Thursday, 7 March 2013

Curis Resources says Florence town council vote has no "legal effect" on development plans for Arizona project

Curis Resources (TSE:CUV) has said that a recent vote by the town council in Florence - the location of the mineral explorer's copper project in Arizona - authorizing the acquisition of private land owned by the company has "no legal effect" on the ownership of its land or near-term project development plans. 
The vote authorized the acquisition of private land owned by Curis "through eminent domain" for the purported purpose of a wastewater treatment facility. 
Highlighting the fact that the law in Arizona and the U.S. places a high value on the right to own private property and heavily restricts government bodies from "unwarranted takings" of private land, the company noted that it has no doubt that the courts will not permit the town to follow through with this council authorization. 
"The use of eminent domain comes with onerous legal burdens of proof and  costs for the Town if it fails to meet them," the company said in its statement late Wednesday. 
"Given the tremendous  amount of vacant desert land in the region of the Town and the  typically small footprint of a wastewater treatment plant, the  selection of Curis' entire private property holdings as a potential  site for a wastewater treatment plant lacks foundation."
The town's attempt to acquire land does not include the 160-acre state trust land parcel on which Curis can operate for nine years, it said, including the phase 1 production test facility and the first years of commercial operations at Florence. 
Once final permits are received, the company plans to continute to move forward with the phase 1 production test facility in the near-term. The facility is expected to show the safeness of the project, and that it operates well within the parameters established by the state and federal agencies. 
Curis said it has also advised the town that it is willing to meet, discuss and address any concerns with respect to the development of the project, including the ability to accomodate the wastewater treatment facility. 
Last month, the company announced the highly anticipated results of its prefeasibility study for the project. It didn't fail to impress investors as the study showed strong economics and lower initial capital costs than a previous preliminary report. 
The report, authored by M3 Engineering & Technology, shows that using a long-term copper price of US$2.75 a pound, the project has a pre-tax net present value of US$748 million at a 7.5% discount rate, with a 38% internal rate of return (IRR) and a pre-tax payback period of just under two and a half years. 
After tax, the net present value is $505 million using the $2.75 per pound copper price, with a 31% IRR and a payback period of just under three years. 
The economics were modelled based on a design production rate of 55 million pounds of copper per year in the first five years, rising to 85 million pounds in year six. 
The in-situ recovery process the company plans to use requires no movement of rock or overburden, and 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 Florence property has a history having been advanced to a prefeasibility study level, and attaining full project permits when it was owned by BHP Copper in the late 1990s.

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