PERTH (miningweekly.com) – US-focused Australian-American Mining Corporation (AusAmerican) has taken the option to aquire a 50% interest in the Victoria copper mine, in Nevada.

MD Richard Holmes said on Monday that the acquisition represented a significant milestone for the company.

“We believe that we will be able to rehabilitate the mine and be in production by mid-2014,” he said.

The Victoria copper mine is some 120 km south-east of Elko and was closed in 1977 owing to declining copper prices. The mine was briefly restarted in 1980, but closed shortly after following the takeover of its operator.

At its peak, the mine produced some 1 000 t of ore a day, and the project was currently estimated to host a resource of some 2.6-million tonnes, grading 2.1% copper for 55 235 t of contained metal.

“This project adds significantly to our copper portfolio in the US, a jurisdiction in which we feel very comfortable, given its size, security, infrastructure, cost advantages and, importantly, demand for copper,” said Holmes.

He noted that the Victoria project was highly attractive to the ASX-listed AusAmerican owing to its relatively low-cost entry, near-term production potential, and excellent exploration upside opportunities.

“This acquisition will enable AusAmerican to self-fund exploration and the further development of the Victoria mine, Blue Bell and De Soto copper projects,” he said.

AusAmerican was planning to redevelop the Victoria mine, with production expected to start by mid-2014. Discussions were also under way with local copper producers to toll treat the Victoria ore, and these negotiations were expected to conclude in the near future.

Under the terms of the transaction, AusAmerican would earn its 50% stake in the project by investing some $5.5-million on mine development or regional exploration, and paying option payments totalling $3.5-million on a number of key milestones.

The company would also obtain the right of first refusal on the remaining 50% interest in the project.