TORONTO (miningweekly.com) – Newcomer Curis Resources plans to start initial production from its Florence copper project in Arizona as soon as 2012, and will ramp up to full capacity from late 2013, CEO Michael McPhie said in an interview.
The company raised C$38-million and completed a qualifying transaction to move onto the TSX Venture Exchange in November last year, but has still been trading as PCI-1 Capital Corp – the listed capital pool firm with which it completed a reverse takeover.
That will change soon, after the name change to Curis was formally approved on Friday, and McPhie said he expects the company will be trading under its new symbol, CUV, by around the middle of next week.
The company intends to graduate to the main board of the TSX by the end of the first quarter.
The last major owner of the Florence project was BHP Copper, which completed a prefeasibility study at the asset in the late 1990s and was awarded all the main operating permits, but put the project on ice when copper prices fell sharply.
Curis – the name is an acronym constructed from the chemical symbol for copper and a reference to the process the firm will use, 'recovery in situ' – falls under the Hunter Dickinson group.
The firm completed a preliminary economic assessment in October last year, and is working to amend and update the permits.
The plan is to essentially stick to the project outlined by BHP, McPhie said.
The 2010 PEA outlined an average design production rate of 76,5-million pounds of copper cathode a year, and initial capital costs were estimated at around $238-million.
Estimated direct operating costs of $0,68 a pound of copper recovered would put the company among the lower cost producers in the world, McPhie said.
“We think the economic fundamentals on this are pretty extraordinary,” he told Mining Weekly Online.
McPhie said he expects the company will be able to trim the capex number down by the time it publishes a feasibility study, which is scheduled for the third quarter of this year.
All the necessary permit approvals and updates should also be in place by the end of 2011, he said.
Phase-one mining will start on a smaller scale in 2012, and the company plans to build a temporary SX-EW plant at the same time to produce copper.
Once output is under way, Curis will then start construction on the full project, with full commercial production targeted for the end of 2013, McPhie said.
The initial plant will enable the company to optimise and refine its processes, which should result in a much shorter commissioning time for the full-scale operation, he said.
“We want to make sure that the copper that comes out is the highest purity London Metals Exchange-grade copper.”
The company has had some initial talks with bankers, but will probably start work in earnest to finance the project once the feasibility study is published, McPhie said.
It is still early days, but the funding package will likely be a mixture of project finance, some equity and some forward sales of copper production, he said.
McPhie's resume includes having worked as executive vice-president of Exeter Resource Corporation, president and CEO of the Mining Association of British Columbia and as a senior policy director with Natural Resources Canada.
He has put together a team that includes project development vice-president Mel Lawson, who has worked on projects around the world for more than 40 years, including for Rio Tinto and Newmont Mining, as well as John Kline, as senior project affairs advisor, who was project manager for seven years at the Florence project under BHP Copper. Kline also worked as project manager at BHP's San Manuel in-situ recovery mine in Arizona.
“So we've hired some real industry veterans,” McPhie commented.
The company expects to receive interest from bigger copper producers, “but ultimately we are intending to build and operate this project, and we've put a team together to do that”, he said.
The Florence project contains an estimated 429,5-million tons of measured and indicated copper oxide resources, grading 0,331% total copper and containing 2,85-billion pounds of copper.
There are also an additional 92,8-million tons of inferred resources, grading 0,267% total copper and containing 496-million pounds.
McPhie said the company is also looking to add more projects that would be amenable to in-situ recovery processing methods.
He said he'd like to add another development asset within the next year, and will focus on later-stage development projects.
Curis, trading as PCI-1, rose 3,9% on Friday, to C$2,69 apiece by 15:49 in Toronto. The company had a market capitalisation of C$151,2-million.