Horizon, Host: Ted Simons

February 2, 2012


Host: Ted Simons

Florence Copper Project


  • Curis Resources CEO Michael McPhie discusses his company‚Äôs proposal to mine copper near the Town of Florence.
Guests:
  • Michael McPhie - CEO Curis Resources
Category: Business/Economy   |   Keywords: copper, florence, project, around arizona,

View Transcript
Ted Simons: Good evening and welcome to "Arizona Horizon." I'm Ted Simons. Attorneys for the Maricopa County sheriff's office will meet with Justice Department officials next week. It will be the first such meetings as allegations of racial profiling against the sheriff's office were released in December. The meeting may not keep both sides out of court. The Justice Department recently criticized what it calls the MCSO's dismissive and inaccurate statements that suggest an unwillingness to resolve a matter. Curis Resources is a Canadian company that plans to extract a huge body of copper, or about 400 feet below the surface of land the company owns and leases near Florence, Arizona. The Florence Copper Project is not your traditional mining operation. It won't require digging huge tunnels or open pits. Instead, the project is designed to use a weak acid solution to dissolve the copper and pump it back to the surface. But, the plan has been met with resistance from the Florence town council and a development company that wants to build homes in the area. They have concerns about property values and the safety of the town's water supply. We'll hear from the opposition next Wednesday, but tonight, we hear from Mike McPhie. He is President and CEO of Curis Resources, which owns the Florence Copper Project. It's good to have you here. Thank for joining us.

Michael McPhie: Thank you very much.

Ted Simons: Where exactly is this site? How close to Florence, what are we talking about here?

Michael McPhie: Well, the site is 1350 acre piece of property within the town limits of the town of Florence, and it did not used to be. A few years ago it was in the county, but the town and the annexation of land property the, brought the property to within the town limits, so it's 1.5 miles from downtown and three miles from the housing development to the north.

Ted Simons: South of the highway?

Michael McPhie: Yep.

Ted Simons: And now, you mentioned how many acres. That's total. What you plan to do, mining operations originally on state --

Michael McPhie: Sure, sure. So, the deposit area is only 200 acres, approximately, 212 acres. So, about 15% of our land is actually the copper deposit. Remember, it's buried 400 feet below the surface. 400 to 800 feet, in that range, so it's deep, and so we're going down that deep area to, to extract the copper. The, the state land portion is 160 acres. That covers half the deposit and the remainder is on private land.

Ted Simons: State land is the rectangle.

Michael McPhie: So if you look at that, the blue, it's, so that covers half the deposits.

Ted Simons: And how much copper are we talking about? Let's talk about what you are able to mine right now from the state land.

Michael McPhie: Well, there is approximately 3 billion pounds of copper in the ground, and half of that is on state land.

Ted Simons: Ok, what kind of mining are you planning to do? It's called insitu mining. Give us a better description.

Michael McPhie: Insitu is a Latin term for "in place." We're not digging a hole in the ground. What we're doing is a series of wells inject a very weak vinegar, lemon juice strength solution into the ground. It dissolves the copper, and we bring it up. It goes through a processing plant, and is turn into pure copper cathode sheets. It's a process that's proven, used around the world for extraction of potash and uranium and copper in Arizona. It has been used in Arizona before, and we call it a next generation copper deposit. Because we're not involving traditional mining, it's very -- it's technologically advanced, and it is something that, that we think is, actually, a real future opportunity for the state to really advance us to a world class level.

Ted Simons: There is some questions about the operation, though, in the sense that it's a stand alone operation as opposed to insitu mining in coordination with open pit or bigger mines. That is unusual, isn't it?

Michael McPhie: Well, I don't know if it's unusual. Mining operations, you know, there is all sorts of ways to get the ore out of the ground. There is underground. There is open pit mining, there is ramp development. In this case, Insitu is all we're proposing. So what people associate mining in Arizona with, the noise, is not what you see here. There is no noise. There is no explosives. There is no trucks. All the things that you associate, it's a very quiet, very low impact way to get it out of the ground.

Ted Simons: Let's talk about where the copper is in the ground. You mentioned 400 some odd feet down there. Correct me if I am wrong, but you have got a water, ground, groundwater here, one aquifer, a clay kind of a barrier, and then another aquifer, and then the copper? Is that accurate?

Michael McPhie: Correct, the copper is in what's called the bedrock, so most people think about bedrock, the granite rock that you see above ground sometimes, it's the hard rock, it's, it's deep below, just like you outlined, actually, that clay layer is called an aquatard. It's the bottom of a lake, so millions of years ago this formation was created over the top, and mother nature has been very, very kind to us on this project, in the sense that in the ground, this rock is all broken up naturally. We don't have to do any of the water that's put into the ground is done under almost no pressure. It's a very gentle rinsing of the copper off the fractures of the rock, and we bring it up to the top. So, yeah, it's well below where any water is extracted in the region.

Ted Simons: Are there concerns, though, if you are going water, clay table, more water, then copper, are there concerns about going through two aquifers there? Two potential sources, one source of water and any potential future source?

Michael McPhie: So, this project requires 19 different permits from the state. The Federal Government, the Environmental Protection Agency, and the county. The EPA are the authority around the operation of the wells. The wells, themselves, that are up to 1,000 feet deep into the ground are concrete encased. So there are 12 inches, and the outside is concrete, and you have a PVC tube on the inside. It's all mechanically tested at all times, before we're allowed to put one drop of fluid into the ground, every well has to be fully tested so that there is no possibility of any leaks. And secondly, is there is continuous monitoring of the site. We know what's going on in the ground, and one of the things we're talking about locally with the community is about having real-time monitoring, and have the monitoring on a computer or on the web so people can see what's going on at all times. So that they have the confidence in what we're doing.

Ted Simons: You mentioned EPA requirements and such. The opponents of the project, but one of their major concerns, the water supply and the idea that there was an EPA test in 1996, somewhere along those lines, and subsequent testing by different agencies, different folks that suggested that there was some leaching here of material, maybe some radio chemical. They are bringing up radio chemical possible leakage here. How do you respond to that?

Michael McPhie: You know, there's been a lot of things that have been said, and I think what you have to do is look at the signs. The data regarding water quality is publicly available to anybody. They can go to the EPA or ADQ and get copies of it. The fact of the matter is, the former owner of the property, BHP minerals, did a pilot test on here, and they had an ejection recovery wells, and that water quality since that production test in the late 1990s has shown for 14 years that there has been no impairment of water quality of any type. So, this is public record. This is proof of concept, and so, to suggest that, I don't think is entirely -- it's not accurate, and B, it's intended to -- I'm not sure why somebody would put that out if it's not the truth.

Ted Simons: So you are saying if, if EPA found something in the 1990s regarding this, this radio chemical, some sort of elevated levels, something like that, you are not buying that?

Michael McPhie: No, it's not true. No.

Ted Simons: And how many wells are we talking about here?

Michael McPhie: We would operate approximately 300 wells in full production at a time.

Ted Simons: And --

Michael McPhie: And those are injection recoveries, and one thing that's important about that, is each injection well is surrounded by four recovery wells, so the idea of the science is like you can imagine down the center, you are putting water in gently down into the well, around each injection well there are four recovery wells with pumps drawing the water up. Something that we use here is called hydraulic control. That's the idea that you always control the water, and essential, what happens is the four outside walls are like straws in the ground. And they draw the water up, so it goes down, across, and then is brought up to the top. And so there is -- your complete containment of the water at all times.

Ted Simons: How long a process? As far as the mining operation? I have heard 15 to 20 years?

Michael McPhie: Yeah, this is a generational project. This is 20 years, this is hundreds of jobs. This is millions of dollars in investment, and we intend over the next three years to be investing in the range of 300 million to bring this into production, and, and it's a 20-year project, 25 years, when you factor in the closure side of it. So it's a big deal.

Ted Simons: What happens to the land, though, when the project is over?

Michael McPhie: Well, you know, and this is -- I really appreciate that question because this is where things get very exciting. When you typically think of industrial sites, you know, the question of planning for closure is a big part of what we're doing. So, what we're trying to do with the town and talk with them about land uses, this idea of a first life and a second life, the first life, on a boat, 400 acres of the land, a third of our property, we need it for the project, and then the rest of the land, we're going to use for community amenities. We would like to have a dialogue with the community of what they would like to see, whether it's soccer fields, ballparks, agricultural education, these things, while we're in operations, and when we're finished all you are left with, you have a series of these wells, right, they sit about three feet off the ground, and they can be removed. You pour concrete down them, and they are covered up completely sealed. And you cover them up, and you never knew that you were there. It's tremendous.

Ted Simons: You mentioned having a dialogue with folks out there. And it sounds right now like the town council is, is unanimously, or close to it, against this project. What's going on here because it sounds like they don't want any part of it. They tried to annex land to keep further mining operations from happening, and now, it sounds like, you are kind of putting things on hold to see maybe if that dynamic can change with a new town council? What's going on out there?

Michael McPhie: Thanks for the question. First off, we very much respect the town. We have been in the community. We bought our property in 2009. And since that time, we've been trying to carry on a very, very, you know, deliberate and, and constructive dialogue with people. We have held a number of open houses. We have taken upwards of 600 people on-site tours to help them to understand what it is. And unfortunately, the dialogue has been confused by, I think, the facts, and part of the problem is, is that our permitting process is undergoing. We need 19 permits to be in production. That's just about two-thirds of the way through now. So, there is a lot of dialogue around the science and the protection of water quality and things like that, that unfortunately, has been, has been created in a way in which I think that people are confused about what's going on. Now, in terms of the council, we see things changing, the town did its own survey and showed we had two to one support by the citizens. We have had challenges working with the council, I will acknowledge that, but land use zoning processes and, and debates over competing land uses are a common thing in Arizona. It happens, right. And so we see this as a land use zoning discussion that's going to take time to work it through, and we're here for the long haul and committed to trying to find a solution that people can live with.

Ted Simons: And some landowners out there, and certainly one development operation out there, they are looking at what you are trying to do, and they are saying that this is too close to what we're trying to do. Too close to existing wells. Certainly too close to what the wells they plan for in the future, and they are seeing property values, they think, will plummet if folks know that a mine is there, or was there. How do you respond?

Michael McPhie: First off, the mining property is not new. This was discovered 40 years ago, it was in production 12 years ago. We bought our property in 2009, and that was the housing developer bought theirs six or seven months after us with knowledge of who we were and knowledge of what we were supposed to do.

Ted Simons: They are saying that they did not have full knowledge, that it was, by the nature of the real estate business, you cannot really flow that kind of stuff until -- so, they are saying otherwise.

Michael McPhie: Well, you know, our group has been around for 30 years. Curis Resources is part of the group that's been there. We've been in this business a long time. We are a mining company. We bought the property public. We were public about what our intentions were. We were in active dialogue with the town. So, that's hard for me to accept that they did not know who we were and what we were planning on doing.

Ted Simons: Ok. So, what is next as far as this project is concerned? It sounds like you pulled a permit application for a while to do your own testing. Why, why was that done? Because, previous tests were done.

Michael McPhie: That's not true. The fact is this project is, has already received all its permits. All the commercial operating permits for the EPA and ADQ and the other agencies and we are amending and updating those. We're going through a dialogue with the agencies. And in that dialogue of permitting, there is questions that go back and forth. You submit five binders of material, and what you go back are questions and clarifications, and that's a normal part of permitting. What we decided to do because of the discussion with the state land department, which is extremely supportive of us. I think Maria Barr, the state land commissioner, said this is one of the most valuable state trust land pieces in the state's history. The beneficiaries are that are all sorts of the beneficiaries of the state line. More than $100 million worth of royalties that would be paid by us to the state land. And that is to the benefit of all Arizonans, not just Florence but all Arizonans. So what we are doing is focusing on -- we always have, we have not changed gears at all. We have gone and said, we're going to do a phase one development program, and we're going to do a phase 2. 1 is what we refer to as a production test, and we're going to refine some of our engineering, and we're going to focus on copper recovery rates, and we're trying to make a better project. We're looking at trying to lower water use. We don't use a lot of water in this process, but we want to use less, so we're doing -- it's an optimization program, and it's -- the same thing that we've been saying we do right from the beginning.

Ted Simons: Last question, I want to ask this of the opponents, and last one for you. Someone watching, in Florence, planning to move to Florence, someone with interest in that area. What do you say to them?

Michael McPhie: You know what, with the housing economists have said, is what drives the economy, or what's going to drive housing is employment centers. We are providing an opportunity here for a lifetime generational project to create high paying, head of household jobs, if you look at the mining industry in the State of Arizona, the average wages, over 100,000, so we have an ton here to do something safe, something very, very progressive, and you know, we use a thing called made in Florence, and we got this idea that, that, that we can work with people that actually start making stuff in America again, and that's what we're trying to do, and we want to be partners with the community, and I think homeowners have nothing to worry about.

Ted Simons: It's good to have you here and thanks for joining us.

Michael McPhie: I appreciate being here. Thank you.

Ted Simons: And you can hear from opponents of the Florence Copper Project, including the Vice Mayor of Florence next Wednesday right here on "Arizona Horizon."


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