Monday, 13 May 2013

Curis Resources to raise $6 mln for Florence project development

Curis Resources (TSE:CUV) has arranged to raise $6 million through a non-brokered private placement financing, with funds to be used to advance the development of the company's Florence copper project in Arizona, which earlier this year yielded strong economics in a prefeasibilty report. 
The company told investors on Monday morning it will issue 6.82 million shares at a price of 88 cents each - in equal portions to two "unrelated subscribers": Sino-Canada Natural Resources Fund I and Sino Canada Zheshang Mining Investment Limited.
"The financing has been arranged at a premium to current market prices at  a time when many companies in the mining industry are having  significant challenges raising capital," said president and CEO Michael McPhie in the release today. 
"This investment is a strong indication of support and confidence in the  management and future prospects of Curis and our flagship Florence  Copper project."
McPhie added that the new funds provide the company with additional resources to advance the project through the final stage of permitting, for the first phase of development. 
The first phase, or phase 1, will involve the construction, operation and closure of a 24-well in-situ copper recovery operation at the project. Before it starts phase 1 operations, however, the company is waiting on the 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". 
The company has also recently seen certain legal obstacles removed from its pathway to development, including a lawsuit last month that had challenged the operational permit for the project. 
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, but 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. 
The 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. 
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. 
The company said Monday that the new funds from the placement, which still needs the approval of the Toronto Stock Exchange, will be also be used for working capital to support the ongoing growth of Curis. 
"This investment matches our fund's investment strategy in Canada's  natural resources sector," said managing partner of Sino-Canada Natural Resources, Thomas Lau. "The Sino-Canada Natural Resources Fund will keep supporting Curis to  reach commercial production in the near term."

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