June/July 2011

Present perfect for past producer

By Correy Baldwin

The haul fleet at the Copper Mountain Mine is comprised of thirteen 240-tonne Komatsu trucks | Photo courtesy of Copper Mountain Mining Corporation

In October 2008, the management of Copper Mountain Mining Corporation (CMMC) announced the firm was restarting operations at the former Similco mine site, 20 kilometres southwest of the town of Princeton, in southern British Columbia. Today, the Copper Mountain project has moved into the pre-production mining phase and is on schedule for full production startup this summer.

When CMMC took over the site, it was a returning home of sorts for CEO Jim O’Rourke. O’Rourke is former president of Princeton Mining Corp., which operated the Similco site through much of the 1990s after purchasing it from Newmont Mining Corporation in 1988. At the time, Newmont was shifting its focus to its gold assets in Nevada, and concluded the Similco Mine only had a year or two of life left. O’Rourke thought otherwise. “We had some ideas about extending its life,” he says. Princeton Mining Corp. went on to continue operations for another eight years.

By the mid-1990s, however, copper prices had dropped to US$2,090 per tonne. Faced with falling metal prices and rising production costs, combined with an increasing need for additional capital reinvestment, the mine was forced to close in late 1996.

It would be another 10 years before the economic climate would improve enough to start thinking about restarting operations. It was a long wait, given the resource base at the site. “We believed there was more copper there, we just had to prove it,” says O’Rourke.

Critical timing

Today, copper prices have risen to over US$8,500 per tonne, and demand is outpacing supply. This is, in fact, an ideal time for the Copper Mountain project to be going into commercial production.

“An economic downturn is a good time for a company to begin construction since you have access to cheaper steel and labour and lower metal prices,” explains Galina Meleger, manager of corporate communications for Copper Mountain. “This produced some cost savings for the project.”

The site itself provided another major advantage to the Copper Mountain project: a significant amount of existing infrastructure remained on site from previous mining activity. This helped reduce startup costs (to a relatively low $438 million) and generally helped the construction phase go smoothly. Several previous permits were still in place as well, including a B.C. mines act permit, a waste management act permit, and a water license, but the company still had to get a permit amendment, which took a year and a half.

“As a former mine site, Copper Mountain was able to take advantage of significant infrastructure in place that supported an open pit mine,” says Rod Shier, CFO of CMMC. “Both power and water were also available on site. The property is connected to a provincial power grid via a 138 KV transmission line. The previous mine operation used water pumped from the Similkameen River and the water license remains in good standing: ample to support an operation in the 25,000 to 50,000 tonnes-per-day range. And years of previous geological data allowed Copper Mountain to advance more quickly than most. One of the important benefits of being a past producer is that there are few surprises.”

O’Rourke agrees. “It’s a great site. Right at the outset we had power, light, heat, water – everything available to us, unlike you would have at a greenfields site. And the town is so close that we’ve had no need for a camp.”

Page 1 of 3. Next
Post a comment


PDF Version