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TUCSON-Given the current economy and the scramble into gold and other precious metal investments, it could be assumed that long dormant mines in the Southwest will be gearing up to yield gold, copper and other valuable ores. But mining experts point out that just because interest in the commodities market is surging, there’s a long road to get some of the old mines working and on line.

“The properties themselves have been there forever,” says Andrew Brodkey, a mining consultant with CB Richard Ellis in Tucson. “What we’re seeing recently is a kind of renewed interest in some of the old mining districts.”

Those districts span the Southwest desert, encompassing Nevada, New Mexico and Arizona. One such district, Castle Copper/Molybdenum in Tucson, is undergoing a study by landowner AmMex Gold Mining Corp. Farther north in Superior, AZ, Rio Tinto Copper, based in London, recently unveiled plans to invest $652 million to continue a feasibility study concerning a copper deposit at its Resolution Copper Mining operation.

“It costs hundreds of millions in exploration alone, just to determine if there’s even a reason to build there,” says Brodkey, who helped set up the Rio Tinto joint venture. Beyond the feasibility study, he says it takes billions to get the mine functioning again.

Further complicating the situation is today’s credit market. John R. Hedges, a mining consultant based in Tucson, says institutions aren’t throwing coins at mining projects and private equity sources are few and far between. “Most banks think mining is a high-risk sector,” Hedges says.

The irony, however, is that some investors like mining because of the current high commodity prices. “We’re in a funny situation right now,” Hedges acknowledges. “With the high commodity prices, we should be moving forward. But with the current market, we’re not.”

There’s also the time factor. Studies started today won’t yield much in the way of ore for at least a decade. Brodkey points out the Rio Tinto joint venture and its initial study was launched in 2001. “They probably won’t actually start this until around 2012,” he says.

But, Brodkey says the potential payout is worth it. “What you have at the end of the day is a huge ore body that goes on for dozens of years and has a huge payout,” he adds.

And if all goes well, the economic benefits can be enormous for towns near mines. Housing is needed for the workforce. Amenities to service the residents also are needed, meaning neighborhood retail centers come into play. Brodkey says the economic impact of a project the size of Resolution Copper Mining could be huge for Superior and the surrounding area.

Elko, NV is a case in point. Hedges says hotels, housing and retail developments have sprung up around the town and others as support space for mining activities. The same thing could happen in Superior, which was a very busy place at one time. “With an infusion of new business and people, things could go very well for Superior,” Hedges adds.

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