Imperial suspends open pit at Huckleberry in BC

VANCOUVER — Steve Robertson, spokesperson for Huckleberry Mines and vice-president of corporate affairs for Imperial Metals (TSX: III; US-OTC: IPMLF), says there’s value left in the ground at the open-pit Huckleberry copper mine, 88 km from Houston in west-central B.C., but the mine’s owners have  suspended operations to “preserve the resource” as copper prices deteriorate.

Imperial is a 50% shareholder in Huckleberry Mines and owner and operator of the mine site, while Japanese partners Mitsubishi Materials, Dowa Mining and Furukawa own the remaining 50%.

“The copper price has continued to drop, so the mine has operated at a greater and greater loss,” Robertson tells The Northern Miner during a phone interview. “But the mine carries no debt at this time, and that provides the flexibility to suspend operations and stay healthy, so the project can go back into operation when prices recover.”

Imperial says the partners mined an average 20,000 tonnes of ore per day since 1997 from the open-pit porphyry deposit, and there are enough reserves to last through 2022.

As of December 2014, total reserves at the mine stood at 42.2 million tonnes grading 0.3% copper, using a 0.2% copper cut-off.

The mine produced 33.6 million lb. copper over the nine months ending Sept. 30 in 2015, up 32.8% during the same period in 2014.

“Huckleberry is later in its mine life, so it’s a higher-cost producer. As such, there’s always an eye on cutting costs where possible, and we’ve worked on that for several months,” Robertson says. “But at this time we felt it was prudent to shut down the pit and allow the mill to process stockpile, which will give the company time to see if there’s any clear direction in the copper price, either upward or downwards.”

Robertson adds that there’s “enough stockpile to process for quite some time,” but predicts the company will reassess the operation in another 10 to 12 weeks.

“One of the things to keep in mind is that there’s been significant movement in the Canadian dollar over the past year,” he adds. “Those fluctuations buffered the drop in commodity price, and so the movement in the dollar will also have a big impact on the financial viability of the mine.”

Since January 2015, the London Metal Exchange’s three-month copper contract at press time has dropped 21.3%, or US$1,183, to US$4,367 per tonne, having touched its lowest level since April 2009.

The dramatic fall in metal prices has been largely driven by China’s slowing economic growth and falling currency, which dropped 5.7% against the U.S. dollar in the last six months.

In Canada, the loonie has fallen 22.9% to 0.72¢ against the U.S. dollar during the same time, weighted down by plummeting crude oil prices.

“There’s not a lot of flexibility in the operation at Huckleberry because it’s a large, low-grade deposit that doesn’t have a lot of heterogeneity,” Robertson says. “The big part of the story is that there’s still value, and by being responsible today, we can preserve the resource and exploit it at a future date for the benefit of the company, employees and the community.”