VANCOUVER — The British Columbia government has approved an environmental assessment certificate for Terrane Metals’ (TRX-V, TRXOF-O) Mt. Milligan gold-copper project in central B. C.
The project still needs federal environmental approval but the provincial certificate is a major milestone towards development. Terrane plans to build a 60,000- tonne-per-day open-pit mine with a flotation facility for copper recovery at Mt. Milligan, which sits 150 km northwest of Prince George.
Terrane recently postponed development at the site because of the global economic downturn. The company now plans to start building in the second quarter of 2010, aiming for commercial production before the end of 2012. The mine is expected to produce 217,000 oz. gold and 88 million lbs. copper annually over a 15-year mine life.
Capital costs come in at $917 million, an amount that would be difficult to raise in the current markets. Terrane has already secured a $40- million convertible line of credit from Goldcorp (G-T, GG-N), a major shareholder. The major has the option to switch its equity interest to a 30% stake in the project.
During construction, the project is expected to employ 370 workers; during commercial production the mine will require 400 full-time employees. The employment would be a welcome boon for Prince George, where mill closures in the logging-based town have hit hard.
On news of the B. C. project approval, Terrane’s share price gained 6¢ to close at 25¢. The company has a 52-week trading range of 9.5- 62¢ and 113 million shares outstanding.
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