Augusta moves closer to decision on Rosemont Copper

The preliminary draft Environment Impact Statement on Augusta Resource‘s (AZC-T, AZC-X) Rosemont Copper project near Tucson, Ariz., has been delivered by the Coronado National Forest to Arizona State and local cooperating agencies, bringing it “one major step closer to the record of decision,” the junior said.

“The record of decision for the Rosemont Copper project appears on track for January 2012 and in-line with previous U.S. Forest Service guidance, allowing for a 90-day public comment period after the publication of the draft EIA in August 2011,” the company stated.

The news, released on June 1, lifted the company’s shares by 8% or 32¢, to close at $4.50 on June 2.

Augusta’s 100%-owned Rosemont deposit is expected to produce 221 million lbs. copper a year, which the company says could account for 10% of all copper output in the U.S. In addition to copper, Rosemont is expected to produce silver and molybdenum over a mine life of more than 20 years. 

As of January 2009, Rosemont had proven and probable reserves of 546 million tons grading 0.45% copper, 0.015% molybdenum and 0.12 oz. per ton silver in sulphide ore, and an additional 70 million tons at 0.17% copper in oxide ore. 

Production is projected in 2013, and with it the company ultimately hopes to become a “solid mid-tier copper producer.”

Once the permitting process is complete, mining analysts like Orest Wowkodaw of Canaccord Genuity see Augusta as a potential takeover target. “He likes the project and thinks it is undervalued given the project’s significant size, attractive operating costs and low political risk,” Canaccord said in a morning note to clients.

At presstime, the junior traded at $4.43 per share within a 52-week range of $1.30 (July 12, 2010) and $6.11 (March 3, 2011). The company has 142.6 million shares outstanding.