Local Supporthttps://www.bensonnews-sun.com/news/article_2675c844-71e0-11e5-86ed-8f87856903f4.html DRAGOON Phoenix-based Excelsior Mining Corp. entered into an Asset Purchase Agreement on Thursday to acquire all assets of Tucson-based Nord Resources Corporation at Johnson Camp Mine. Excelsiors flagship property, Gunnison Copper Project, is located immediately adjacent to Johnson Camp in Dragoon, between Willcox and Benson, according to a press release from JJ Jennex, Excelsior Mining Corp. Vice President of Corporate Affairs. Mining operations at Johnson Camp date back to the 1880s and have continued intermittently under various owners. Mining stopped in 2010 due to a reduction in copper production due to lack of operating solutions, and weakening in copper prices, said Nord CEO Wayne Morrison at the time. Since then, there has been limited copper produced from passive leaching of the existing leach pad. Nord has been looking for a financial backer for Johnson Camp for several years, but has been unsuccessful. The mine has been in receivership since Nov. 18, 2014 after Nords principal secured lender, Nedbank Ltd. refused to refinance or renegotiate the terms of a $52 million debt. Instead, Nedbank filed for a court appointed receiver in Pima County Superior Court, with Christopher Linscott as the receiver, responsible for all of Johnson Camp's assets. Linscott said, We knew we needed to sell the assets of Nord. We identified 20 different buyers and had a process allowing each to examine Johnson Camp. There were four bids at the end in February 2015. The one chosen to purchase the assets,Mars Resources, LLC, backed out of the deal in early September. We went back to the other three and Excelsior was still interested, Linscott said. They have an adjacent parcel (Gunnison Copper Project) to Johnson Camp and Johnson Camp has the plant, which Excelsior doesn't have. Where they'll start mining first (following the sale), I don't know, but I imagine the purpose is to continue to mine. Linscott also said that cost-saving measures this week included laying off seven Nord employees. It was done based on position and included two administrative employees in Tucson, the CEO (Wayne Morrison) and CFO (Bernard Skaggs), and five working at the mine. We don't have the funds to keep them on and we needed to keep those in environmental and security positions, he said. Linscott said the parties will be at a court hearing at Pima County Superior Court in Tucson at 9 a.m. Thursday, Oct. 15, regarding the sale. I hope the Judge approves the sale and if so, the sale should close about 30 days later, in November, Linscott said. The Oct. 2 court document for motion to approve the sale by Linscott's attorney Michael McGrath of Mesch, Clark & Rothschild, P.C. of Tucson, states, The purchase price paid by the purchaser will first go to fully satisfy the property taxes secured by the assets. The remainder of the purchase price proceeds will go to receivership expenses and to partially satisfy the secured claim of Nedbank in excess of $53 million that encumbers all of Nord's assets. The receivership does not anticipate any proceeds for any other creditor. Linscott said, This deal is ultimately good for the community. You have a larger mining project with economies of scale, you get a larger bang for the buck with the adjacent parcels. Nord did not have the finances to go forward and Excelsior is a publicly-traded company that has the wherewithal to go forward. It will benefit the community. The back taxes from Johnson Camp Mine must be paid back to the county first following the sale, which will also benefit the community. That's in the neighborhood of $3.9 million going to the schools, hospitals and other entities. That's pretty substantial. For the county to have that (which would not happen if the mine went bankrupt) will be pretty nice, Linscott said. Cochise County Supervisor for District 3, Richard Searle, said, The sale would bring the taxes current (for Johnson Mine). We are short $1.5 million to $1.8 million and that would solve our deficit issue for this year. The county gets about 25 percent of the taxes, while the schools, college, hospitals and fire districts get the rest. It's great to see the business stay open and it's gravy to solve our deficit problem for this year, Searle said Monday. Terms Excelsior's press release outlined the terms of the purchase agreement: Excelsior will acquire the Johnson Camp Mine including all property, patented and unpatented mining claims, improvements, equipment, certificates of deposit, reports and records. Subject to court approval all assets will be transferred to Excelsior free and clear of all liens, and all back-taxes are to be paid by the Receiver from the proceeds of sale. Excelsior will acquire Nords Johnson Camp assets for a total of $8.4 million under the following terms: $5.2 million due on or prior to closing; $1 million due on or before Dec. 31, 2016; and $2.2 million due on or before Dec. 31, 2017. While Excelsior's press release said, Excelsiors purchase of Johnson Camp has saved this operation as a going concern, and the hiring of staff to operate the Johnson Camp Mine will commence upon the closing of the transaction, it also said, Excelsiors strategy is to not immediately recommence open-pit mining operations; the focus will be to bring the Johnson Camp Mine into environmental and regulatory compliance, while reviewing the mining and exploration potential for the entire district. Excelsior plans to use Johnson Camp's SX-EW plant to process copper solution from the Gunnison Copper Project once in-situ operations are fully permitted and finally, Johnson Camp will be revitalized by the guidance of Excelsiors management team, who will bring a wealth of operational experience to the project, the press release noted. Commenting on the Johnson Camp Transaction, Stephen Twyerould, President and CEO of the Excelsior, said, This is an exciting development for the Company. The SX-EW plant at Johnson Camp is in good working order, and once our Gunnison Project to the south is permitted and ready for production, we expect that the copper solutions can be easily processed through the existing Johnson Camp facilities. This is expected to allow us to significantly reduce our upfront capital requirements and the time required for the startup of the Gunnison Project. The Company also intends to thoroughly examine the potential of Johnson Camp, especially since this is the first time in its 130-year history that the entire Johnson Camp district has been consolidated under one ownership. Johnson Camp mining claims are contiguous with Excelsiors Gunnison Project. The property consists of 59 patented lode mining claims, 117 unpatented lode mining claims and fee simple lands. The existing facilities include a 4,500 gallon per minute solvent extraction plant, a tank farm, an electrowinning plant with 88 electrowinning cells with capacity of 25 million pounds of copper cathode per annum, solution storage ponds, a truck shop, core storage building, offices, warehouse, laboratory, mechanical shop, a primary and secondary crusher, and various other equipment. The press release describes the Gunnison Copper Project as 6,400-acre in-situ recovery (ISR) operation. Excelsior is working through the process to permit and is one of the most environmentally friendly copper extraction projects under development in the world today. Once the mine is in full production, Gunnison Copper is expected to directly employ more than 100 people, the press release said, including everything from highly skilled technical positions to administrative jobs.