OURAY – No title has changed hands in a deal that closed on Sept. 22 regarding the Camp Bird Mine. That is because what occurred on that day was not a transference of mining claims, but rather a financing and investment deal.
As reported in the Sept. 13 issue of The Watch, the California-based Caldera Mineral Resources Inc. announced last month that it was poised to purchase the historic Camp Bird property in a majority acquisition deal that includes all of the mine’s existing claims.
Bentley Blum, chairman and majority shareholder of Camp Bird Colorado, Inc.’s parent company Federal Resources, said last week that there is a financing deal in place that involves Caldera and its investment group, but that at this time the Camp Bird Mine is still “totally” owned by Camp Bird Colorado, Inc.
“All we did was close a deal to finance, to get (the mine) to a point where it can actually function,” Blum said. “It hasn’t been sold. Camp Bird Colorado Inc. owns it. They (Caldera) don’t own it, an ounce of it, a square of it, a rock of it, nothing.”
A records search on the Ouray County Clerk’s website confirms this is the case.
“We don’t own it, but we control it,” clarified Caldera CEO John Bryan in an interview on Tuesday, Oct. 2.
According to Bryan, Caldera now has a complete perpetual lease on the Camp Bird mining property and holds a mortgage on it, with an option to purchase six months from now on March 22, 2013. Payment to Blum, and transfer of ownership of the patented mining claims associated with the Camp Bird Mine, is deferred to that time.
“We will own 60 percent in March, and Camp Bird Colorado Inc. ownership will reduce to 40 percent,” Bryan said. “We will have a further option to increase our stake more over a period of time.”
Blum is and will remain a partner in the project, according to Bryan.
“I give him great credit for standing firm and not just selling (the property) under distress,” Bryan said. “He waited for the market to come back. And for people who care about the property and are passionate for it. That’s a big reason we wound up doing this deal together; I think Bentley had great love for this asset and may not have been able to invest in it the way he wanted to. He wanted to find somebody that shared his passion and would love this place.”
Caldera’s management group has allocated $12 million for the initial rehabilitation phase at the Camp Bird Mine. It will take at least that much money, Bryan estimates, “to get this up and running. When you get in there and clean up the tunnels, that’s probably a conservative budget.”
With a financing deal in place and preliminary permitting matters with the Colorado Division of Mining, Reclamation and Safety also recently squared away, a small crew of miners headed by Caldera Resources, Inc. Vice President of Operations Bumper Williams is currently working to stabilize the opening to the 14-level tunnel, which collapsed several years ago.
In addition to the mining crew, there are construction contractors, heavy equipment operators and electricians employed at the site – about 15 workers in all.
A settling pond is already about two-thirds complete, and construction of a new temporary equipment storage building is well under way. Kunz Construction is at work renovating the historic buildings at the site, and a crew of electricians is building a power substation.
Bryan estimates Caldera has spent over $1 million on the project so far, and added that he is very impressed with the local talent pool that he has employed.
“We’ve got one of the best teams of people I’ve ever worked with,” he said. “I’ve got experience all over the world. I’ve never seen a better group of skilled and caring people. We are just thrilled. We have a very, very important and historic property, and we intend to treat it and our employees and the community with respect. This is a great, great project.”
Bryan has a background in restructuring companies in distress. According to his resume, he has been involved in a variety of industries with a special focus on mining and mining-related activities as well as health care, communications and media. He started his career in 1980 at Westinghouse Electric Corporation. A previous Watch article erroneously printed biographical information about his father, who has the same name, based on a resume Caldera had supplied in error.
That article also stated that Bryan’s company, The Watley Group, had acquired the Camp Bird Mine in a roll-up of distressed mining companies. Both Bryan and Blum clarified that this was not in fact the case, although The Watley Group was involved in a roll-up of other distressed mining operations, namely the Copper King Mining Corporation and Western Utah Copper Company.
Ultimately, Bryan sees a larger role for Caldera in the San Juan region. “We are looking at a number of opportunities in the neighborhood for a similar type of business transaction as the Camp Bird,” he said. “We expect to become a profitable income-producing mining business. We see a great market for that, and we are actively pursuing other opportunities.”
As enthusiastic as Bryan may be, Blum sounded a more cautious note, pointing out that the Camp Bird’s fate will depend on what the exploration team assembled by Caldera discovers once the historic workings are opened up.
“We’re waiting to get to a point where we can see what’s there. Where it goes beyond that, I don’t think anyone can say,” Blum said. “Put your finger up in the wind.”
email@example.com or Twitter: @iamsamwright