A Quebec-based junior miner with a copper deposit in northern Michigan has brought aboard a deep-pocketed partner to advance it to production.
Longueuil-headquartered Highland Copper has entered into a joint venture with Kinterra Copper USA to bring cash and technical expertise to turn its White Pine North project into a mine. Kinterra made a cash payment of $30 million to take a 66 per cent ownership stake in the project.
White Pine North is one of two copper projects owned by Highland. Copperwood is the other, located 60 kilometres (37 miles) to the southwest.
Both are located near the south shore of Lake Superior at the base of the Keweenaw Peninsula, a historically well-known region of the U.S. for copper mining.
This deal with Kinterra is only for the White North Project, the smaller of the two deposits.
Kinterra has stepped into a good situation. Highland just released a preliminary economic assessment (PEA) of White Pine North this week showing a 22-year mine life.
A PEA is an initial base case assessment of what a mine could look like.
That operating life could have legs as exploration for more copper in and around the project site will be continuing.
According a news release from Highland, the initial capital expenditure to turn White Pine North into a mine is $615 million.
Kinterra is bringing an additional $30 million to the table for all the paperwork and effort associated with permitting, for infill drilling of the deposit and to complete a final feasibility study of what the mine will look like.
White Pine North has an indicated and inferred resource of 5.7 billion pounds of copper and 93.3 million ounces of silver. The copper grade in the indicated category is 1.05 per cent in 150.7 million tonnes. The indicated silver grade is 13.5 grams per tonne.
With the Copperwood Project, Highland appears to be going it alone on its development. It’s the more advanced of the two projects and is fully permitted by the State of Michigan. Mine construction starts in 2024.
The company claims Copperwood is an extension of the former White Pine copper mine which operated from 1953 to 1995.
Given the looming world copper supply gap, Highland wants to put both deposits into production as quickly as possible.
All renewable energy and battery technologies need copper. The green metal is used in power grids to connect wind and solar farms as well as in electric vehicle production.
A recent S & P Global report said, given the ambitious decarbonization targets of governments around the world, the demand for the green metal looks to double by the mid-2030s. Supply is unlikely to keep up given that it takes about 16 years to put a new copper mine into production, according to the International Energy Agency.
In a news release, Highland Copper President-CEO Denis Miville-Deschênes called the joint venture and the PEA “transformational” for the company.
“While we continue to maintain our focus on the fully-permitted Copperwood project, we have a viable path to simultaneously advance the White Pine North project, keeping our focus on near-term value creation by creating a new US copper producer.
“As significant capital is required to develop both projects, the joint venture arrangement allows us to move forward without having to issue any shares, and unlocks tremendous value for our shareholders. Kinterra recognizes the quality of our asset base and is committed to working with Highland to advance White Pine North. We look forward to working with Kinterra as partners to progress this great asset.”