Copper Mountain Mining Corporation has revised its mine plan and project schedule at its Copper Mountain Mine, located in Southern British Columbia, Canada, in response to current market conditions and uncertainty.
In order to maintain positive margins and cash flow amidst near-term copper price uncertainty as a result of the Coronavirus’ impact to metal prices, the company will make the following changes:
- Deferral of Ball Mill #3 installation capital expenditures, saving US$22 million in 2020.
- Reducing operating costs by re-sequencing short term production to lower cost mine phases.
- Preserving high grade ore in Pit #3 scheduled for mining in 2020 to now be mined in 2021 for the benefit of expected higher metal prices in future and to match deferred Ball Mill #3 expansion capital expenditures.
These actions allow the company to maintain solid cash flow margins at the mine and run sustainably in the current low copper price environment, without any sacrifice to the long term mine plan.
In addition, the revised mine plan also allows the company to continue to be able to fund the mill expansion project internally. Saving the high-grade ore originally planned to be mined in 2020 for 2021 also better matches potential higher copper prices, thereby maximising cash flow generation.
Gil Clausen, Copper Mountain’s President and CEO said they are committed to protecting the cash flow and minimising costs given the current low and volatile copper price operating environment.
“We have revised our mine plan to protect and grow cash margin so that we are able to comfortably meet all our obligations, including debt service, while continuing with key projects including the installation of the Direct Flotation Reactors. This project requires minimal capital and has a fast payback and high return. We have deferred the major discretionary capital for the installation of Ball Mill # 3 until we see more certainty and stability in the copper price. These initiatives demonstrate our flexibility and ability to react quickly in response to changing market conditions and metal prices.”
Mr Clausen added said the operation is well positioned with mining phases that can be readily re-sequenced without negatively impacting the intermediate and long term.
“While the mine plan we have currently implemented is sustainable longer term at these low copper prices, we believe this market uncertainty is short term and fully anticipate the copper price to recover.”