An Osburn silver mine that has exhausted the exploration efforts of at least two mining companies changed hands again Monday.
Boise-based Sunshine Precious Metals Inc. bought the Silver Summit Mine and surrounding mine properties Monday from Consolidated Silver Corp.
Coeur d’Alene-based Hecla Mining Co. owns two-thirds of Consolidated Silver, which has been dormant since the mid-1980s. The small company is so named because it was created in 1967 when several mines including the Silver Summit were consolidated.
Hecla had leased the mine from Consolidated from 1980 to 1984, said Ralph Noyes, president of Consolidated and vice president for metals mining for Hecla.
Hecla poured $17 million to explore the Silver Summit, “but the results were very negative,” he said. New-York based Asarco Inc. took a crack at finding a suitable silver deposit, but also gave up on the lease in the late 1980s, Noyes said.
The mine borders the Sunshine silver mine to the east, and Sunshine has been maintaining the hoist and 4,000-foot shaft at the Silver Summit for several years.
Sunshine bought the complex for $750,000, giving Consolidated shareholders a 4 percent net royalty on any ore produced from the mine.
Assuming that Consolidated shareholders approve the deal later this year, the company will turn around and buy Hecla’s 50 percent stake in the Ojo Caliente silver project in Zacatecas, Mexico.
The Zacatecas District has yielded more than 600 million ounces of silver, and Noyes believes the adjacent Ojo Caliente area could be as promising. Hecla has already spent $130,000 exploring the site, and Consolidated will sink another $600,000 into a drilling and survey project.
For Sunshine, the purchase expands its presence in the Silver Valley beyond its flagship Sunshine silver mine. For Hecla and Consolidated, it represents continuation of a move away from domestic mining properties and toward more exploration in Mexico.
Hecla spent more money exploring its Mexican properties than it did on U.S. properties for the first time last year, said Art Brown, chairman and chief executive.
Preliminary results from that drilling should be available by the fourth quarter of this year, Brown said.
Harry Cougher, Sunshine vice president of mining operations at the Sunshine mine, was on vacation this week.
Noyes said the Silver Summit area “still has some potential” as a workable silver mine. Consolidated shareholders hold no risk in the mine since their royalty would apply to only any silver eventually smelted from the mine’s ore, he said.
Both Hecla’s and Sunshine’s stock finished unchanged Monday at $2 and $11.25 respectively.