TORONTO (miningweekly.com) – Industrial metals and minerals firm Cardero Resource on Monday revealed a comprehensive restructuring plan, which included the acquisition of the Zonia copper oxide project, in Arizona, in the hope that switching to a focus on copper would allow it to, once more, create shareholder value.

Under the terms of the plan for which the company would seek shareholder approval at an annual general and special meeting on August 26, in Vancouver, Cardero would restructure $8.5-million of debt, sell its subsidiary Cardero Coal, retain a participation right in the Carbon Creek metallurgical coal project, acquire the advanced Zonia project and roll back the company's stock at a ratio of one new share for every ten old shares held.

Following the share consolidation, the company would undertake a concurrent nonbrokered $1.5-million private placement at $0.15 a share.

"We are delighted to announce a comprehensive restructuring plan that we believe will provide a platform on which to build a copper exploration and development company. Copper is a commodity for which demand is expected to continue to expand as industrialisation continues at pace across the globe,” president and CEO Henk van Alphen noted.

Large copper projects typically had long lead times to develop and medium-scale projects such as Zonia created the opportunity for profitable production when copper prices started to move sharply upward, Van Alphen added.

He explained that Cardero was completing due diligence on several other copper opportunities and intended to make other acquisitions, aiming to build a portfolio of copper assets at various stages of development.

Following the reorganisation, long-term Cardero investor Robert Kopple of Los Angeles would become the company’s largest shareholder.

ZONIA PROSPECTS
The project had been held under private ownership for almost a century, during which it had been subject to comprehensive exploration, metallurgical studies and mine development planning.

Drilling on the property totalled more than 60 000 m in almost 700 drill holes, reducing technical risk considerably.

A 2011 historical pit-constrained resource outlined combined measured and indicated resources of 464-million pounds of copper, grading 0.33% at a 0.18% cutoff.

The deposit had undergone deep oxidation from surface and metallurgical studies and demonstrated that it was amenable to openpit mining, heap-leaching, solvent extraction and electrowinning to produce cathode copper, with an overall expected recovery of 73%.

The currently defined deposit was on private land, where mine road construction and prestripping had already been completed. Electricity was available from the public grid within 7 km of the mine site and the project had a water supply that was able to support mining and processing. Cardero believed that permitting for the project would be streamlined as no part of the project would impact public lands.

The major components of the future work plan for the project would include a maiden National Instrument 43-101-compliant resource estimate, which was expected to convert the historical resource estimate to current resources.

Cardero would now analyse all historic data and, upon choosing an appropriate development route, planned to publish a preliminary economic assessment.

Environmental work and permitting would be a parallel process.

In tandem with this work, Cardero intended to seek an appropriate development partner and financier to move the project through feasibility and construction.