(In U.S. dollars, unless noted)
TORONTO, July 28 (Reuters) - Copper Mountain Mining Corp CUM.V plans to spend C$402 million ($394 million) to revive a copper mine in British Columbia that it expects will produce nearly 100 million pounds of the metal per year, the company said on Monday.
The company said production at its Copper Mountain open pit mine should begin at the end of 2010 with a 35,000 tonne-per-day mill. The project would have an an initial mine life of 15 years, according to a feasibility study.
The news drove the junior miner’s shares up by nearly 6 percent.
The construction decision has not formally been approved by the company’s board of directors, but the company has already ordered equipment, said Don Graham, director of Copper Mountain’s investor relations.
The mine, located near Princeton, British Columbia, about 180 km (112 miles) east of Vancouver, has been owned by several companies over the past century, and last produced metal in 1996. The mine closures had been due to weak copper prices.
“Now, with copper up into the $3.60-$3.70 (per pound) range, this makes tremendous sense,” Graham said. “It’s a lower grade, but yet bulk tonnage deposit, and all the infrastructure is there. We’ve got the mining and environmental permits and everything.”
The company based its base-case assumptions on a long-term copper price of $1.80 per pound.
Copper for September HGU8 delivery was trading at $3.62 a pound on Monday.
Cash costs per ounce of copper over the life of the mine are seen at $1.27 a pound, when factoring in gold and silver by-product that will be used to offset costs.
The deposit has a measured and indicated resource of 1.8 billion pounds of contained copper.
Copper Mountain’s shares were up 8 Canadian cents at C$1.52 on the TSX Venture Exchange early on Monday afternoon.
$1=$1.02 Canadian Reporting by Cameron French; Editing by Peter Galloway