Terrane aims for producer status at Mt. Milligan

Vancouver – Newly listed Terrane Metals (TRX-V) has concluded the previously announced acquisition of the Mt. Milligan gold-copper deposit and now aims to develop it into an open-pit mine capable of producing 275,000 oz. gold annually as early as 2010.

Mt. Milligan is situated halfway between the towns of Mackenzie and Fort St. James in central British Columbia, and was previously owned by Placer Dome. Terrane agreed to purchase Mt. Milligan and several other Canadian properties from a unit of Goldcorp (G-T, GG-N) in exchange for preferred shares valued at $120 million. Terrane also secured rights of first refusal to acquire four additional properties presently owned by Goldcorp in Ontario, Quebec, and British Columbia.

Goldcorp acquired the portfolio of former Placer Dome properties from Barrick Gold (ABX-T, ABX-N), which acquired Placer Dome through a takeover bid concluded earlier this year.

Mt. Milligan is the largest and most advanced of Terrane’s newly acquired projects, with a measured and indicated resource of 205.9 million tonnes grading 0.6 gram gold per tonne and 0.247% copper, containing 3.7 million oz. gold and 1.12 billion pounds copper.

Terrane President Robert Pease, a former Placer Dome executive, believes Mt. Milligan can be developed into a large-scale mine that could produce 275,000 oz. gold annually at zero cost, net of substantial copper credits, assuming gold prices of US$500 per oz. and copper at US$2 per lb. The proposed $700-million mine could provide 350 full-time jobs for potentially 20 years, starting in 2010, depending on permitting.

The project was fully permitted by Placer Dome in the late 1990s though 2003, but was never placed into production because of low metal prices and other factors that rendered the project uneconomic at that time. A new project description would likely have to be filed in light of changes to the permitting regime.

Pease said he knew and appreciated the “cash flow potential” of Mt. Milligan during his years at Placer Dome and made his interest known to Goldcorp. Three other groups also approached Goldcorp about acquiring Mt. Milligan, with Pease’s group being the successful bidder. The newly completed transaction gives Goldcorp a 75% interest in Terrane, previously known as Atlas Cromwell.