Wednesday, November 27, 2013

Highland Copper Co. to acquire White Pine from Copper Range and continue Keweenaw mining exploration

By Michele Bourdieu

Following his Nov. 10, 2013, presentation at a Keweenaw Unitarian Universalist Fellowship mining forum, Ross Grunwald (standing, right), vice president of Highland Copper Co. and project manager/vice president of Keweenaw Copper Co., replies to questions from the audience. (Photos by Keweenaw Now unless otherwise indicated.)

HOUGHTON, CALUMET -- The recent press release, dated Nov. 19, announcing that Highland Copper Co., a Canadian company, has entered into a binding letter agreement with Copper Range Company (CRC), a subsidiary of First Quantum Minerals Ltd., to acquire all of CRC's rights, title and interest in the White Pine copper project ("White Pine"), located in the Keweenaw Peninsula, may not be too much of a surprise to those who attended the Nov. 10 mining forum hosted by the Keweenaw Unitarian Universalist Fellowship (KUUF) in Houghton.

In his presentation at KUUF's Nov. 10th forum, Ross Grunwald, vice president of Highland Copper Co. and project manager/vice president of Keweenaw Copper Co., admitted that, as an insider, he was not allowed to reveal everything about the company's plans for mining exploration in the Keweenaw (and other parts of the Western Upper Peninsula). Grunwald did, in fact, talk about the Nonesuch Shale copper deposit that includes the White Pine mine site and the (Orvana) Copperwood mining project -- both of which are near Lake Superior and Porcupine Mountains Wilderness State Park. While Grunwald did not mention in that presentation that his company would soon be acquiring White Pine from CRC, he mentioned the Nonesuch area as one of his company's "potential targets."

In the following videoclip Grunwald describes the Nonesuch Shale copper deposit:

At the Nov. 10, 2013, mining forum hosted by Keweenaw Unitarian Universalist Fellowship, Ross Grunwald describes the Nonesuch Shale area his company, Highland Copper/Keweenaw Copper would like to explore for potential copper mining. The area includes the former White Pine Mine. Grunwald also summarizes Highland Copper's Keweenaw exploration project to date and presents a timeline for continued exploration. (Videos by Allan Baker for Keweenaw Now unless otherwise indicated.)

According to the press release, Dave Fennell, Highland Copper Co. executive chairman, stated: "Since our capital raise in May 2012, the Company has been establishing itself as an emerging copper exploration and development company focused in northern Michigan, an area which we consider to be highly prospective. The acquisition of White Pine is complementary with our existing Keweenaw project, particularly given the extensive infrastructure in place from past operations, and is a significant step towards further establishing Highland as a leader in the region. We view this as a highly synergistic and important transaction for Highland shareholders."

Highland says they will work with CRC towards executing a definitive asset purchase agreement and completing an interim closing by Jan. 31, 2014, and a final closing by Dec. 31, 2015. During the period between the interim and final closing (the "Interim Period"), Highland will have access to White Pine to perform exploration and other activities associated with the potential development of a mine at White Pine.

During the Interim Period, CRC will continue to fund and be responsible for the remediation and closure plan for White Pine (the original mine that stopped production in 1995) up to a maximum of US$2 million. Final closing will occur once Highland has compensated CRC for a US$2.85 million financial assurance bond associated with the remediation and closure plan of White Pine in a manner that is acceptable to all parties involved, including the applicable governmental authorities. After final closing Highland will assume all post-closing environmental obligations related to White Pine.*

According to Steve Casey, Michigan Department of Environmental Quality (DEQ) Water Resources Division district supervisor of the Upper Peninsula District, the DEQ required a lot of post-closure operations to be sure there was no contamination being released from the White Pine Mine site.

"They've cleaned up a lot of contaminated soils," he said. "Most of the work is done on the cleanup. Now it's maintenance and monitoring."

So far the water monitoring at White Pine has shown no problem with acid mine drainage, he added. In fact, Casey said he had noted the pH in the wastewater from the tailings basins was usually on the basic side.

KUUF tour of White Pine remediation

As part of their mining education series, following several forums that included varied perspectives on mining, the Keweenaw Unitarian Universalist Fellowship offered an opportunity to tour the White Pine Mine site in late September 2013.**

The group -- which included KUUF members, other local residents and Michigan Tech graduate students and researchers -- observed some of the thousands of acres of tailings that had been re-vegetated for remediation and also some tailings basins that are now settling ponds for storm water that is monitored weekly.

At the beginning of the tour, Kevin Hokans, environmental contractor and guide for the tour, explained the system of dams built to control the tailings:

During a Sept. 28, 2013, tour of the tailings reclamation at the former White Pine copper mine in Ontonagon County, Michigan, Kevin Hokans, environmental contractor, explains the system of dams for controlling the tailings and answers questions posed by some members of the Keweenaw Unitarian Universalist Fellowship (KUUF) who organized the tour. (Video by Keweenaw Now)

This photo (taken during the Keweenaw Unitarian Universalist Fellowship tour of White Pine remediation on Sept. 28, 2013) shows Bedell pond, which collects storm water from the area where the buildings are and is then pumped up into the North #1 tailings dam then into north #2 tailings dam through the perimeter channel and settling ponds. The water then flows out of Perch Outfall. "This particular pond does not contain tailings, just storm water," Hokans said. "Bedell pond is not required to be sampled weekly, but I do take monthly samples at this point along with other scheduled inspections." At left is the smokestack from the former smelter on the site, which has been dismantled.

Water sampling at White Pine Mine is done weekly year-round. This photo shows water sampling equipment at the place where the storm water that has been through the tailings basins is sampled when it is about to enter Perch Creek, continue to the Mineral River and then to Lake Superior.

Jim Belote, KUUF member, commented on the extent of the remediation at White Pine.

"What's surprising is the amount of space that it takes to treat the tailings -- thousands of acres," Belote noted.

Participants in KUUF's tour of White Pine observe some of the vegetation covering the tailings.

Cindy Enderly of Houghton said the tour was her first visit to White Pine.

"Generally I was pleased with the remediation and the plant growth there, though, considering how long it's been since the mine closed, I had hoped for more established vegetation," Enderly said.

During the KUUF tour, Mark Klawiter, Michigan Tech graduate student in geology, and Keri Anderson, Michigan Tech geology researcher, examine a piece of slag, a waste product of the smelting process.

Keri Anderson, a post-doc researcher in geology at Michigan Tech, was impressed by the remediation.

"I was expecting open tailings piles, so I think they've done a good job at covering it up and getting vegetation started," she said. "It would be interesting to see it again in five years."

Highland Copper Co.: Historical overview

The Highland Copper Co. press release also gives this historical overview of the White Pine project:

The Copper Range Company acquired the original White Pine mine in 1937. Subsequent drilling revealed the widespread nature of the mineralization and underground mining by room and pillar methods followed by flotation of sulfides began in 1952. Mining ceased in 1995 due largely to depressed copper prices, although significant amounts of mineralization remained, particularly to the northeast of the mine.

Production from 1952 to 1995 was 198,070,985 short tons averaging 1.14 percent copper for approximately 4.5 billion pounds of copper. Although silver was consistently alloyed with the copper, silver was generally not recovered and was incorporated into the copper as "fire-refined" copper until an on-site electrolytic refinery was completed in 1982.

In 1995, Copper Range Company, then a subsidiary of Inmet Mining Corporation, closed the White Pine mine. The total non NI 43-101 compliant in-situ resource estimated at that time was 208,207,000 short tons averaging 1.04 percent copper (approximately 4.3 billion pounds of copper). Of this total, 144,904,000 in-situ short tons averaging 1.02 percent copper for approximately 3.0 billion pounds of copper were located in a deposit northeast and separated from the old workings.*

Grunwald, a qualified person as defined in NI 43-101, approved the technical information included in the press release.***

Grunwald has a B.S and Ph.D from South Dakota School of Mines and Geology and an M.Sc. from the University of Hawaii. He is a registered professional geologist in California, Oregon, and Washington and a certified hydrogeologist in California. Grunwald explored and mined copper at Centennial in the 1970s. He also worked at the Ropes Mine near Ishpeming in the 1980s.

In their release, Highland also states, "The White Pine Project is served by excellent infrastructure, including a CN rail spur, a paved highway, a 40 MW power plant, a state-of-the-art copper refinery, a water pipeline to Lake Superior and a water processing plant."**** 

Steve Casey explained that the water pipeline, which runs along the west side of M-64 between Silver City and White Pine, actually brings water from Lake Superior to the water processing plant at White Pine to purify it for drinking water used by local residents of the village of White Pine and residents of Ontonagon.

The water pipeline  could also be used to obtain Lake Superior water for processing ore (separately from drinking water processing). The water processing plant is not a wastewater treatment facility. Should a mining proposal for permits be submitted to the DEQ, wastewater requirements would be determined at that time, Casey explained.

The refinery was used to remove impurities from copper that had been smelted. The copper produced from the refinery was 99.999 percent copper, Casey noted.

"It's still a very serviceable facility," he said.

Should the exploration lead to a mining proposal, the mining company would have to submit a Part 632 permit application for mining. They would also need NPDES (National Pollutant Discharge Elimination System) and air permits before mining.

"That's our job -- to make sure we protect Lake Superior," Casey said. "If we get a proposal we're going to review it and make sure Lake Superior is protected in accordance with the law."

More videos: Highland's Keweenaw mining exploration 

Ross Grunwald's Nov. 10th presentation for KUUF was based on Highland Copper's Corporate presentation dated June 2013. It included details on the progress of the exploration at two of their priority sites in Keweenaw County -- 543S near Gratiot Lake and G-2 near Bete Grise.

In this video clip, Grunwald introduces the company Web sites and offers some background information on the Highland Copper Co. / Keweenaw Copper Co. exploration:

Ross Grunwald, vice president of Highland Copper Company and project manager/vice president of Keweenaw Copper Company, introduces his Nov. 10, 2013, presentation on Keweenaw mining exploration at a mining forum hosted by Keweenaw Unitarian Universalist Fellowship in Houghton, Michigan. He notes the company does not have any plans to do mining at this point, although it is the ultimate goal.*****

In the following video clip, Grunwald explains some of the Keweenaw geology in the area of the copper deposits:

Grunwald continues his presentation on his company's Keweenaw mining exploration with comments on the geology of the area and the chalcocite that characterizes the copper deposit they are exploring.

Here Grunwald outlines the three main priorities of Highland Copper's Upper Peninsula exploration project and points out the locations of the copper deposits:

Grunwald notes Highland Copper's priorities for mining exploration in the Upper Peninsula and notes locations of several chalcocite deposits they are exploring or hope to explore.

The 543S Deposit, located near Gratiot Lake, is the site of considerable exploration activity. In this video clip Grunwald describes the deposit:

Using maps and diagrams, Grunwald describes the geology and the location of the 543S deposit near Gratiot Lake.

Grunwald presents the 543S deposit as chalcocite, a copper sulfide mineral that is not supposed to cause acid mine drainage (AMD). The 543S deposit is known to have some pyrite (which can cause AMD), but Grunwald said the amount of pyrite at that deposit is very small. ******

As of Nov. 10, Grunwald said Keweenaw Copper had drilled 183 holes at the 543S site. He noted a Preliminary Economic Assessment (PEA) on 543S is expected by June or July 2014.

In answer to a question today, Nov. 27, on the sizes of the Keweenaw deposits compared to those at White Pine, Grunwald said the the large tonnage of copper mined at White Pine for 40 years exceeds any amount that would be produced at 543S, for example. However, at present they have published only the historic resources for 543S and G-2.******

"We have not published any current resources," Grunwald told Keweenaw Now today.

He was not able to answer a question on whether Highland Copper, should they decide to mine at White Pine, would mine just the area northeast of the old mine and leave the remediated old mine as is or questions on the infrastructure needs at White Pine. Grunwald said these are questions Highland is still asking at this time.

This map shows the locations of Highland Copper's exploration projects. (Photo by Allan Baker for Keweenaw Now)

In this video clip, Grunwald speaks about the G-2 deposit near Bete Grise, which the company began exploring in January 2013:

Ross Grunwald describes the copper potential of Highland Copper's G-2 site near Bete Grise and Mt. Houghton and explains how copper in the soil aids in locating drill holes during exploration. At the time of this presentation, his company had drilled 37 holes at G-2.

Following Grunwald's presentation, some members of the audience at the Nov. 10th KUUF mining forum asked questions:

In reply to a question from the audience, Grunwald offers some possibilities for smelting the ore. To a question from Pete Ekstrom of KUUF on whether Highland would be the company to do the mining if the exploration leads to it, Grunwald replies that he is unable at this time to predict that.

Here Grunwald fields questions on the number of mining jobs, the difference between modern mining methods and those of the past, and transportation of the ore to a smelting facility.

Grunwald noted he is a proponent of backfill (putting tailings back into the mine rather than leaving open stopes) because it is safer and reduces waste.

Linda Rulison, second from left (foreground), president of FOLK (Friends of the Land of Keweenaw) asks Grunwald if he had an opinion of Copperwood's plan to put tailings above ground rather than backfilling them. Grunwald said he wasn't sure the benefits of backfilling had been properly evaluated for the Copperwood project. (Photo by Allan Baker for Keweenaw Now)

Scott Dianda, Michigan 110th District State Representative, attended the Nov. 10th presentation at KUUF and offered some comments.

"I think that -- from the presentation and the slides -- the material that was presented shows that there's a pretty substantial concentration of copper in three or four locations here that he pointed out," Dianda said.

Asked about Grunwald's claim that support for the project in Calumet is "100 percent," Dianda, a Calumet native, replied, "I can't speak for all the people in Calumet. I see both sides. I see there are a lot of people for the copper exploration and development and some against."

Many local residents still think of mining as it was done in the past, with a lot of employees, Dianda added. They don't realize that modern mining methods require fewer employees. Dianda also expressed concern about the quantities of mining waste that still remain in the local area from the old mining -- especially the stamp sand, which is still used on the roads for traction control in winter in both Houghton and Keweenaw counties.
When he owned a business in Calumet, Dianda noted, he had to clean the stamp sand from the front of his store.

"People should realize that's part of the remnants of the old mining that we're still using," Dianda said.

Richelle Winkler, Michigan Tech assistant professor of sociology and demography, who asked Grunwald how the ore would be transported (See video 8 above), said she was concerned about the number of large mining trucks that might have to use U.S. 41, passing the Michigan Tech campus.

"Most of the students walk across it every day," Winkler said. "I walk across it every day."

Winkler said a mining project in the Keweenaw should have benefits for the local community.

"We need some money to come back locally," she added. "Maybe it's getting a rail line or big improvements in the infrastructure -- something that can support more people in the broader community -- not just the few jobs, because ultimately we're all going to be affected. It's certainly going to affect the people with cabins on Gratiot Lake."

Ann Pace of Hancock said that from Grunwald's presentation she learned a lot about the nature of the copper deposits being explored by this company, the potential extent of those deposits and the cost of the exploration.

Hancock residents Ann Pace, third from left, and her husband, John Slivon, seated next to her, are pictured here at the Nov. 10 KUUF mining forum. Slivon asked questions about the waste rock and tailings. (Photo by Allan Baker for Keweenaw Now)

"I think [543S] is a high-risk site, and that wetland is even more problematical. They [543S and G-2] could both be risky for Lake Superior," Pace said.

Linda Rulison, president of FOLK, told Keweenaw Now she thought Grunwald's presentation was a very interesting talk about the geology of the Keweenaw, but it raised several questions.

"Perhaps one of the most important things about the talk is what it did not say about the nature of mining in the Keweenaw if it should happen," Rulison said. "For example, what would mining look like? Would it be tunneling underground or open pit? If it was open pit, how large and deep would it be? Approximately, how may trucks per day would be running down the Keweenaw and across the bridge to Baraga to be loaded on to the train cars? How would the communities affected handle that traffic? How much financial assurance would be in place for reclamation? While it might be too early to answer those questions specifically, it is not too early to start a conversation about those issues and what the communities involved would find acceptable before it is decided for them by outside interests."

Editor's Update (as of Dec. 10, 2013): Highland Copper has now posted a new December 2013 corporate presentation with more detailed information on their exploration at White Pine and Keweenaw sites. Click here for the new presentation.


* Click here for the full Nov. 19, 2013, press release, "Highland to acquire the White Pine Copper Project in Michigan from a subsidiary of First Quantum Minerals."

** This article is the second in a series on the Keweenaw Unitarian Universalist Fellowship's mining education program. See also our Nov. 8, 2013, article, "Unitarian Universalists mining education series to continue with talk by Keweenaw Copper's Ross Grunwald Nov. 10; video report: mining impacts to Ojibwa land, culture."

*** Canadian National Instrument 43-101 (NI 43-101) is a rule developed by the Canadian Securities Administrators (CSA) and administered by the provincial securities commissions that govern how issuers disclose scientific and technical information about their mineral projects to the public.

**** To learn more about the White Pine Mine and how its infrastructure was used during mining production, see the May 1992 document,"Mine Site Visit: Copper Range Company White Pine Mine," by the EPA.

***** Grunwald noted this presentation is available on the Highland Copper Co. Web site: Click here to access the June 2013 slide presentation. For Keweenaw Copper Company's Web site click here.

****** Click here for Highland Copper's information on Historic Resources. The page includes a reference to the Technical Report by Behre Dolbear, which includes estimates that are historic but not reliable and not compliant with NI 43-101. That report does mention that "pyrite has been reported as an alteration halo around some chalcocite bodies." (See the Behre Dolbear report, section on the 543S sulfide deposit.)

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