Imperial Metals Corp. (TSX:III) issued an updated feasibility study for its Red Chris project Tuesday envisioning a mine that’s significantly more expensive than it was in 2005.
The Vancouver-based company said the copper-gold project, located in northwest B.C., would cost approximately $443 million to build.
That’s higher than the $225 million predicted in 2005, but president Brian Kynoch said that increase is mostly the result of higher construction and copper prices.
“Even though its capital costs have gone up substantially, the cost of copper has as well,” Kynoch told Business in Vancouver. “That mine has an after-tax return of 15% at $2.20 [per pound] copper and 37% at current prices, so that’s a fairly good project.”
Kynoch stressed that the updated feasibility is not a new feasibility study, meaning the project’s environmental permits are still applicable.
Red Chris spent much of its recent history tied up in a Supreme Court battle regarding the validity of its federal environment permit. Earlier this year, a judge ruled the permit was valid. (See “Environmental assessment duplication dust-up intensifies” – issue 1059; February 9 to 15.)
Kynoch said Imperial would build the project according to its 2005 design, but it still has to obtain several other permits.
Also weighing on the project is the proposed Northwest Transmission Line, a 344-kilometre power line that would provide power for Red Chris among a host of other resource projects in the region.
Kynoch said the company couldn’t establish a timeline for Red Chris until the transmission line is granted its own environmental permits.
Red Chris contains approximately 5.14 billion pounds of copper and 7.16 million ounces of gold in measured and indicated categories. The project will create 300 long-term jobs.
At press time, Imperial’s shares were valued at $24.29.