News Leader News for August 05, 2008
MINE TO REOPEN in '10
Copper Mountain Mining Corporation (CMMC or the Company) announced July 28th results of a positive independent Feasibility Study Report (Feasibility Study) on the Company's 100% owned Copper Mountain project located near Princeton.
The Feasibility Study was prepared by Hatch Ltd. (Hatch), together with other consultants, and describes the scope, design features and economic viability of bringing back into production a conventional open pit mine with a 35,000 tonnes per day mill. The mine, a former producer, is designed to produce approximately 100 million pounds of copper per year in a copper concentrate with gold and silver credits. The capital cost is estimated at $402 million (excluding a $35.4 million contingency allocation) with production scheduled to commence at the end of 2010. The project would create 274 permanent jobs over an initial 15 year mine life.
The Feasibility Study considered a Base Case that used the London Metal Exchange (LME) forward pricing as of June 18, 2008 for the first three years and then a long term copper price of US$1.80 for the balance of the mine life. Gold and silver long term pricing used was US$675/oz and US$12/oz respectively. All amounts are in Canadian funds unless otherwise stated.
Base Case Highlights
Metal Production
Years 1-5 - 480,949,000 lbs. Copper, 138,856 oz. Gold and 1,478,041 oz. Silver.
Years 6-10 - 469,823,000 lbs. Copper, 137,128 oz. Gold, 1,523,293 oz. Silver.
LOM (15 Years) - 1,119,202,000 lbs. Copper, 339,292 oz. Gold, 3,562,159 oz. Silver.
Total Operating Costs (US$/lb net of Ag/Au Credits)
Years 1-5 - US$ 1.28
Years 6-10 - US $1.13
LOM (15 Years) - US $1.27
Pre-Tax Payback (years) 2.7
Pre-Tax Internal Rate of Return (%) 20.2%
Pre-Tax NPV at 5% discount rate:
$263 million
John O'Rourke, Chief Executive Officer of Copper Mountain stated: "This positive Feasibility Study is a material step forward for the Company in the restart of this past copper and precious metals producer. The Feasibility Study describes the development and operations plan that successfully combines long-term commercial viability with responsible environmental stewardship. The production start at the end of 2010 meets our initial target and equipment deliveries have been arranged to match this schedule. We are pleased with the Feasibility Study results and are particularly encouraged by the 2008 exploration drill results which are expected to further improve the mine plan. The company plans to continue an aggressive drilling program to increase the grade and tonnage within the Super Pit while continuing to test the Titan 24 geophysical targets for new discoveries." Mineral Resource and Mineral Reserve
The Copper Mountain copper-gold-silver porphyry deposits contain a Measured and Indicated Mineral Resource of 260.2 million tons averaging 0.357% Cu containing 1.8 billion pounds copper. The Feasibility Study is based on this resource which was prepared by Giroux Consultants Limited and includes drill data up to December 20, 2007. The NI 43-101 compliant Mineral Resource estimate used data from approximately 450,000 meters of drilling in more than 5,000 drill holes. The Company employs a system of quality control for drill results which includes the use of blanks, certified reference material (standards) and check assaying. Core is logged on site and split with a diamond saw. Samples are shipped to Pioneer Laboratories for geochemical analysis of copper with all values of greater than 1,000 ppm copper being re-analyzed by assay methods for copper, gold and silver. The drilling program is being supervised by Peter Holbek, M.Sc., P.Geo., a qualified person as defined by National Policy Instrument 43-101. Capital Cost
The capital cost is estimated at $437.4 million, including a $35.4 million contingency, in June 2008 Canadian dollars with no allowance for price escalation or fluctuations in currency exchange rates and has been estimated with an intended level of accuracy of +/- 15%. All cost estimates and other financial projections referenced in this Press Release are subject to important qualifications, assumptions and exclusions, all of which are detailed in the Feasibility Study. Therefore, in order to fully understand the estimates and projections set out above, the Feasibility Study should be read in its entirety.
The capital cost breakdown is noted below:
Capital Costs
Description $(000s)
Direct Costs
Mining preproduction Development - 96,301
Crushing Conveying - 28,855
Processing - 166,304
Tailings Water Supply - 22,043
Plant Site Infrastructure - 18,056
Total Direct Costs - 331,559
Indirect Costs
Owners Costs - 11,355
Construction Support - 7,007
EPCM - 52,088
Total Indirect Costs - 70,450
Total Direct and Indirect Capital Costs - 402,009
Contingency - 35,400
Total Capital Costs with Contingency - 437,409
Production
The open pit mine design is based on processing 35,000 tonnes per day of mill feed and producing a copper concentrate containing gold and silver. The initial five year average grade of mill feed is 0.39% Cu (0.43% Cu Equivalent) resulting in an average annual production of 96 million pounds copper for the same period. The lower grade material (below 0.25% Cu) will be stockpiled for processing towards the end of the mine life. The average waste to ore ratio for the life of mine is 1.8:1. Metallurgical testing indicates a recovery of 89.2 percent for copper, 65 percent for gold, and 49 percent for silver. Metallurgical test results were comparable to the operating results reported from prior operations.
The resource model that formed the basis for the Feasibility Study is based on drill data up to December 20, 2007. The 2008 drill data will be applied to the resource model and mine plan as available with the objective of maximizing the copper production in the first five years. Operating Costs
The Life of Mine (LOM) mine operating cost is estimated at $7.31 per tonne of ore milled.
Operating Costs
Description $/tonne Milled
Mining (including waste) - $3.52
Processing - $3.54
General and Administrative - $0.25
Total Operating Costs - $7.31
Operating costs have been calculated based on June 2008 dollars and the labour costs used are in the upper quartile of wages paid at B.C. mines. Operating costs are estimated at US $1.28/lb Cu (net of gold and silver credits) in years 1 to 5, US $1.13/lb Cu (net of gold and silver credits) in years 6 to 10, and US $1.27/lb Cu average (net of gold and silver credits) for the life of mine.
Economics:
Economic modeling results are based on commodity prices in U.S. dollars with all other values in Canadian dollars. The long-term US/Canadian exchange rate used in the Feasibility Study was 0.95. The Base Case metal prices used are those from the June 18, 2008 London Metal Exchange forward prices to 2013 (2011 US $3.18/lb Cu, 2012 US $3.06/lb Cu, 2013-US$2.94/lb Cu) and US $1.80 per pound copper for the balance of the fifteen year mine life.
Feasibility Study
Recommendations:
In the Feasibility Study Report Hatch advises CMMC that in Hatch's opinion, the Project is technically feasible and the Feasibility Study provides sufficient basis for CMMC to refer the Project to its Board of Directors to make a decision respecting the further development and construction of the Project. Infill drilling is recommended within the ultimate pit to upgrade inferred resources that are currently scheduled as waste as per NI 43-101 regulations. The NI 43-101 Technical Report for the Copper Mountain Feasibility Study Report will be filed on SEDAR with 45 days of the date of this news release.
About Copper Mountain Mining Corporation:
CMMC is a BC resource company, that on June 29, 2008, celebrated its first anniversary as a public company.
The Company owns 100% of the Copper Mountain Project located 15 kilometres south of the town of Princeton. The Company filed an Independent 43-101 Technical Report pertaining to the interim resource estimate and has completed a video presentation on the Copper Mountain Project, all of which may be found on the company's website.
Copper Mountain Mining Corporation's shares trade on the TSX Venture Exchange under the symbol CUM and additional information is available on the Company's web site at
www.CuMtn.com.
THE OFFICIAL COMMUNITY PLAN
The plan begins with an overview of the community. The population served decreased slightly in 2001, and gained slightly by 2006. We are aging
The biggest change was in the age of the townspeople. There was a 25 percent decline in children aged 0 to 14, and a 17 percent drop in youth aged 15 to 24. The biggest decline was a 40 percent drop in the number of people aged 25 to 44. An 18 percent increase occurred in the number of people aged 45 to 64, and a huge gain, 38 percent, in those over age 64. More homeowners
More Princeton people own their homes than the provincial average. Seventy-one percent of Princeton residents live in their own homes, compared with 49.2 percent for the province.
Goal of the plan
The first goal of the plan is to foster a healthy community. Guiding principles Small town character Council is committed to promoting a thriving, family-oriented community by encouraging activities that contribute to Princetons small town ambiance and character and by facilitating a compact, walkable town centre.
Connections
Council is committed to ensuring Princeton has transportation on a local, regional and provincial level. At the local level, Council has a priority of allowing people of all ages and abilities to move seamlessly between neighborhoods, town centre, green spaces and community facilities through street and trail networks.
Land use
Council will encourage high quality development that contributes to the livability of the community where a variety of lifestyles, housing, economic and cultural opportunities are available.
Council will ensure Town infrastructure (roads, sewer, water, stormwater, etc.) is well-maintained and reliable, and ensure new growth is supported by high quality infrastructure.
Visual quality
Council recognizes the importance of preserving the visual quality and aesthetics of Princeton. This will be achieved by promoting community enhancement, encouraging compatibility of new development and redevelopment, facilitating a cohesive, attractive town centre and preserving views of open spaces.
Healthy living
Council will promote healthy, active living for all ages and incomes to enhance the lifestyle of every resident. Environment
Council will promoted clean air and "green" development, and protect environmentally sensitive areas and ecosystems.
Local economy
Council is committed to investing in economic growth to promote a diversified economy providing opportunities for skilled workers and professions. Protection
Council is committed to enhancing public safety, crime prevention and emergency response.
Citizen involvement
Council will promote opportunities to encourage meaningful and ongoing community involvement in decision-making and setting direction for our future.
Culture and heritage
Council will continue to seek opportunities to enhance and showcase what is special about Princeton's history including our First Nations people as well as other cultures.
Each of these goals is linked to a set of "how to do it" outlines. The News Leader will feature more of these in coming editions.
MINISTRY SAYS WATER LEVELS ARE LOW
Weather across British Columbia over the past six weeks has been variable. For the northern two-thirds of the province, periodic storms brought rain, but total precipitation was slightly below normal.
The far northeast received above normal rainfall, but across most of the Southern Interior, the south coast and Vancouver Island, amounts were negligible to slight.
Temperatures across the southern Interior have been generally above normal, with infrequent cloud cover and well above normal hours of sunshine. The drier, warmer weather of the last few weeks has resulted in below normal river levels throughout much of the southern third of the province.
A change in the prolonged dry weather occurred this week. A frontal system moved onto the British Columbia south coast and central coast, resulting in moderated temperatures and widespread light rainfall across Vancouver Island, the south and mid coasts, and across portions of the central Interior.
Most rivers in the southern Interior are below their median water levels for this date, but have stabilized with the moderated temperatures. The majority of rivers with water level gauges are at low levels seen on average once in five to ten years. Most rivers on Vancouver Island and the south coast appear to be near or above their normal water level for the end of July.
Current river levels:
- The Granby and Kettle rivers (Westbridge, Midway, Grand Forks) are at five to ten year low flows.
- Camp Creek (Summerland), Salmon (Salmon Valley), Nicola and Coldwater rivers (Merritt) are a five to ten year low flows.
- The Tulameen and Similkameen rivers (Hedley, Princeton) are near five year low flows. - Penfold Creek and the Horsefly River are near five year low flows. - The Bulkley River (Smithers) is near a five year low flow.
Weather forecasts indicate a sustained frontal system for the next few days, with periods of at least light rain across the south and mid coast and the southern Interior. Forecasts suggest warm and dry weather will return by early August. River levels across the southern Interior are currently below normal, but not yet at levels of concern. Cooler temperatures and rainfall this week will be very beneficial, depending on the amount of rain received in individual river basins. However, if warm, dry weather in early August continues, river levels will begin to drop again.
This summer, Environment Minister Barry Penner urges all British Columbians to help conserve our precious water resources. In June, the BC government released Living Water Smart: British Columbia's Water Plan. The plan highlights the need for new conservation measures to ensure adequate supplies of fresh water for British Columbia's future.
Details can be found at: www.livingwatersmart.ca.
