Mining News April 29, 2009

Freeport McMoran Profits Nose Dive, by Ted Lake

Still not paying dividends of common shares of stock because of the slumping economy, Freeport McMoRan stockholders received more bad news last week that lst quarter profits plunged 96% from a year ago. The company said its net income for the first three months of this year was $43 million compared with $1.1billon this time last year. Consolidated sales from all of Freeport McMoRan's mines during the fi rst quarter totaled 1 billion pounds of copper, 545 thousand ounces of gold and 10 million pounds of molybdenum, compared with 911 million pounds of copper, 280 thousand ounces of gold and 20 million pounds of molybdenum during the first quarter of 2008. The company said its total debt was approximately $7.2 billion and consolidated cash was $644 million at March 31, 2009. Capital expenditures during the first quarter were $519 million while the operating cash flow was $258 million. In February, the company sold 26.8 million shares in common stock to realize some $740 million. Stockholders were also told there were no amounts borrowed under Freeport’s $1.5 billion revolving credit facility during the quarter.

ASARCO Takeover Near, By ted Lake

The ASARCO copper mines here in Arizona are one step closer to being taken over by Sterlite Industries of India. In Corpus Christi, Texas last week a federal bankruptcy judge approved ASARCO's court appointed management's signing of an agreement to sell the three copper mines and a refinery at El Paso to Sterlite for $1.7 billion ($1.1 billion cash and $600 million promissory notes). It is apparently now up to creditors in the Chapter 11 proceedings to either approve or reject the deal. If approved, it will be the start to end the bankruptcy case which has been underway since September 2005. Locally, ASARCO is the largest mining employer with 1,300 workers still on the job at its Hayden Smelter/Concentrator and Ray Complex. There are nearly 1,000 workers elsewhere in Arizona. Meanwhile, on Monday of this week, in a surprise move, Sterilite's parent firm Vedanta Resources said it had purchased a 9.5% stake in Hudson Bay Minerals, but gave no reason for the move to buy into the Canadian Mining Company.

STAR Supports Land Swap, by Ted Lake

The state's second largest newspaper in Tucson has come out in support of the Resolution Copper Land Exchange bill now in the U.S. Senate. Several months ago, the Arizona Republic in Phoenix also voiced its support of the measure. In an editorial appearing in Sunday's edition, the "Daily Star" said "we applaud Gov. Jan Brewer's announcement that she supports land swap legislation that Resolution Copper Company needs to undertake a mining operation near Superior that will create some 5,000 most skilled jobs and have a $46.4 billion economic impact over the life of the project." "As we said four years ago, it's a good deal for Arizona. Its economic impact alone could be tremendously benefi cial. And it's good for Southern Arizona because some of the lands (5,500 acres) that Resolution is offering in the swap are precious natural assets." "The 3,000 acre mine site in the Tonto National Forest contains a world class ore body," Resolution President David Salisbury told the Star's editorial board on Friday. It would be a decade before the mine begins producing, but it's expected to pay out over the following four decades.

22 New Drill Sites East of Superior, by Ted Lake

Officials of Resolution Copper have outlined their future mining exploration plans involving Tonto National Forest Lands, east of the Town of Superior. The company is proposing the following: (a) To initiate five exploration drill sites impacting 1.14 acres and directional drilling operations at these sites. (b) Developing eight drill sites to accommodate a total of three deep and six shallow groundwater 22 New Drill Sites East of Superior, testing and monitoring wells, involving some 1.78 acres of Tonto Forest lands. (c) To construct nine drill sites impacting approximately 1.8 acres to accommodate a total of nine geotechnical characterization boreholes. (d) Continuation of exploratory and monitoring activities at previously authorized drill sites involving some 3.02 acres. (e) Complete necessary roadway improvements on approximately 16.97 miles of existing roads impacting 0.55 acres. (f) Building 0.33 mile of new roads impacting 0.55 acres. (g) Resolution Copper says it will continue with ongoing road maintenance to maintain access to drill sites. The above information has been listed in Resolution Copper's Plan of Operations for Pre- Feasiblity Activities which has now been submitted to the Tonto National Forest Offices at 2324 East McDowell Road in Phoenix 85006 ( 602-225-5295 ). Officials of the Forest Service are seeking public comments on the Environment Assessment of Resolution's proposals through April 30.