Highland Copper tables PEA for White Pine North

A preliminary economic assessment (PEA) of Highland Copper’s (TSXV: HI; US-OTC: HDRSF) White Pine North copper project in Michigan envisions a 25-year mine producing an average of 40,000 tonnes of copper per year.

The White Pine North project, 7.5 km south of Lake Superior in Ontonagon county, is an extension of the historical White Pine mine that operated from 1953 to 1995, during which time it produced 4.5 billion lb. copper at an average grade of 1.17% copper.

The mine closed in 1997, after which it passed through multiple ownerships before First Quantum Minerals (TSX: FM) acquired it in 2013. The following year, First Quantum Minerals sold the project to Highland Copper, which has until January 2020 to complete the acquisition.

The PEA estimates payable copper production of 1 million tonnes at life-of-mine cash costs of US$1.40 per lb., including royalties. Initial capex is pegged at US$457 million net of pre-production revenue of US$56 million and a payback period of 5.2 years. The PEA tables an after-tax net present value of US$416 million at an 8% discount rate and an after-tax internal rate of return of 16.8%.

Total indicated resources of the White Pine North deposit stand at 133.4 million tonnes grading an average 1.07% copper and 14.9 grams silver per tonne for 3.2 billion lb. contained copper and 63.8 million oz. contained silver using a cut-off grade of 0.9% copper. Inferred resources are reported at 97.2 million tonnes grading an average of 1.03% copper and 8.7 grams silver per tonne for 2.2 billion lb. contained copper and 27.2 million oz. contained silver using a cut-off grade of 0.9% copper.

The PEA envisions a conventional mechanized drill and blast room-and pillar mining method.

Highland Copper’s flagship project is its wholly owned Copperwood project in Gogebic County in the Upper Peninsula of Michigan, 23 km from the town of Wakefield and 40 km from the town of Ironwood.

The company’s major shareholders include Greenstone Resources (17.1%), Osisko Gold Royalties (15.7%) and Orion Mine Finance (14.2%). Institutional shareholders, management and directors and other shareholders hold 16%, 10% and 27%, respectively.

At press time, Highland Copper shares were trading at 4¢ per share with a 52-week range of 2.5¢ to 14¢. The company has 472 million common shares outstanding for a $19-million market capitalization.