Copper Mountain Project, Canada

The Copper Mountain project is situated 15km south-west of Princeton, British Columbia, Canada. It covers around 18,000 acres of mining land held under a combination of 135 crown grants, 132 mineral claims, 14 mining licenses, eight cell mineral claims and 12 fee simple lots.

The project mining property and associated permits are under Similco Mines, a wholly owned subsidiary of Copper Mountain Mining Corporation (CMMC).

Copper Mountain is an open pit porphyry copper mine. It is expected that over 17 years of life the mine will produce 1.47 billion pounds of copper, 452,000oz of gold, and 4.5 million ounces of silver.

Activities at the project site were funded by company equity contributions and around $28.75m loan was availed through credit from Mitsubishi. By September 2009, the total expenditure on the project stood at $40m.

Mitsubishi and CMMC signed a Memorandum of Understanding in September 2008, under which Mitsubishi will also develop the project.

Mitsubishi Materials Corporation and CMMC entered into definitive agreements in July 2009. Under the agreements, Mitsubishi will acquire a 25% stake in the Copper Mountain project. In addition, Mitsubishi will provide a $250m loan, and will buy all copper concentrate from the mine.

Reserves

The proven and probable mineral reserve aggregate 211.1 million tonnes, averaging 0.36% Cu containing 1.7 billion pounds of copper as of mid-2009. The mineral reserve is based on 0.15% Cu cut off. Mineral reserve is part of resource included in open pit plan framed by hatch, and is based on economic cut off grade of 0.15%.

The present resources are estimated at five billion pounds of copper at a 0.15% Cu cut off. The resource estimate has been measured on the data from over 4,400 historical drill holes totalling approximately 400,000m, and 370 drill holes, totalling 107,000m from CMMC's 2007 and 2008 exploration programmes.

Geology, exploration and drilling

The deposit at the project site is classified as an alkali porphyry copper deposit with gold admixture. It is part of northerly trending Mesozoic tectonostratigraphic terrane known as Quesnellia. The major rock formation of Quesnellia is late Triassic Nicola group.

The Nicolo group rocks have a stratigraphic thickness of approximately 7.5km and form a 25km-wide band extending from the Canada – US border north to beyond Kamloops lake. The Copper Mountain alkalic porphyry copper gold camp exists in the eastern volcanic belt of the Nicolo Group.

CMMC worked on three-pronged exploration strategies such as initial targets, secondary targets and deep porphyry targets. Initial targets included testing historical resources within the existing pits and the areas between 1, 2 and 3 in the saddle zone area, which were untested. The second set of targets included Virginia, Mill Zone, Alabama deposit, Oriel deposit, Voigt Zone and in Alabama and Copper Mountain trends.

The deep porphyry targets include Deep Penetration Titan 24 Geophysical survey which has been completed assisting deeper exploration for underground zones of higher grade.

The current drilling programme was started in January 2007, focusing on providing additional verification of historical drill data, testing areas between the existing open pits. At the end of 2007, the company also concluded Titan deep 24 penetration geophysical survey on 13km square area over exiting pits.

CMMC completed drill exploration programme in 2007 and 2008 by drilling around 106,000m. The drilling and exploration programme's focus was to determine a new merged pit known as super pit which will be more wide, deep and big to access additional mineralisation at depth. In addition, a drill data density for assisting upgrading of classification during resource estimation was also conducted.

The company identified a potential Super pit and current drilling continues to focus on existing pit 1, pit 2 and pit 3. Further, additional drilling has been planned to assess adjoining area and test the mineralisation at depth.

Open pit mining

An independent feasibility study in 2008 confirmed the possibility of restarting a past open pit.

During October 2008, the company announced the go ahead of a development of the Copper Mountain project.

The project site has already developed with substantial infrastructure supporting 25,000 TPD open pit operation. The project property owns water licences sufficient to support operations ranging between 25,000 to 50,000 TPD. A 138kV power line provides service to existing facilities at site. Further, a new milling facility will be required to be developed on project property to integrate the operation facilities close to mining areas.

Production

The results of the feasibility study was announced in July 2008. It resulted in a few changes to project's production plan. The changes included more copper production in the initial years and higher mine life.

Gisborne Industrial Construction was chosen as a general contractor to start mill foundation work subjected to government approval on 3 September 2009. It is expected that the mill building will be enclosed by mid 2010 allowing equipment installations to proceed catering to meet planned production start in mid 2011.

History

Exploration begun at Copper Mountain in 1884. Granby Consolidated Mining acquired the property in 1923 and developed a milling facility in Allenby adjoining Princeton. Granby extracted 31.5 million tonnes of ore with a grade of 1.08% copper mainly from underground excavations. Currently, these are Pit1 and Pit 3 areas. Granby was acquired by Newmount Corporation in 1972. During 1988, Cassiar Mining corporation took over Similco Mines Ltd. owner of property. Production continued from Pit1 and 3 until the mine's closure.

The deposit was mined by underground methods during 1923 to 1957. Open pit mining begun in 1968 and mine was closed in 1996 due to lack of low strip ratio reserves, increasing production costs and necessary capital expenditures.

Future development

The company plans to utilise the existing infrastructure to the maximum. The new mill facility would be relocated near to Super Pit and uphill from existing tailing management facility. Power will be supplied through power extension from existing 138kV power line to new mill facility, pit shovels and drills.

Haul trucks will be used for trucking ore. The project mineral area totals 6,700ha, out of which around 875ha (13%) was developed earlier. Further, 225ha will be developed for expanded facilities. The completion of feasibility study indicates the economic feasibility of re starting of production from a conventional open pit mine with a 35,000t a day mill. The reopening of mine will produce around 100 million pounds of copper every year in a copper concentrate with gold and silver credits.