Wednesday, February 24, 2010

Kennecott reaches deal to explore mining in Eureka

Chief Consolidated Mining Co. has signed an agreement with Kennecott Exploration Co. to mine for copper, gold and molybdenum. The agreement becomes complete when contracts are signed by all involved parties, which could take several months. Under the terms of the agreement, Kennecott will focus on what is known as the Big Hill Project — a hill in the center of the 16,000 acres (including part of Eureka) owned by Chief Consolidated. Kennecott would earn 51 percent of the project by completing a pre-feasibility study or incurring $20 million in costs, whichever comes first. If successful, Kennecott would get another 4 percent of the project once the investment committee for Kennecott's parent corporation, Rio Tinto, accepts the study. Chief Consolidated and its subsidiaries own the claims. The Deseret News