFS showed US$23 million) by using floatation.
- Kerr has a financing arrangement in place with Sprott, for US$25 million, to fund the CAPEX. Terms are yet to be finalized. Management is also considering alternative options to reduce the cost of capital.
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