TORONTO (miningweekly.com) – British Columbia-focused Copper Mountain Mining this week said it had engaged an engineering firm to review the option of adding a secondary crusher to its eponymous operation to pre-crush ore entering the semi-autogenous grinding (SAG) mill, in order to increase the tonnage throughput.

The company, which reported its fourth-quarter and full-year earnings on Monday, said although production had increased, the mill was still experiencing challenges meeting its nameplate capacity, as a result of the variability in ore hardness and fragmentation entering the SAG mill from various openpit locations.

Designs for this secondary crusher involved ore conveyed from the coarse-ore stockpile to the new crushing facility, where it would be crushed to 50% minus one inch. The company said initial estimates indicated the pre-crushing would result in an expansion to the grinding capacity and would ensure the mill met the original design capacity, while adding potential to increase the grinding capacity of the SAG to about 40 000 t/d.

The company said preliminary work estimated the crushing facility would cost about $40-million and would be funded out of cash flow or additional debt.

Laurentian Bank Securities equity research analyst Christopher Chang said while Copper Mountain could fund the $40-million (on a 100% basis) secondary crusher from internal cash flows, he believed the company would likely secure debt from its joint venture partner.

“This would keep the company’s balance sheet well insulated against prolonged operating hiccups and a meaningful decline in copper prices,” the analyst said in a note to clients.

The company expected the new crushing facility to be in place by the end of the year, subject to necessary shareholder approval to proceed before the end of April.

The miner added it was also testing various blasting techniques to improve ore fragmentation that had to date proved positive.

The company reported mill production was negatively affected during the year by greater-than-expected tailings line wear, failure of the ball mill's motor controls, a lack of clear reclaim water in the tailings management facility, and the premature breakage of SAG mill grates.

Following the planned mill maintenance shutdowns throughout the year, the company was able to resolve all of these issues by year-end, and early this year for the first time achieved a 93.3% plant availability, compared with a budgeted 92% availability.

Q4 RESULTS

For the fourth quarter ended December 31, the company produced 13.78-million pounds of copper, an 11.2% increase year-on-year.

The company recorded a 12% year-on-year rise in revenue at C$50.08-million for the quarter, derived from the sale of 13.18-million pounds of copper, 5 200 oz of gold and 71 600 oz of silver.

For the full year, the Copper Mountain mine produced 57-million pounds of copper, 18 900 oz of gold, and 354 000 oz of silver, which generated C$229-million in revenue net of pricing adjustments. The total cash cost of copper sold for the year ended December 31, 2012 was $2.32/lb of copper after gold and silver by-product credits.

The company’s gross profit for the quarter was C$6.23-million, a 12.6% increase on the C$5.53-million recorded in the same quarter of 2011.

Adjusted earnings for the quarter were $2.5-million or 2 Canadian cents a share, which was in line with the average analyst consensus.

Copper Mountain's flagship asset is the 75%-owned Copper Mountain mine, which started production in the summer of 2011, and is located in southern British Columbia, near the town of Princeton. The company has a strategic alliance with Mitsubishi Materials, who owns the remaining 25%.

Since the start of the year, the company’s Toronto-listed stock had declined by 25% in value. On Tuesday, stock were down 7.37% to C$2.89 apiece.