Copper Mountain Mining (TSX: CMMC) has announced an updated life-of-mine plan, completed at a pre-feasibility study level, for its 75%-owned Copper Mountain mine in southern B.C. The latest report incorporates a mill expansion to 65,000 tonnes per day, up from 40,000 tonnes per day currently.
According to the company, this will increase Copper Mountain’s after-tax net present value by over 60% to US$1 billion, on higher production and lower costs, when compared with last year’s technical report.
The latest study builds on a 45,000 tonne per day mill expansion that is now underway and expected to start up in the third quarter of next year.
The new mill expansion scenario features a 21-year mine, producing an average of 106 million lb. of copper and 60,000 oz. of gold annually, at cash costs of US$1.21 per lb. over its life. The initial capital cost for the 65,000 tonne per day expansion is estimated at US$123 million, plus a 25% contingency, for a total of US$148 million. Assuming US$3.15 per lb. copper, US$1,700 per oz. gold and US$22 per oz. silver, the NPV estimate for the expanded operation stands at US$1.01 billion, at an 8% discount rate.
“The 65,000 tonne per day expansion, which moves the Copper Mountain mine to about a billion dollars of asset value, clearly underscores the mine’s quality, and our team’s ability to potentially grow reserves and value further,” Gil Clausen, Copper Mountain’s president and CEO, said in a news release. “This mill expansion study builds upon the growth projects that are already underway and illustrates the immense potential that the Copper Mountain Mine provides.”
Clausen noted that Copper Mountain will now refine the capital cost estimates for the project as it prepares for a development decision.
The current flowsheet at Copper Mountain includes two-stage crushing, semi-autogenous grinding, a pebble crusher, two ball mills and a sulphide flotation circuit. To complete the expansion to 45,000 tonnes per day, the miner is working to add a third ball mill. The 65,000 tonne per day option would include the installation of a high pressure grinding roll (HPGR) circuit, the addition of a fourth ball mill, as well as a regrind verti-mill and require additional rougher and cleaner flotation capacity and electrical system upgrades.
The technical report sees the circuit additions starting up in early 2024.
According to the company’s press release, the expansion to 65,000 tonnes per day represents a plant-wide improvement, which would also yield lower operating costs, reduce energy consumption, improve flotation performance and de-bottleneck concentrate dewatering for greater operational flexibility. This project would not require any additions to the mining fleet as “the existing fleet already produces sufficient ore supply to feed the concentrator at the planned milling rates.”
Clausen highlighted that all of the deposits at the site remain open. The company is working to fund the latest growth option with internal cash flows.
This year, the mine is expected to generate 70 to 75 million lb. of copper, at all-in costs of US$1.85 to US$2 per lb. copper.
Copper Mountain Mining has a 75% stake in the Copper Mountain mine (Mitsubishi Materials holds a 25% interest).
“Positively, Copper Mountain Mining has indicated that it expects to fund the expansion with internal cash flow,” Rene Cartier, who covers the company for BMO Capital Markets, commented in a research note to clients, adding that “we continue to expect additional reserve and resource growth is achievable … and, in our view, believe that a mine life longer than 21 years is likely to be achievable.”
The analyst raised BMO’s price target on the stock to $1.80 per share. At presstime in Toronto the company’s shares were trading at $1.50 within a 52-week range of 28 cents and $1.65. The company has about 207.5 million common shares outstanding for a market cap of about $330 million.
This article first appeared in the Canadian Mining Journal, part of Glacier Resource Innovation Group.