TORONTO (miningweekly.com) – Vancouver-based Western Copper on Thursday unveiled plans to spin out certain projects into two new, still-unnamed companies, which the firm says will allow it to focus on its flagship Casino copper/gold/silver/molybdenum project, in the Yukon.

The first spin-out firm, dubbed SpinCo A for now, will hold Western Copper's Carmacks project, in the Yukon territory, and the Redstone asset, in the Northwest Territories.

SpinCo B will be created to hold the company's Island Copper project, located on northern Vancouver island.

The decision was approved at a board meeting earlier on Thursday, and the company's shareholders are expected to vote on the proposal in the third quarter or early fourth quarter of this year, president Paul West-Sells said in an interview.

The company believes that the market will be better able to value the Island Copper project if it is a stand-alone firm, he said.

“We really believe it has the potential to be another Casino-like project,” West-Sells said.

“By spinning it out into its own entity, we will allow our shareholders to appreciate that much more.”

The rationale behind the Carmacks project is a little different, as Western Copper is hoping to receive permitting approval for the mine in 2012, West-Sells said.

“It really needs to have a dedicated management team with operational experience come in there. And this spin-out transaction allows us to facilitate that."

Western Copper was denied a water-use licence for the Carmacks operation last year, but said in March it was looking at potential changes to the operation to address environmental concerns, and had also filed a notice of appeal with the Yukon Court of Appeal.

The company had received all the other approvals it needed, including a construction licence awarded in April 2009, and has been working since then to get the water permit.

If the spin-out transaction gets regulatory and shareholder approval, current Western Copper shareholders will receive shares in both new companies in proportion to their holdings.

Western Copper will provide the two new firms with initial working capital and intends to seek listings for both companies on either the TSX or TSX-V.

The company said in April it would start preparations for a feasibility study on its flagship Casino project, after an updated prefeasibility study at higher output levels showed the project would be economically viable.

The company updated the prefeasibility after announcing a big resource increase in November last year, and is now looking at throughput of 120 000 t/d, compared with the previous 90 000 t/d.

The Casino project could produce 435 000 oz of gold, 234-million pounds of copper, 13-million pounds of molybdenum and 1.6-million ounces of silver a year in the first four years of operation.
 

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