American CuMo Mining has overcome a significant hurdle in the permitting process for its massive CuMo project in Idaho. The US Forest Service has released a draft supplemental decision notice, finding no significant impact, as well as a supplemental environmental assessment. The move will pave the way for completion of exploration work at CuMo.
On Monday, the company announced that the US Forest Service (USFS) has released a draft supplemental decision notice, finding no significant impact, as well as a supplemental environmental assessment (SEA). That report confirms a 2011 decision from the USFS, and will pave the way for the completion of exploration work at CuMo.
Located near the town of Boise, the CuMo molybdenum-copper–silver project has the potential to become one of the world’s largest and lowest-cost primary molybdenum mines. It is also ranked as one of the top 25 silver deposits in the world.
According to American CuMo President and CEO Shaun Dykes, the company received its exploration permit for the CuMo Project in 2011, but environmental groups challenged both the USFS’s national environmental policy act, the environmental assessment process and the USFS’s finding of no significant impact regarding the project.
In August 2012, Federal District Court Judge Edward Lodge denied four of five claims in the litigation and reaffirmed the USFS’s process, but found that a fifth claim regarding groundwater analysis needed further clarification. The release of a SEA for the project from the USFS addresses that decision, and according to Dykes, it represents a “major stepping stone” for the project.
“What they’ve just done is reissue the decision that says we can go ahead with the exploration, subject to an appeal period which lasts for 30 days,” he said. “Its a hurdle we had to handle … but we were able to get it cleared up, and now we’re ready to proceed.”
The company completed a preliminary economic assessment (PEA) for CuMo in 2009, and is now looking to advance the project towards feasibility.
“We are very pleased with the extraordinarily high level of effort the U.S. Forest Service put into its rigorous environmental review,” Dykes said in Tuesday’s release. “They left no stone unturned and continue to hold us to the highest regulatory standards. That fits perfectly with our Company’s commitment to environmental excellence. The release of the SEA is an extremely positive step in a transparent and ongoing public process.”
Of course, permitting takes time for mining projects, and as a veteran of the mining industry, Dykes is no stranger to the process. When it comes to delayed projects, he suggested that rules and regulations regarding mining in the US are not the problem.
“The process is there, the rules, the regulations, the various agencies, they’ve all got their mandate, and those are quite reasonable,” he said. However, he noted that court systems in the country can sometimes cause lengthy delays in the process.
“No matter how good a job you do, there’s always somebody opposed to it,” he said. “I’ve seen permits take two years, I’ve seen permits take 20 years.”
To be sure, Monday’s release of a new report from the USFS represents a milestone in an ongoing process at CuMo. Still, Dykes stressed that environmental regulations exist for a reason, and that mining companies must take responsibility for doing the work needed to meet those requirements.
“I think [the rules are] fairly strict, but they have to be,” he said.
In terms of the company’s share price, Dykes admitted that American CuMo’s stock is low at the moment, but suggested that’s partially due to legal cases with previous management and with IMER Hong Kong.
However, he stated that the company is very much looking forward to moving ahead with the project. “This is a huge deposit. It’s economic at today’s metals prices, and it’s going to take us about three to four years to produce the feasibility study and the environmental work,” he said.
At close of day on Monday, shares of American CuMo were up 40 percent, or 2 cents, trading at $0.07. Roughly 163,000 shares of the company traded hands, about 2.5 times the daily average.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: American CuMo is a client of the Investing News Network. This article is not paid-for content.