Curis Resources (TSE:CUV) has a number of significant milestones to look forward to for its Florence copper project in Arizona over the next year, with the miner almost done wrapping up the permitting process for phase 1 operations at the site.
The company's CEO, Michael McPhie, says two primary operating permits
are required for phase 1. BHP Copper, the previous owner, secured full
commercial operating permits for the project back in the late 1990s,
and since that time Curis has been working with state and federal
agencies to amend and update these for current operations.
The junior miner has already secured critical air, land and water
permits for the project and the remaining state and federal permits for
phase 1 are expected in the near term.
"It's really quite an exciting time for us," says McPhie. "We're
trying to keep our heads down and get the final steps completed so we
can begin construction in the weeks ahead."
The project, which is located in Central Arizona, hosts a measured
and indicated oxide copper resource of 429 million tonnes grading 0.33
percent copper at a cut-off of 0.05 percent. It was previously owned by
BHP Copper, who received all major operating permits necessary for
commercial production of copper by in-situ recovery methods in 1998.
Once the updated state Aquifer Protection Permit (APP) and the
federal Underground Injection Control (UIC) permits are approved in
the coming weeks, Curis can develop a 24 well injection and copper
recovery system and a "state of the art solvent extraction
electro-winning plant" - otherwise known as phase 1 operations - with
this production test facility (PTF) phase expected to last 18 months.
McPhie says that Curis had a public open house two weeks ago with
regards to the state permit approval, which went "very, very well", with
"lots of support shown from the community".
Construction of the in-situ copper recovery (ISR) well field and
plant is anticipated to start in the third quarter, following the
expected permit approval sometime this summer, with initial copper
cathode production slated for early 2013.
McPhie notes that none of the permits needed are environmental
assessments, with air and water approvals already in place. Curis holds
sufficient water rights for its flagship copper property, which allows
the company to utilize groundwater for in-situ copper recovery. As the
majority of water used at Florence will be recycled, actual use of water
is low in comparison to surrounding agricultural and related
There are two key factors that limit the water used in the
deposit-area. The first is a 20-40 foot thick impermeable clay layer
within the overburden about 60 to 100 feet above the top of bedrock that
contains the copper. This layer acts as an aquitard, preventing
groundwater in aquifers above and below the layer from mixing, and helps
protect the groundwater that is used for other purposes. Secondly, the
copper extraction method involves pumping a mildly acidic solution
through highly engineered wells hundreds of feet below surface into
rocks that are naturally fractured. The copper-bearing solution is then
recovered through a series of recovery wells and an inward hydraulic
gradient is created that controls solution flow.
This process requires no movement of rock or overburden. There is
therefore a substantially smaller footprint, with much less of an
environmental impact on the surrounding area than with more traditional
open pit mining operations. The technique also requires substantially
less mechanical energy in the form of trucks and explosives, and
therefore generates significantly lower operating and capital costs.
The company is already in the mode of hiring people for the phase 1
development program, and has made purchases relating to long lead-time
items for copper processing facilities.
Construction for this phase is due to start in early September.
Though several million pounds of copper is expected over the life of
the phase 1 program, McPhie says the 24 wells are relatively small in
context of a full commercial operation, and the primary focus of the
first phase is the "optimization and refinement of the development
"Our aim is to further prove up all the engineering and environmental
safeguards through the phase 1 program, with the intent to begin
development of the commercial plant facility and well field, referred to
as phase 2, by the end of 2013."
According to the latest timeline, the company could begin full
commercial production by early 2015, after which it expects to produce
between 55 and 84 million pounds of copper per year.
Curis anticipates having phase 2 commercial scale operating permit
approvals well before it is ready to begin construction in late 2013, as
the phase 2 permits will "really just be an extension of permits
already in place."
With regards to financing its plans, the company recently secured a
$40 million loan for its ISR copper project in Pinal County with the Red
Kite Group, an international finance group based in New York.
This funding is sufficient to finance phase 1 development and
operations, with McPhie anticipating Curis will be looking to secure
full project financing for commercial scale development in mid 2013.
The feasibility study for the property is targeted for the first
quarter of 2013, well ahead of the requirement in time for the start of
phase 2 operations later next year.
"This gives us more than a year to publish the study and secure
financing. We're in a strong cash position for development over the next
year and a half," asserts McPhie.
So far, the company has received interest from "quite a large number
of banks from Europe, Asia, US and Canada" that have come to tour the
"We're going to take our time in selecting our consortium of banks -
it's about finding the optimal mix of partners that will be with us for
the long term.
"Based on a 2010 preliminary economic assessment¹, Florence has one
of the lowest cost copper projects in the markets today with cash costs
of well under one dollar a pound, and capital costs in the $200 million
"This is quite attractive at a time when capital costs in the mining
sector are skyrocketing and we are seeing a lot of interest because of
The banking route is just one option for Curis, as McPhie says the
company is also considering opportunities for partnerships with
businesses looking to use copper, as well as equity financing.
In addition to enhancing capital costs, a new high voltage power line
put in by the state of Arizona a couple of years ago that traverses the
west side of the property could assist the project’s operating costs.
The asset is also close to a railway, has an "abundance" of water,
and is referred to as a well-understood deposit with more than 500,000
feet of drilling. The project rests just 70 miles north-northwest of
Tucson, and 65 miles southeast of Phoenix.
"When compared to other projects in more remote areas of North and
South America everything is here within 500 metres of our doorstep,"
says McPhie, adding that the presence of the extensive infrastructure
lowers capital costs and makes the project a "significant opportunity".
The company's CEO is focused on optimizing the development plan and
at the same time, being "respectful of its neighbours", with a big part
of the planning aimed at minimizing its footprint on the ground and
building an efficient operation.
Rather than focusing on expanding the size of the resource, which is
already quite large, Curis is taking the approach of focusing on
metallurgy and getting more copper from what is already there.
McPhie says there is room for improvement in the commercial scale
production forecast, with copper recovery for its Florence project in
the PEA assumed at 49 per cent, which is "very conservative" compared to
the previous work done by BHP that predicted this would be the minimum
If recoveries can be improved, the same amount of effort will be put
in, but the miner will be able to get more copper out of the ground at a
"There is slightly less than 3 billion pounds of copper in the
measured and indicated category, and we're only taking advantage of less
than half of the deposit as it currently stands in our economics," says
"There is more than enough resource at Florence for a 20 year mine,"
he concludes, adding that his focus remains "thoughtful and sustainable
Indeed, for every percentage increase of copper recovery, higher
revenues will be generated from the project, which has an estimated
after-tax net present value of $360 million at a 7.5 per cent discount
rate and a $2.50 per pound copper price.
The completion of the permitting process is something McPhie hopes
will please investors, creating a "tremendous value creation
opportunity" for the months ahead. Shares of the company are currently
changing hands at 46 cents on the Toronto Stock Exchange.
 See Curis news release dated November 25, 2010