Copper Mountain Mining Corp. [CMMC-TSX; CPPMF-OTC; C6C-ASX] said Wednesday March 11 that it has revised its mine plan and project schedule at its flagship Copper Mountain Mine in southwest British Columbia.
It said the objective is to maintain solid positive margins and cash flow in response to current market conditions and near-term copper price uncertainty as a result of the coronavirus impact on metal prices.
The key changes outlined by the company on Wednesday include the deferral of Ball Mill #3 installation capital expenditures, resulting in a saving of US$22 million in 2020.
Copper Mountain is also reducing operating costs by re-sequencing short term production to lower cost mine phases.
In addition, the company is preserving high-grade ore in Pit #3 that was scheduled for mining in 2020. That material will now be mined in 2021 for the benefit of expected higher metal prices and to match deferred Ball Mill #3 expansion capital spending.
These actions allow the company to maintain solid cash flow margins at the mine and run sustainably in the current low copper price environment, without any sacrifice to the long term mine plan, the company said in a press release.
In addition, the revised mine plan also allows the company to continue to be able to fund the mill expansion project internally, Copper Mountain said.
The company said saving the high-grade ore originally planned to be mined in 2020 for 2021 also better matches potential higher copper prices, thereby maximizing cash flow generation.
Copper Mountain’s flagship asset is the 75%-owned Copper Mountain mine near the town of Princeton. The Vancouver-based company is working in a strategic alliance with Mitsubishi Materials Corp., who owns 25% of the mine. The Copper Mountain Mine produces about 100 million pounds of copper equivalent annually with a very large resource that remains open laterally and at depth.
Last year, Copper Mountain announced a new integrated life-of-mine production plan for the mine. The plan included a modest expansion of its existing mill to 45,000 tonnes per day and the integration of production from the nearby New Ingerbelle property.
The integrated production plan came after the company recently released new results from drilling on the nearby New Ingerbelle property. Copper Mountain was aiming to add a minimum of 150 million tonnes of Measured and Indicated Resources before commencing a feasibility study on the site’s development potential.
The goal was to define sufficient reserves to add another 10 years of production to Copper Mountain’s life-of-mine plan.
During the third quarter of 2019, Copper Mountain continued with engineering work to advance its expansion plan at the existing Copper Mountain mill. The plan for expansion to 45,000 tonnes per day from 40,000 tonnes included the installation of a third ball mill that the company has already purchased.
However, on Wednesday the company said it has modified the Copper Mountain mine plan for the current low copper price environment by cutting the mining rate by approximately 25% to 120,000 to 160,000 tonnes per day for the remainder of 2020 from approximately 200,000 tonnes per day.
Copper Mountain shares declined on the news, falling 4.1% or $0.015 to 35 cents. The shares are trading in a 52-week range of 35 cents and $1.18.