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With Copper Prices In The $3.00 Range, This Is An Ideal Time For
Copper Mountain Mining To Bring Into Production Their 100% Owned Copper Property In
British Columbia, Which Already Has Infrastructure In Place Along With Significant
Exploration Potential For Investors
Copper Mountain Mining Corp.
Suite 550, 800 West Pender
Vancouver, BC V6C 2V6
Rodney A. (Rod) Shier, CA
Chief Financial Officer
Interview conducted by:
Lynn Fosse, Senior Editor
Published - October 26, 2007
RODNEY A. (Rod) SHIER, CA
Chief Financial Officer
Rod graduated in 1986 with a Bachelor of Commerce degree from the University of
British Columbia and earned his Chartered Accountant designation in 1989. He has extensive
experience in all aspects of corporate finance including equity and debt financings,
merger and acquisition structuring, negotiation of joint ventures, and hedging. Rod has
over 15 years experience with regulatory corporate finance obligations and has
participated in the listing of companies in Canada and the United States.
Currently, Rod is also the Chief Financial Officer of Copper Mountain Mining Corporation.
He has worked for publicly traded companies as well as a major accounting firm. Rod is a
member of the Institute of Chartered Accountants of British Columbia.
Mountain Mining Corporation ("CMMC") purchased 100% of the Similco open pit
copper mine in late December 2006. CMMC initiated a drill program at the start of 2007 to
upgrade and test the reliability of the reported historical resource of 142 million tons at an average grade of 0.42% copper, containing
1.13 billion pounds of copper. The
program has since grown to include 51,000 meters of drilling, which makes it one of the
largest exploration programs in British Columbia for the 2007 year. In mid September of
this year the Company announced an interim 43-101 compliant resource of 2.9 billion lbs of
copper. The Company is currently completing a Preliminary Assessment of the project with a
view of seeing this project back in production by 2010. CMMC common shares trade on the
TSX Venture Exchange under the symbol CUM.
CEOCFO: Mr. Shier, what is the vision for Copper
Mr. Shier: The vision of Copper Mountain is to
develop into major copper producer with precious metal credits by 2010. We are going to do
that by developing an open pit operation that will produce plus a hundred million pounds
of copper per year in British Columbia. In addition, we are also going to investigate the
potential of identifying a deep major copper-gold porphyry deposit at depth that could
provide for an even larger project down the road.
CEOCFO: How did the property
get your attention?
Mr. Shier: Copper Mountain is located about 300
kilometers east of Vancouver in British Columbia. We acquired the property in December
2006. It has a long history and has been in operation on and off again over the last
ninety years. It was in operation since the mid 1920s to the late-1950s by
Granby Mining as an underground mine, Newmont Mining operated it from about 1972 to about
1988 as an open pit copper mine. Princeton Mining took it over in 1988 producing copper
through to 1995. Jim ORourke was CEO of Princeton Mining when he negotiated the
property purchase and Jim ORourke is now our CEO as well, so we have tremendous
familiarity with the property. We acquired Copper Mountain in 2006 when the Company was
private through an option agreement that we had arranged in the previous year. We
immediately started an extensive 51,000 metre drill program on the property in January
2007 and took the Company public in June.
CEOCFO: Is it the price of
copper that led you here now?
Mr. Shier: Copper prices had a strong influence
on deciding to move forward with the project and it of course made it possible to finance
this project in a good copper environment. The history of our Copper Mountain property is
that it has shut down three times during its 90-year history. However, it was always on
low copper prices, the last time was in mid 1990s when Copper was in low $0.70 cent
range. Today copper is strong in the plus $3.00 range and we see that continuing in the
foreseeable future. Therefore, we see this as an ideal time to be looking at bringing a
major copper property into production into BC. The other significant thing to note here is
that this is not a greenfields project, you have a lot of history and infrastructure
already in place, which can help assist you in bringing the property back into production
in a very quick manner.
CEOCFO: Is this 100% owned by
Mr. Shier: That is correct. We acquired 100% of
it in December of 2006.
CEOCFO: Do you expect to
continue with the 100% ownership; is that part of your strategy?
Mr. Shier: It is. We have added a number of
people to the company since acquiring the property. The management team, led by Jim
ORourke who has over 35 years of development and operating experience in the mining
industry is one of the few individuals around in the mining industry that has been
involved with the development and production of about seven major mines in the world. I
have over fifteen years experience in corporate finance and have been involved in moving
public companies forward, and both Jim and I are early investors in the project. Peter
Holbek, our VP Exploration has over 25 years of exploration experience and what is
interesting about Peter is that he too was involved with this project in the early
90s as manager of exploration for Princeton Mining when they had this property.
Peter is very excited about returning to this property and knows the propertys
potential well. Peter Campbell is our VP of environmental affairs and he has over 30
of environmental and permitting experience in BC. We just recently hired Alastair Tiver as
our Chief Mining Engineer; he has greater than twenty years hands on experience in
developing operating mines. We also have Richard Joyes our exploration geologists who was
our first employee. Richard is a geologist by training with over six years experience and
was instrumental in allowing us to reestablish the mining database of over 5,500 drill
holes and over 400,000 meters of historical drilling to where we are today. We also added
Don Graham, Director of Investor Relations with 23 years experience in the investment
community. We have some experienced advisors, Roman Shklanka who is a well known mine
finder in British Columbia and around the world; he is one of our advisors and he has over
45 years of international mineral exploration experience. Bob Young is our other advisor
who is now retired but was formally with Placer Dome and Teck and is one of the foremost
copper experts in BC. We are developing this as a team to move this project forward on our
own and to maintain 100% control to maximize value for our shareholders.
CEOCFO: Are there special
requirements in copper that might not be with some other minerals?
Mr. Shier: The main thing at the end of the day
is the commodity that you are selling; you are selling a copper concentrate so it would be
going to a smelter in Japan or some other place like that. For example, Jim ORourke
developed the Huckleberry Copper Mine in British Columbia, and he brought in a Japanese
partner to help fund that project and move forward, in addition to purchasing the
concentrate. The Japanese certainly have a good history with this project as they were
buying the concentrate from the mine back when it was previously in production under the
Princeton mining banner. This differs from gold or silver where you would be producing a
dore bar as opposed to a copper concentrate that goes on to a smelter and gets refined
into copper at that stage.
CEOCFO: Are there newer
technologies that you are able to take advantage of today?
Mr. Shier: There are always newer technologies
in mining. One of the key changes here is that in earlier years, smaller equipment was
used. What we are looking at, instead of eighty-five ton trucks, is now trucks of 240-ton
magnitude. Greater economies of scale and that certainly helps the economic bottom-line of
CEOCFO: What is the timetable
over the next couple of years?
Mr. Shier: We are moving this project forward
very aggressively. We just started this project in December 2006 when we acquired it. We
immediately commenced with our exploration program and became public in June of 2007. We
are completing a preliminary assessment as we speak. We just released an interim 43-101
resource study that showed we had 2.9 billion pounds of copper on the property. Our
feasibility study will be starting in the fall towards the end of October. Next year we
will be announcing a production decision shortly after we complete the study. We see
construction happening in 2009 and if everything goes well, we will certainly see our
property in production by mid 2010.
CEOCFO: Are you able to get the
personnel you need on the field?
Mr. Shier: There is no question that personnel
is an issue for most mines. We think we have a significant advantage when dealing with a
property that is only 15 kilometers from the town of Princeton, a fairly large community
that is only 300 km from Vancouver, a major port city. When this property was in
production, it employed about 225 or 230 personnel. We would be looking at a similar
amount when we start up production. The bonus of having an employee live in town with his
family and drive 15 minutes to work as in our case is a huge advantage, as compared to a
camp situation where they fly in and fly out. This situation for Copper Mountain is unique
and will be very attractive to workers.
CEOCFO: What is the financial
picture like for Copper Mountain?
Mr. Shier: Copper Mountain Mining is a new
company; as I mentioned it just became public in June of this year by way of an IPO where
we raised about $7 million. So because we just became public, Copper Mountain is fairly
new story. The stock trades on the Toronto Venture Exchange, the symbol is CUM and
currently trading about the $2.00 range. It came public at $1.45 and so shareholders have
already seen a good gain and we expect that to continue as we deliver ongoing news to
shareholders and advance the project.
CEOCFO: Is the investment
community paying attention?
Mr. Shier: They are starting to. Our lead
underwriter was Raymond James. Currently we do not have analyst coverage but expect that
to change as the project develops. We are getting some attention by various analysts but
over the course of our development, we should attract various analyst opinions. Our market
has been fairly active trading about 40% of our float over the last three months despite
the credit crunch and the trepidation that has ensued in the market. I think it is still
the early days for people to get familiar with the project but as of today those that have
invested in our IPO have had a handsome return on their investment. As more people become
aware of our project, those that buy in today should also reap handsome rewards.
CEOCFO: Why should investors
pick Copper Mountain Mining out of the crowd?
Mr. Shier: The main reason is, is that we do
have a significant resource. As I mentioned, we just released our interim 43-101 resource
study that showed we have 2.9 billion pounds of copper. That is a significant amount of
copper to move forward on. Our exploration strategy is three-fold. One, we are initially
targeting drilling in-between the historical pits to form what we are calling a super pit.
Two, we already have secondary targets already identified by historical drilling
that contain existing resources although not 43-101 compliant resources, we know they
contain resources so we want to get out there and test that. Thirdly, the deep potential
here, and this is what shareholders are looking for, significant copper-gold blue-sky
upside. If we find out where this copper system is coming from at depth then all bets are
off and we have a major deposit on our hands.
CEOCFO: What should people take
away from this interview?
Mr. Shier: I think they should understand that
this company has a real near term production goal 2010 at a site called Copper Mountain.
This objective is extremely realistic because of the infrastructure currently in place as
well as mining and environment permits issued. It is a known area of past production while
at the same time you have significant exploration upside, both around the property and at
depth. It could not be more clear than that.
CEOCFO: Copper Mountain has a
lot to look forward to!
Shier: We have moved forward very quickly this year. We completed our
private financing, we commenced drilling in January, we completed our property report in
February, and we completed our IPO in June. Our resource report was completed in August
and we are expecting our scoping study to be on schedule for completion at the end of this
month. We have commenced an exploration survey employing the Titan 24. This is a deep
penetration IP program. There are only about two of these machines in North America and we
were fortunate enough to secure one of these for Sept/Oct. Investors are going to continue
to see a lot of news coming out of the company as we advance the project. The investment
highlights for the company are that it is a large copper/gold porphyry system that we own
100%. It has real near-term production potential. It is an open-pit producer. It is low
technical risk because this property has operated on and off over the last ninety years.
The Japanese smelters love this concentrate. We have a large resource and we have
significant exploration potential around the resources already identified. We have no
environmental or legal issues. We have an experienced management team that has done this
before and is ready to do it again by bring this property into production by 2010.
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