Engineering & Mining Journal

APR 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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REGIONAL NEWS - U.S. & CANADA 10 E&MJ • APRIL 2019 www.e-mj.com vitalization of my hometown of Stewart to support multiple operations and for the growth of Mining as a cornerstone indus- try for my Nisga'a friends." Ascot will retain McLeod as a consul- tant. In addition, Dave Green will be ap- pointed as Ascot's mining manager, and Ryan Weymark will join as the vice presi- dent of project development. PolyMet Gets Final Federal Permit for NorthMet Project PolyMet Mining Inc., a wholly-owned subsidiary of PolyMet Mining Corp., an- nounced the U.S. Army Corps of Engi- neers has issued its Record of Decision and Section 404 wetlands permit for the NorthMet Project. Along with recently is- sued state permits, PolyMet now holds all necessary permits to construct and oper- ate the NorthMet copper-nickel-precious metals mine and processing plant located near Hoyt Lakes, Minnesota. PolyMet also announced it has entered into an extension agreement with Glen- core AG with respect to the approximate US$243 million in secured convertible and non-convertible debt owing to Glen- core, which is due to mature on March 31. Glencore has agreed to extend the matu- rity date of the debt to provide PolyMet time to prepare for and complete a rights offering by June 30, fully backstopped by Glencore, to raise sufficient funds to repay the outstanding debt. In connection with the extension agreement, the company has also agreed to issue additional pur- chase warrants to Glencore and to make certain amendments to the existing ex- change warrants held by Glencore, subject to applicable stock exchange approval. "While our immediate goal is to ad- dress the Glencore debt, we are proud to be the first mining company to be fully permitted to responsibly build and oper- ate a copper-nickel-precious metals mine within the world-class Duluth Complex," said Jon Cherry, president and CEO. "Our employees, shareholders, Iron Rangers, labor and business partners all share in this historic achievement. They have steadfastly believed in, worked tirelessly toward and provided unwavering support for this project for so long." The issuance of the federal wetlands permit follows Minnesota regulators' issu- ance late last year of the Permit to Mine, dam safety, water appropriations, water and air quality, and public waters work permits, representing a total of 18 state and federal permits and approvals. The company is refining the technical details of the project as planning for final engineering and construction are under way. Initial site preparation work has al- ready begun, such as monitoring well in- stallations, asbestos abatement, infill and geotechnical drilling. "Importantly, receipt of this final per- mit enables us to move forward with proj- ect financing which is expected to take several months," Cherry said. PolyMet aims to be the first mining company to commercially produce copper and nickel, in addition to platinum, pal- ladium, gold and cobalt, from the Duluth Complex base and precious metal depos- its in the Iron Range mining district in northeastern Minnesota. The company expects to build and operate open pit mining operations that are expected to yield approximately 1.2 billion pounds of copper, 170 million pounds of nickel, 6.2 million pounds of cobalt and 1.6 million ounces of precious metals including 1.2 million ounces of palladium and 290,000 ounces of plat- inum, over a 20-year mine life. Hudbay Gets Mine Plan of Operations for Rosemont Hudbay Minerals Inc. has received the approved Mine Plan of Operations (MPO) for the Rosemont project, located in Ari- zona, from the U.S. Forest Service. The issuance of the MPO is the final admin- istrative step in the permitting process. "Receiving the MPO is an important milestone that completes the permitting process at Rosemont," said Alan Hair, Hudbay president and chief executive officer. "With the receipt of the Section 404 Water Permit, an agreement to con- solidate 100% ownership and receipt of the approved MPO, Hudbay continues to move the project forward." Rosemont is now a fully permitted, shov- el-ready copper project, according to Hair. Rosemont is an undeveloped copper projects delivering a 15.5% after-tax un- levered internal rate of return at a copper price of $3 per pound based on the 2017 Feasibility Study published by Hudbay. Rosemont is expected to produce approx- imately 127,000 metric tons (mt) of cop- per over the first 10 years of operations. Wheaton's wholly owned subsidiary, Wheaton Precious Metals International Ltd., has a precious metals purchase agree- ment with Hudbay on the Rosemont proj- ect, in exchange for an upfront payment of $230 million paid in two installments. In related news, Hudbay Minerals Inc. has reached an agreement with United Cop- per & Moly LLC (UCM) to purchase UCM's 7.95% interest in the Rosemont project, and to terminate all of UCM's remaining earn-in and off-take rights, for upfront cash consideration of US$45 million, plus three annual installments of US$10 mil- lion per year, commencing July 1, 2022. In connection with the transaction, Hudbay has agreed to release UCM from any and all obligations in relation to the Rosemont project. UCM is jointly owned by Korea Re- sources Corp. and LG International Corp. "This transaction simplifies the owner- ship structure and improves our financial flexibility for the development of Rose- mont," Hair said. Hair added that they will soon start looking for a development joint venture partner for Rosemont. In addition to simplifying the owner- ship structure, the transaction also re- moves the current governance structure with UCM, which was inherited from the previous owner of Rosemont. The UCM transaction is expected to close not later than April 25, subject to the approval of the parties' respective boards of directors and the execution of a definitive agreement. Compass Reaches 3-year Labor Agreement With Miners Compass Minerals announced that a new collective bargaining agreement has been ratified by miners at its Cote Blanche salt mine, who are represented by United Steel- workers (USW) Local 14425. The three- year agreement includes pay rate and ben- efit enhancements to be more consistent with other U.S.-based Compass Minerals employees as well as features that provide greater operational flexibility for the com- pany, according to Compass Minerals. "This agreement is an important step toward creating sustainable success at the mine and balances the needs of our em- ployees with the interests of our customers and shareholders," said Don Brumm, vice president, operations Cote Blanche mine. "Throughout the entire process, we've had productive and respectful dialogue with the union's bargaining committee, which resulted in a positive outcome for all."

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