Curis Resources (TSE:CUV) says that a lawsuit against the company that challenged the validity of regulations governing certain permits for its Florence copper project in Arizona has been dismissed.
The lawsuit, which was filed against the Arizona Department of Environmental Quality (ADEQ) to prevent the agency from issuing an Acquifer Protection Permit to Curis for the Florence project, was dismissed by Judge Arthur T. Anderson of the Maricopa County Superior Court in Arizona.
The suit was filed by Southwest Value Partners of San Diego, California, Johnson Utilities of Queen Creek, Arizona, and other plaintiffs, who alleged that ADEQ exceeded its statutory authority by creating a rule governing individual acquifer protection permits of limited duration.
Curis, which received the Acquifer Protection Permit for its phase 1 operations in October last year, joined the lawsuit and filed a motion to dismiss with prejudice on the grounds that state law granted ADEQ the authority to create the regulation.
"We are pleased with the decision to dismiss what we believe to be a frivolous and ill-advised lawsuit brought forward on very questionable grounds," said Curis' senior legal and government affairs advisor, Rita Maguire in a statement on Friday.
"The review process for the permit for Phase 1 operations of the Florence Copper project is both exhaustive and inclusive. The APP regulations ensure the safety of the public and the environment, and guarantee public involvement in the permitting process."
The Florence project has a long 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. Curis has been working to amend and update these operational permits, with the aim of starting copper production at a phase 1 production test facility late this year.
"Both ADEQ and the United States Environmental Protection Agency have extensive experience in protecting groundwater through the permitting process, and Curis will continue to work with both agencies to ensure the safety of the project," said VP of environment and technical services for Curis, Dan Johnson, adding that the decision to dismiss the suit validates the authority of the environmental review process.
The court decision indeed sides with Curis, as it found that the regulation governing temporary Acquifer Protection Permits "constitutes a valid exercise of ADEQ's rulemaking authority".
The dismissal will also prevent the plaintiffs from challenging the validity of the Curis permit in any administrative appeal.
"We look forward to continuing a respectful and meaningful dialogue around a project that will contribute to the quality of life of the citizens of Florence, Pinal County and the State of Arizona," said Curis president and CEO, Michael McPhie, in the statement on Friday.
The Florence property, which is located in central Arizona and owned outright by Curis, hosts a shallowly buried porphyry copper deposit with a significant oxide mineral resource that is amenable to in-situ copper recovery.
The in-situ recovery process 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.
Before it starts phase 1 operations, the company awaits approval from the Environmental Protection Agency for an underground injection control permit for the test facility, which it anticipates will be secured in the "near future".
Using a base case 70 percent copper recovery rate, and a copper price of $2.75 per pound, the internal rate of return of the Florence copper project was projected at 29 per cent.