Augusta shares surge as giant Arizona copper mine clears hurdle

Augusta Resource Corp. (TSE, NYSEMKT:AZC) jumped 8% higher on Friday after announcing the US Forest Service has completed the final environmental impact statement for its massive Rosemont Copper project and released a draft of the so-called Record of Decision.

"The issuance of the draft ROD, which includes the approval of the preferred Barrel alternative, provides the roadmap for the operation of the Rosemont Copper Project," said Augusta President and CEO Gil Clausen.

The draft ROD impact statement follows an exhaustive six-year review process and will be open for comments for a period of 45 days expected to commence on January 1, 2014.

The Rosemont Copper project near Tucson, Arizona would be the third largest copper mine in the US and Augusta now expects a water use permit for which it has already secured the rights in the first quarter of next year, with construction starting in the second half of 2014.

Rosemount mine construction and commissioning is pegged at $1.23 billion of which more than $100 million has already been spent with planned production scheduled for 2015.

Augusta has inked a deal with streaming company Silver Wheaton which in exchange will inject $230 million in up-front cash payment for 100% of Rosemont's life of mine gold and silver production. The Vancouver-based company also has a $106 million deal with Korean investors, leaving it to raise $890 million for capex.

In early afternoon dealings Augusta shares were trading up 7.9% at $1.50 on the NYSE MKT, giving up gains of more than 18% enjoyed at the open.

The $216 million company is still showing losses for 2013 – it is down 39% year to date.

At full tilt Rosemont could account for about 10% of annual US copper output, producing 243 million pounds of copper per year, 5.4 million pounds of molybdenum, 2.9 million ounces of silver and small quantities of gold as a by-product over a mine life of more than 22 years.

Augusta estimates production costs of just $0.87 a pound of copper compared to today's price for the red metal of $3.35.