Some old-line markets have become casualties of technological change while others have benefitted from the efficiencies that it brings. High volume industries are one such market that have taken advantage of these efficiencies; finding efficiencies that allow reopening of plants and sites that may have once been thought to be played out or uneconomical. If an investor can find a company that is taking advantage of technology in an old-line industry, solid profits can be found for the taking.
Nord Resources Corp., a mining exploration, development and operations company, works to extract copper and decorative stone in Arizona. The company’s leading project is its Johnson Camp mine located just east of Tucson.
Currently, the company is reactivating two open pit copper mines at its Johnson Camp mine location. The beginning steps in reactivation involve bringing the mines existing heap piles into copper production through cathode and solvent processing facilities – in-place and operational at the mine site. As this process ramps to its full capacity, the company will be working toward full operations of its two open pit sites, with an estimated 25 million pounds of production by spring 2009.
These two existing mine sites, however, are just the beginning of the Johnson Camp mines full potential. Test drilling has begun at several of the company’s other patented claims on the site with expectation of further development. At present, the company has rights to 64 patented claims, 88 unpatented claims, and 511 acres of simple land claims for a total of 2,723 acres of land.
As copper prices continue to move at near record highs, the company has been able to secure advantageous financing for its business plan. In recent weeks, it has amended its current $25 million credit agreement to allow for a bit more flexibility. The amendments are fairly favorable to the company and only minimal in general form, allowing for a cushion of several months to bring its two existing Johnson Camp mines into full production. From all indications, this cushion is not necessary but does dictate that the company’s mines be in full production by fall 2009.
Commodity copper is at a solid price level for the moment and is likely to remain within acceptable profit parameters for the foreseeable future. Nord Resources is quickly bringing a solid source of production online and will be ready to profit by copper’s price rise sooner rather than later.
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