SPS´s Yerington property is located just west of the town of Yerington and about 50 miles southeast of Reno. The Anaconda Copper Company conducted open pit mining over a period of 25 years at Yerington, producing 1.7 billion pounds of copper from 104.8 million tons of oxide ore and 58.6 million tons of sulfide ore; and discovered and partially delineating the large Bear copper deposit north of the open pit. Anaconda closed the mine in 1978 due to low copper prices, not because of declining mineralization.
The estimated remaining copper in and around the Yerington pit after the shut down (K. L. Howard, Jr., Anaconda Internal Memo, 1979) at a cut-off of 0.20% Cu includes:
- 97.8 million tons with an average grade of .356% Cu containing approximately 696 million pounds of copper within the original pit design.
- 22.8 million tons of material adjacent to the pit with an average grade of 0.30% Cu containing 136.8 million pounds copper.
- Historic resources in the Bear deposit, located in the northeast corner of the property, reportedly containing more than 500 million tons of material averaging 0.4% copper (Dilles and Proffett, 1995). The Bear deposit was discovered in 1961 by Anaconda during condemnation drilling in the sulfide tailings disposal area.
Note: All copper estimates are historic in nature and are not NI43-101 compliant and should not be relied upon. A qualified person has not done sufficient work to classify these historic estimates as a current mineral resource and Quaterra does not treat them as such. In order to do so, they will have to be confirmed by additional drilling.
SPS is planning an aggressive, two-year, exploration program to validate historic drilling data in order to complete a NI43-101-compliant resource estimate and technical report on the project. The program will include both core and reverse circulation drilling, geophysical surveys, and preliminary metallurgical studies to evaluate the historic copper mineralization at the mine site and to investigate the surrounding areas for new deposits.
The purchase of the properties required a US$500,000 cash payment, 250,000 shares of Quaterra common stock and a 2% net smelter return royalty capped at US$7.5 million dollars on production from any claims owned by Quaterra in the Yerington and MacArthur mine areas.
The acquisition by SPS of the Arimetco properties required a series of rigorous environmental, legal and technical due diligence studies. The Chambers Group Inc. and Golder Associates Inc. completed a Phase 1 Environmental Site Assessment Report to allow SPS to establish liability protection as a bona fide prospective purchaser. SRK Consulting (U.S.), Inc. completed the most recent update of the report on March 3, 2011.
Legal due diligence included a legal description of the property, a chain of title report and an assignment of water rights. Agreements have been completed with the EPA, Nevada state agencies and the Atlantic Richfield Company to define, limit and protect the Company from existing liabilities on the property and allow access to explore.
Technical due diligence involved the review and compilation of a wealth of historical data in the Anaconda Library in Laramie, Wyoming. Numerous reports, maps and historical drilling data have been scanned and entered into an internal data base. An initial review has been completed of both past production and remaining mineralization in and around the Yerington pit. The Company´s digitized Anaconda data base now includes collar locations, rock types, and geochemical assays of 760 historic drill holes, including most of the historic drilling data for the Bear deposit
