Highland Copper buys Copperwood
Highland said Tuesday it has entered into a definitive agreement to acquire all rights, title and interest in Copperwood.
David Fennell, executive chairman of Highland, told the Daily Globe there is a "world class resource of copper in the Upper Peninsula," and if the resource is properly developed, "it is going to change the economic circumstance of that area.
"This transaction is part of a strategy that Highland has undertaken to consolidate an emerging copper district in the Upper Peninsula," Fennell said.
"The acquisition of Copperwood, in conjunction with our previously announced acquisition of the White Pine Project, and combined with our existing Keweenaw projects, establishes a foundation for an emerging intermediate copper producer," he added.
Closing of the deal is expected by April 30, and the agreement has been approved by both companies' boards of directors.
In November, the Michigan Department of Environmental Quality approved the final major permit for Orvana to begin the Copperwood mine. The wetlands, inland lakes and streams permit was approved after review by state and U.S. Environmental Protection Agency specialists and input received from the public and native American tribes.
Orvana has a local office in Ironwood Township. According to Dave Anderson, director of health, safety, environment and public relations for Copperwood, the status of employees at the office has "yet to be determined."
A press release from Highland said the company will pay Orvana up to $25 million in aggregate, of which $20 million will be paid in cash upon closing and $5 million will be paid in cash or shares of Highland, at Orvana's option, contingent on payment schedules and the price of copper during select periods of time.
Michael Winship, president and CEO of Orvana, said the company has been "pleased" to be a part of the development of Copperwood over the last several years, and believes a "good copper mine will be built" in the U.P.
"Based on a strategic planning review in 2013, Orvana decided that a disposition would allow for greater organic growth at existing operations through the concentrated exploration," Winship said. "In addition, Orvana's balance sheet will be strengthened in this challenging market of metal price volatility."
Fennell said the projects in the U.P. "fit together naturally," and work is already being done to get the most out of the Copperwood Project.
"Engineers are focusing on how they can create the best project that works best for everybody," Fennell said. "They are just embarking on that process."
For Anderson, it's about the community.
"Everything that has come to pass to the point we're at today is specifically because of the strong community support," Anderson said. "We would not be where we are today, if it wasn't for the community support."
Earlier this winter at a meeting at Gogebic Community College, Ross Grunwald, vice-president of exploration for Highland Copper, spoke about company plans for the former White Pine mine.
The Copperwood project was also shown on Highland's maps at the college.
Highland Copper also drilled for ore in the Bald Mountain area, north of Ironwood, last summer. Bald Mountain was listed as a potential mining area.
Grunwald said there's potential for more ore body discoveries in other locations in the western Upper Peninsula, as well.
He said the two-and-a-half-year-old Highland Copper, through its wholly-owned subsidiary, Keweenaw Copper Company, has 21 full-time employees.
At White Pine, mining would be northeast of the previously mined area.
The last mining at White Pine was in 1994.
Grunwald told the audience at GCC that Highland Copper doesn't currently operate any mines. He said the company could possibly develop a mine for another company or operate it on its own.
The company raised an additional $25 million to purchase the former White Pine mine and Grunwald said, "We're here for the long-term. We want to put as many U.P. residents to work as possible."