Quaterra could be targeted as copper prices rise, COO says
11 MAY 2018
Quaterra Resources [TSX.V:QTA], a Vancouver-based copper exploration company, could become a target in a rising copper price environment, said COO Gerald Prosalendis.
Copper mines often have large resources, large capex and take many years to bring to production, he said. Quaterra’s USD 250m capex, simple metallurgy and five year production timeline will make it an attractive target for majors when copper prices strengthen over the next few years, he said.
It has several copper projects in Yerington, Nevada, a historic mining district. It has hired M3 Engineering to do a prefeasibility study on its MacArthur project, which should “take the risk out,” he said. The PFS will take about 18 months, and the company will need to raise further capital to progress from prefeasibility to a bankable feasibility study, he explained. Depending on industry conditions and copper prices, the company could consider taking on a partner instead of selling outright, likely after its bankable feasibility study is complete, he added.
A previous preliminary economic assessment (PEA) estimated USD 250m in startup capex for the project, but Quaterra is “shooting for less,” he said.
Quaterra is an exploration company, and management has experience building resources and selling them to larger operators, Prosalendis noted. CEO Tom Patton was president and COO of Western Silver Corporation from 1998 to May 2006, when it was sold to Glamis Gold for CAD 1.2bn. Goldcorp [NYSE:GG] subsequently acquired Glamis that same year for USD 8.6bn in an all-stock deal.
The company recently announced a CAD 3m private placement offered to Canadian investors. It has a CAD 16m market cap.