Copper Mountain Mining (CUM-T) has raised $34.5 million that it will use to pay its 75% share of working capital for the Copper Mountain copper porphyry project in southeastern British Columbia.
The bought deal financing was co-led by underwriters Wellington West Capital Markets and BMO Nesbitt Burns, and the syndicate included Raymond James, Canaccord Financial and Jennings Capital.
The financing consisted of 11.33 million shares at a price of $3.05 per share. The underwriters also exercised an overallotment option of 1.47 million shares.
The project, 15 km southwest of Princeton and 300 km by highway from the port of Vancouver, is expected to reach full production by June 2011.
The company expects to develop the open pit mine and produce more than 100 million lbs. of copper per year with gold and silver credits.
The project is an open-pit copper mine that operated from 1972 to 1996 and produced 1.74 billion lbs. copper, 9.1 million oz. silver and 730,000 oz. gold.
Copper Mountain Mining purchased the property in 2006 and completed a feasibility study in 2008, which demonstrated a 20.2% pretax internal rate of return and a net present value of $263 million, using a 5% discount rate. The life-of-mine average strip ratio is 1.8 to 1.
The deposit’s proven and probable reserves total 211 million tonnes grading 0.36% copper for 1.7 contained lbs. of the red metal.
The deposit lies around and underneath three historic open pits that will become one huge pit over the next twenty years.
Last year Mitsubishi Materials bought a 25% interest in the Copper Mountain mine for $28.75 million, plus the right to purchase all of the mine’s copper production.
At presstime Copper Mountain was trading at $3.21 per share and over the last 52 weeks has traded in a 50¢-$3.58per share range. The company has 77.3 million shares outstanding.
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