Copper Mountain rallies on B.C. mine plan

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Open pit mining operations at the Copper Mountain Mine near Princeton, southern British Columbia.

Copper Mountain Mining Corp. [CMMC-TSX; CPPMF-OTC; C6C-ASX] on Monday February 25 announced a new integrated life-of-mine production plan for its flagship Copper Mountain mine in southern British Columbia.

Copper Mountain shares advanced on the news, rising 18.6% or 16 cents to $1.02 on volume of 1.98 million. The 52-week range is $1.45 and 65 cents.

The integrated production plan includes a modest expansion of its existing Copper Mountain mine mill to 45,000 tonnes per day and integrates production from the nearby New Ingerbelle property.

The results include a 102% increase in mineral reserves, a 27% increase in average annual copper equivalent production to over 116 million pounds (over the first 10 years), a 12-year extension in mine life to 26 years and a decrease in cash costs to US$1.87 per pound produced, when compared with the previous Copper Mountain Mine production plan included in the company’s 2018 NI 43-101 technical report for the mine, filed in November, 2018.

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., which 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.

Copper Mountain shareholders recently approved the acquisition of Australia-based Altona Mining Ltd., which brings significant growth potential with the development-ready Eva Copper (Cloncurry) Project and massive exploration potential in the 4,000 km2 (379,000 hectare) mineralized land package all within the highly prospective Mt. Isa area in Queensland, Australia.

Pierre Vaillancourt, vice-president and senior mining analyst at Haywood Securities, said the Altona acquisition could be transformative for Copper Mountain, potentially doubling Copper Mountain’s production profile by 2020.

The integrated production plan (announced Monday) comes after the company recently released new results from drilling on the nearby New Ingerbelle property, where the company 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 has been to define sufficient reserves to add another 10 years of production to Copper Mountain’s life of mine plan.

In September 2018, the company said measured and indicated resources at New Ingerbelle stood at 151.3 million tonnes, grading 0.29% copper, 0.57 g/t silver, 0.18 g/t gold and 0.41% copper equivalent, containing 955.4 million pounds of copper and 872,000 ounces of gold at a 0.16% copper cut-off grade.

Copper Mountain said the integrated production plan outlines a phased approach to the investments in the mill expansion and New Ingerbelle development.

It said the first phase would be the plant expansion, which requires the installation of a third ball mill. The plant expansion could be completed as early as the first quarter of 2020 and is expected to cost approximately US$25 million. The second phase would be for the development of New Ingerbelle, which requires capital of about US$23 million.

The after-tax net present value (NPV) (8%) of the integrated production plan for the Copper Mountain Mine, including both growth projects, is approximately US$619 million.

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