Keweenaw Copper expanding its holdings
CALUMET – The Keweenaw Copper Company is seeking mineral rights leases for over 4,000 acres of state land in Gogebic, Houghton and Keweenaw counties, for exploratory drilling and potential mine development, according to a notice and call for public comment recently issued by the Department of Natural Resources.
Keweenaw Copper already controls more than 9,000 acres of mineral rights in the area and has signed a letter of intent with the Copper Range Company to buy the White Pine Mine.
Employees are already hard at work examining and permitting land for mining. None of this guarantees future mining, cautions Keweenaw Copper Vice President and Project Manager Dr. Ross Grunwald, but the company is optimistic.
“You have to start with what you know and then go into the unknown,” he said. “We know there’s a lot of copper up here, and we have to focus on that first.”
It’s all part of Canadian parent company Highland Copper’s Keweenaw Project, which began with creating subsidiary Keweenaw Copper and putting it to work acquiring land, assaying core samples and handling permitting and business issues.
According to the company’s web site, Highland committed to spending $11.5 million on the project by October 2015, as 65 percent owner of the project. BRP LLC owns the other 35 percent.
Grunwald said Keweenaw Copper currently employs 23 full-time employees, as well as a handful of consultants. Many of them, largely geologists, work drilling and examining core samples out of the company’s lab in the shadow of the historic Centennial No. 6 shaft in Kearsarge.
The lab handles the samples from all of Keweenaw Copper’s sites, three undeveloped sites in the Keweenaw Peninsula and one near Ironwood, as well as those that will be taken at White Pine.
Whether or not those sites are eventually developed, in the exploratory stage they see very little environmental impact, according to Keweenaw Copper Environment and Community Engagement Manager Raymond Govus. He noted that drills are mounted to trucks or other vehicles, creating no need for permanent structures or destroying vegetation.
If the undeveloped sites are chosen for mining, Grunwald said, each mine would likely cost a minimum of $100 million to get up and running. Re-opening White Pine would cost $300 to $400 million for new facilities, or $10 to $20 million for a smaller project using existing facilities.
The White Pine mine is potentially closer to operation, but any decision to begin production is still down the road.
“It’s dangerous to make estimates,” Govus said. “It’s a jigsaw puzzle with a lot of pieces to put together.”
He said that despite the mine’s relatively recent operation, the company must still validate its reserves before moving forward.
“We’re going to be commissioning a feasibility study to see if it’s economical to mine,” he said.
Starting from scratch – more like the Keweenaw locations’ situations – he noted that the Eagle Mine in Marquette County took seven years to go from discovery to production.
As a better-developed site, White Pine operations could begin within two or three years, Grunwald said. Any start time further off than five years would likely make it a venture not worth pursuing for Highland.
And while Grunwald said the letter of intent to buy White Pine should lead to an interim closing within the next couple of months, the final closing wouldn’t come until Dec. 31, 2015, after a feasibility study.
Grunwald said Keweenaw Copper’s crews have drilled and assayed, or scientifically examined, 140,000 feet of core samples since 2012, at a cost of about $50 a foot. The Canadian securities commission, he said, requires strictly controlled fresh data even when when old data is reliable.
Even if multiple sites are mined, it’s likely there will be only one smelting operation for Keweenaw Copper’s holdings. Grunwald said it would be located near the White Pine Mine, and unrefined ore would be brought in from elsewhere.
“The question is how to get the rock from the smaller deposits there,” he said. “There’s no rail, so we’re looking at barges, trucking it – we don’t have an answer.”
Keweenaw Copper has been holding regular forums to inform the public of its progress. The company hosted information sessions in Calumet and Houghton Wednesday and Thursday.