Copper Mountain Mining Corp.

In mining, you never really know for sure what is underground until you dig it up. Once you do, it is the company’s responsibility to ensure that production meets the goals that have been set. This was the challenge that Copper Mountain Mining Corp.’s CEO Jim O’Rourke faced as the mine ramped up to production near Princeton in British Columbia.

“2013 was an important year of our ramp-up to full production because we addressed our throughput issues and improved the operation significantly,” O’Rourke points out.

The company began fast-track construction of the Copper Mountain mine, processing facilities and related infrastructure in April 2010. All development activities were completed by June 30, 2011 when the mine commenced production on schedule.

“Our main issues have been both operating time in the plant and also the throughput through the mill facility,” O’Rourke explains. “We budgeted 92 percent operating time. Throughout the year, we made a number of improvements and changed suppliers of wear parts that failed prematurely. As a result, December’s average was 95 percent operating time. So we’ve had about five months now where we’ve been averaging around our budget. So operating time, we believe, has been resolved and is no longer an issue.”

During the first quarter of 2013, the mine produced 14.2 million pounds of copper. This rose to 18.6 million pounds in the fourth quarter, which represents a 31 percent increase over the year. In December alone, the mine produced 6.8 million pounds of copper. The Copper Mountain mine has continued to improve its operations since startup.

Cruising for a Crusher
The next challenge was the coarseness of the feed. “Early on in 2013, we mounted a camera on the conveyor that feeds the sag mill, which provided us with a 3-D image of the particles entering the SAG mill,” O’Rourke continues. “We had a mathematical iteration such that we get the sizing of the material going into the mill on an instantaneous basis. The information it provided us was very enlightening. As a consequence, we made a number of changes to provide a finer feed to the SAG mill that resulted in improved throughput.”

This included utilizing three portable crushers to crush the ore from the primary crusher that is minus 6-inch size to minus 2-inch material, which improved the number of tonnes the facility could process daily. Throughput increased from approximately 25,000 tonnes per day during the first quarter of 2013 to an average of 32,700 tonnes daily in December, a 30 percent improvement.

“Our target design milling rate is 35,000 tonnes a day,” O’Rourke points out. “Engineering studies have confirmed that we need a permanent secondary crusher to allow us to achieve the design target or better.” Plant operating results with minus 2-inch material have confirmed that the mill can operate consistently at its design capacity of 35,000 tonnes per day or better.

The total cost of construction for the permanent secondary crusher is estimated to be approximately $40 million. Construction started in December 2013 and is expected to be completed by midsummer 2014. One piece of the crusher weighs nearly 100 tonnes.

“So they are very big castings,” O’Rourke stresses. “The majority of the big castings were coming from Romania and being shipped to Halifax and then trained across Canada and brought to the mine from the train terminal by truck.” The mine is nearly 300 kilometers east of Vancouver in a semi-arid climate of rolling hills.

The Copper Mountain mine has been put into production as a new mine. O’Rourke estimates the company has approximately $120 million worth of mobile equipment – such as huge trucks with tires 12 feet in diameter – to move ore from the open pit to the primary crusher. The crushed ore is conveyed about a kilometer to the coarse ore stockpile, where it is stored prior to being conveyed to the SAG mill for size reduction by grinding. The mine also has a new five-bay truck shop with a 50-ton overhead crane to handle the 240-ton capacity trucks and a mobile crane with a 275-ton capacity for assembling the trucks. The trucks are so big, they were not allowed to be driven or transported over roads but must be shipped in several pieces and assembled onsite.

Super Pit
Three pre-existing open pits that were mined throughout the 20th century are being combined into one larger and deeper merged pit. The mine has a brand-new mobile mining fleet and uses conventional crushing, grinding and flotation to produce copper concentrates with gold and silver credits.

The mine processing plant will process the higher-grade ore in the first 12 years and send the lower-grade material to stockpiles for blending and processing later in the mine’s life. The facility is operating 24 hours per day, 365 days per year with a 92 percent mechanical availability including prescheduled downtime for equipment maintenance, the company says.

Copper Mountain Mining Corp. has a strategic alliance with Mitsubishi Materials Corp., which owns 25 percent of the mine. Mitsubishi has an off-take agreement with Copper Mountain Mining to purchase all of the project’s concentrate at London Metal Exchange metal prices at the time of settlement.

The Copper Mountain mine has an 18,000-acre land package with multiple prospective targets. In 2008, the company succeeded in finishing one of the largest drill programs in British Columbia of 106,000 meters. This increased the resource by 45 percent to 5 billion pounds of copper at the Copper Mountain mine.

“We have a 17-year mine life as we now know it,” O’Rourke declares. “However, we have very good exploration potential, and we have some drilling down below the pits, which pretty well confirms that the mineralization does continue at depth at this point.”

That mineralization will enable the three existing pits to be joined into a new merged pit, known as the “Super Pit,” over approximately the next 10 years. A portion of this new Super Pit currently is open to the north, southeast, northwest and at depth.

Precious Metals
The Copper Mountain mine produces a significant amount of gold and silver along with copper. O’Rourke estimates that approximately 10 percent to 20 percent of the company’s revenue is from precious metals. “The precious metals are definitely an important part of the operation,” O’Rourke emphasizes. “They pretty well pay for all of our offsite costs, such as transportation and smelting charges. So precious metals are very important to us.”

The concentrate produced at the mine contains approximately 26 percent copper. It is filtered down to 8 percent moisture so it is a powdery material with the consistency of salt that is shipped by truck to the port of Vancouver. There it is stored and loaded onto vessels that deliver it to two smelters in Japan owned by Mitsubishi for treatment and sale.

The metallurgical process in the mill at Copper Mountain is primarily physical rather than chemical. It does not use acids or other materials that are hard to dispose of safely. “We add a chemical which acts like a wax and preferentially coats the copper minerals,” O’Rourke explains. “We agitate the solution with the finely ground rock and we add alcohol to make bubbles. The copper minerals stick to the bubbles and float to the surface, and we take it off, filter it and ship it.” The main byproduct is sand that settles out in the tailings pond from the ground rock in the water.

A Strong Team
O’Rourke oversaw operations at Copper Mountain while he was president and CEO of Princeton Mining from 1988 to 1996. When copper prices decreased, the Copper Mountain mine became uneconomical to operate, and O’Rourke moved on to develop the Huckleberry Mine near Houston, British Columbia.

However, he remains on the board of directors of Compliance Energy Corp., which had bought the Copper Mountain mine to build a new coal-fired power plant. He kept an eye on the Copper Mountain property, and when British Columbia banned new coal-fired power plants, it became available. So he put together a team of associates and brought it onstream with the assistance of Mitsubishi.

“I think we have an exceptional team we formed in 2007,” O’Rourke says. “A number of the people had worked there before and were very happy to come back to that area. The mine is approximately 20 kilometers from the town of Princeton, which is accessed by a paved government road. So it’s ideal for the mining community.

“The employees can all be home at night with their families,” he points out. “Princeton is a very attractive small town of only about 3,000 people, but it is right on the border of the Okanagan Valley in British Columbia, which is an area of orchards and wineries only about one hour away. It’s also three hours from Vancouver. It’s a very nice town.”

Everything a Mine Needs
Because of its mining history, the Copper Mountain mine has an existing infrastructure nearby that it requires. The mine is on the government’s BC Hydro electrical grid.

“We have excellent power facilities, and with regard to water, we are adjacent to the Similkameen River,” O’Rourke says. “We have our freshwater source on the river and grandfathered rights for all the water we need. Also, because we’re just grinding rock, adding water to it and floating out the minerals, we reuse our water. We only utilize freshwater to the extent that we have a loss through evaporation and seepage.”

The mine is at the height of land with considerable amounts of limestone rock so seepages of water running out of the facility are not a problem. “We have minimal discharges from the site, so environmentally it’s very attractive,” O’Rourke maintains.

Because the mine was a brownfield site, an environmental assessment and permits for the mine were in place for the previous operation. An agreement was negotiated with the local First Nation, which includes approximately 20 percent of the workforce being members of First Nations.

O’Rourke, who was inducted into the Canadian Mining Hall of Fame last year, attributes the success of being able to finance the Copper Mountain mine to Mitsubishi, whose commitment enabled the company to obtain 75 percent of the $438 million capex it needed to open the mine. “We hold a Mining Day in the town of Princeton every year,” O’Rourke explains. “We are in a great jurisdiction for mining. Our government is extremely supportive.”