Copper Mountain advances on Eva speculation.
Copper Mountain Mining Corp. [CMMC-TSX] has commented on speculation that it is making moves to sell its Eva Copper Project in Queensland, Australia, an asset that would be expected to fetch around $300 million, published reports say.
After the close of trading on June 27, 2022, Copper Mountain issued a statement saying it has been made aware by the Australia Stock Exchange of media speculation regarding a possible transaction related to the Eva project.
“The company’s policy is not to comment on market speculation,” the company said in a press release. “The company notes that it regularly reviews strategic opportunities to enhance shareholder value, and to this end, the company has engaged Macquarie Capital to evaluate strategic opportunities regarding the Eva Copper Project,” it said.
“There are no pending transactions with respect to the Eva Copper Project of any nature at this time.”
Still, Copper Mountain shares on Tuesday rose 3.6% or $0.07 to $2.03 on volume of 301,310. The shares are currently trading in a 52-week range of $4.38 and $1.66. That’s up from $1.67 on June 23, 2022.
Copper Mountain’s flagship asset is the 75%-owned Copper Mountain mine in southern British Columbia. The Copper Mountain Mine currently produces approximately 100 million pounds of copper equivalent per year, with average annual production expected to increase to approximately 140 million pounds of copper equivalent at a cash cost of US$1.19 per- pound over the first 10 years of its 21-year mine life.
The company has been drilling a satellite deposit known as New Ingerbelle in a bid to define sufficient reserves to add another 10 years of production to Copper Mountain’s life of mine plan.
Copper Mountain’s other key asset is the Eva Copper Project in the Mount Isa region of Queensland. The company has formally approved the development of Eva, contingent on completing detailed engineering to at least 80%, a process that was expected to be completed by the third quarter of 2022.
The project is envisioned to be a conventional open pit with a conventional crush, grind, flotation circuit. The property is accessible by air and road and has sufficient water and power available via a powerline.
Based on the current schedule, commissioning of Eva is expected to be in late 2024. The project is expected to produce 106 million pounds of copper equivalent (including 100 million pounds of copper and approximately 14,000 ounces of gold) on an annual basis.
In an updated economics and development plan announced on December 13, 2021, Copper Mountain said the current inflationary environment has resulted in some project capital cost escalation.
At that time, the development capital expenditure was estimated at A$836 million, up from US$705 million in a May, 2020 feasibility study.
Eva’s after-tax net present value, based on an 8% discount rate, is now pegged at US$622 million.