Citing a growing demand for copper from the transition to green energy, the company said it was excited about prospects for the project.

The development still needs financing and engineering studies, which should only take six months, before the company can pin down a date for the start of construction.

It expects financial close in mid 2022 and a commissioning of the mine in 2024.

The after-tax net present value of the project is $US622 million, a 42 per cent increase on previous estimates. The internal rate of return is 35 per cent.

Copper Mountain chief executive Gil Clausen said the development costs had increased in the past year but he expected to ease as the Queensland and Australian economies re-opened fully after COVID-19 restrictions.

The board “has now formally approved the plan to construct the project subject to advancing detailed engineering to 80 per cent completed; obtaining committed project financing; and the lifting of COVID-19 restrictions in Queensland’’.

“This project execution plan approach reduces development risk but will have a four to six-month extension to the original project schedule,’’ he said. 

“The company now anticipates Eva Mine commissioning in late 2024, provided the above conditions are met.”

Copper has been in strong demand because it is a vital component in the transition to renewable energy. ING has forecast that copper prices could slip moderately in 2022 but were likely to be above long-term average prices over the next few years.

“Supply chain bottlenecks with their effects on copper supply to the China market may not go away easily in 2022, especially given the spread of the Omicron variant,” ING said.

Clausen said Copper Mountain would fund the expenditures for moving the project through detailed engineering and to secure long lead items with current cash on hand. 

“We expect to fund the full development of Eva through conventional bank project debt financing and internal cash flow,” he said. 

“The project financing process is well advanced, with closing expected for mid- 2022. ‘’

 “We are excited to formally advance Eva, which is expected to add over 100 million pounds (45,000 tonnes) of copper production per year, given the ever increasing and important role copper will play in a green economy and the limited number of other copper projects currently in development globally.”

The company said there had been cost increases in steel, mechanical, concrete, and construction labour. Raw materials and finished equipment costs had also been impacted by shortages as Covid restrictions remained tight, especially in Queensland. 

Higher estimated infrastructure costs were mainly driven by an expanded camp facility, power infrastructure and water development. There had been lower mining equipment costs marginally offsetting the overall higher capital costs in other areas. 

The total life of mine sustaining capital was estimated to be $US46.6 million, compared with $US33.8 million in the May 2020 feasibility study.