Serving Gogebic, Iron and Ontonagon Counties
Serving Gogebic, Iron and Ontonagon Counties
By P.J. GLISSON
Wakefield TOWNSHIP — The interim CEO of Highland Copper Company presented an optimistic outlook last week for the Copperwood Project now advancing in Wakefield Township.
Barry O’Shea said that, while a feasibility study predicted a mine life of 11 years, he believes that inferred tonnage may extend the timing to 15 years. Mine construction is expected to start in 2024.
O’Shea was speaking in a Nov. 15 virtual session with Copperwood Site Manager Mike Foley.
“It’s really only using a portion of the defined resource,” said O’Shea of the feasibility study, adding that additional inferred tonnage comes to 79 million.
O’Shea also expressed pleasure in having Foley in place. “It’s great for us to have Mike on the ground,” said the CEO. “He’s local. He knows the people.”
When asked to introduce himself, Foley said he’d been with Highland for the past couple months and is a lifelong resident of Gogebic County. He has a degree in civil engineering from Michigan Technological University with long-term experience as a consultant, including in mining and municipal interests.
Foley summarized the creation last summer of an east stream diversion in the southeast corner of the project as part of environmental preparations and therein commended “great work” by contractors and Highland employees.
He said that many new acres of permanent wetlands will result from the project and that Highland’s initial site work will facilitate efficient passage of fish and other animals.
Foley mentioned community support at all levels in Gogebic and Ontonagon counties, as well as in Houghton County and from Michigan’s Department of Natural Resources and Department of Environment Great Lakes and Energy.
In terms of job potential, he added that Highland also has been connecting with the Michigan Economic Development Corporation, Michigan Works, and Invest U.P., as well as with educational institutions such as Gogebic Community College, Northern Michigan University, Bay College and MTU.
Foley said that Highland officials look forward to continue working with those sources in filling “professional, technical and hands-on personnel.”
Kyle Stewart of 6ix.com, a financial technology company, moderated the online session, which included queries from the public via presubmitted email or from live chat.
Under questioning, O’Shea conceded that copper prices vary over time.
“Globally, there’s been some uncertainty, and it’s holding copper back a little,” he said.
But he added that current pricing and projected expectations in the range of $4 per pound or more suggest “robust returns” and “significant” tax benefits.
Moreover, he said that Highland also has significant opportunities to increase the net present value, referred to by its acronym of NPV.
The Nugget, a mining blog, defines NPV as a “widely accepted tool for measuring the value of a mine project” by calculating “current value of the cash flows at the required rate of return of a project compared to the initial investment.”
Among value-added opportunities envisioned by O’Shea are bulk ore-sorting technology, metallurgical recovery improvements, ground support design criteria, mining height optimization, potential royalty restructuring and government grants.
When asked about any opposition the company has received, O’Shea said “We’re a mining business,” adding that, as such, there always will be “elements of opposition.”
He said, “We take them seriously and listen as needed.”
One of the questions directed to Foley was about where the mining product will be smelted. He responded that it will be transported first by truck, and then by train, to an as-yet-unnamed smelter.
“We’re very pleased to be in the United States,” said O’Shea. “There are very few fully permitted copper mines in the United States.”
He said that the Copperwood Project already has received permits for water resource and wetland protections, dam safety, inland lakes and streams, air discharge, nonferrous metallic mining, water intake, and Great Lakes submerged land.
“We don’t take for granted our licenses to operate in Michigan and in the U.S.,” said O’Shea, explaining that the Copperwood Project is on private land, thereby not requiring federal processes.
“We’re excited at our prospects,” he said, assuring that the company is committed to operating “in a sustainable manner.”
O’Shea added, “We’re pretty proud of what we’ve achieved. We have no warrants or debts. We look forward to moving things forward as we step into 2024 with a strong balance sheet and good assets.”
He said Highland also hopes to work cooperatively with other industries such as the auto industry. He mentioned that General Motors has invested in mining companies and added that auto companies in general are eyeing material supply.
O’Shea said that a domestic supply of copper is needed in this country to feed the transition to more environmentally friendly energy sources.
The Copperwood Project will be financed, in part, by Highland’s sale of 66% of its White Pine North Project in Ontonagon County to Kinterra Capital Corporation, based in Canada.
According to O’Shea, the White Pine North Project has a 22-year mine life. He said that Kinterra is providing both capital and technical resources for that location and also is operating that project.
In a later report to the Marenisco Board of Trustees on Monday evening, Foley said that — in order to move forward — the Copperwood Project still needs about $400 million in funding.
