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REFILE-PDAC-Canada's Terrane plans to spin-off Berg project
March 9, 2010 / 5:08 AM / 8 years ago

REFILE-PDAC-Canada's Terrane plans to spin-off Berg project

* To focus on development of Mt. Milligan project

* Sees production from Mt. Milligan by 2012

* Exploring various avenues for funding Mt. Milligan (Refiles to clarify headline)

By Euan Rocha

TORONTO, March 8 (Reuters) - Canadian exploration company Terrane Metals Corp TRX.V is focusing on becoming a junior gold producer and plans to spin-off its Berg copper-molybdenum project, Chief Executive Rob Pease said on Monday.

“We are going to try and position Terrane as a gold company, as gold companies get premiums in the market,” said Pease, while speaking along the sidelines of the PDAC mining convention in Toronto.

Pease expects the spin-off of Berg, located in the western Canadian province of British Columbia, to occur within this year.

Terrane is focused the development of its Mt. Milligan copper-gold project, which is also located in British Columbia. The project, over a 22-year mine life, is expected to produce almost 200,000 ounces of gold and 80 million pounds of copper annually.

Terrane, which is majority owned by Canada’s Goldcorp (G.TO), expects capital expenditure costs of C$915 million to develop the Mt. Milligan project, with full production expected by the end of 2012.

Pease said the company is looking at numerous ways to fund the development costs.

“We are going to talk to the equity markets and may do something there. We are also analyzing the possibility of going into some copper and/or gold stream sales as part of our financing,” said Pease, in an interview with Reuters.

“We have down a lot of work on project debt already that is well advanced. We are hoping to supply a lot of financing from the debt side,” said Pease, who indicated that as much as 50 to 60 percent of the project’s development cost could be funded by debt markets.

The PDAC convention, organized by the Prospectors and Developers Association of Canada, is the largest industry gathering of its kind, drawing more than 20,000 participants this year as global metals demand promises to hold steady and the world emerges from economic crisis. (Editing by Lincoln Feast) (euan.rocha@reuters.com; Reuters Messaging: euan.rocha.reuters.com@reuters.net; 416 941 8185))

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