Copper Mountain Mining (CUM-T) has raised $34.5 million that it will use to pay its 75% share of working capital for its copper porphyry project in southeastern B.C.
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 priced at $3.05 apiece. 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 copper mine and produce more than 100 million lbs. copper per year plus gold and silver credits.
Operated from 1972 to 1996, the project produced 1.74 billion lbs. copper, 9.1 million oz. silver and 730,000 oz. gold.
Copper Mountain bought 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 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 20 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’s shares were $2.14, trading within a 52-week range of 56¢-$3.58. The company has 88.6 million shares outstanding.
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