Highland Copper: U.S. Copper Production in 2029 | Barry O’Shea and Jimmy Connor

Key Concepts

• Copperwood Project: A fully permitted, near-term copper development project located in Michigan’s Upper Peninsula.
• Critical Mineral Status: Copper’s 2025 designation as a critical mineral by the U.S. government, facilitating access to federal funding.
• Project Financing: A strategy utilizing a mix of debt (including U.S. Exim Bank), grants, and equity to fund construction.
• Bankable Feasibility Study (BFS): The technical and financial blueprint required to secure binding debt and investment decisions.
• Jameson Cell: A flotation technology used to improve copper recovery rates.
• All-In Sustaining Cost (AISC): The total cost of producing copper, including mining, processing, and sustaining capital.

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1. Project Overview and Strategic Importance

Highland Copper’s Copperwood project is positioned as a rare, fully permitted asset in the United States. Located in Michigan’s "Copper Country," the project benefits from a historical mining legacy and current U.S. government initiatives to secure domestic supply chains. The company is currently transitioning from a developer to a builder, focusing on detailed engineering and site preparation.

2. Resource and Economic Potential

• Resource Size: 3.7 billion pounds of copper defined across all categories, with 1.9 billion pounds in the "Measured and Indicated" category (54 million tons at 1.5% grade).
• Mine Life: Currently estimated at 11 years, with significant potential to extend to 15–20 years by converting additional resources.
• Production: Targeted annual output of 30,000 tons (approx. 70 million pounds) of copper.
• Cost Structure: Cash costs are approximately $2.00/lb, with an AISC of $2.50–$2.75/lb.
• Price Leverage: The project shows significant "torque" to copper prices. At $4/lb, the NPV is $170 million; at $5/lb, it triples to $507 million; and at $6/lb, it reaches approximately $850 million.

3. Financing Framework

The company aims to source 75% of its capital from federal and state funds.

• U.S. Exim Bank: Highland has received a $250 million letter of interest, covering roughly 60% of the estimated $400 million CapEx.
• Capital Strategy: The company recently sold a non-core asset to eliminate debt and recapitalize, ensuring sufficient runway to reach a final investment decision (FID) by early 2027.
• Binding Debt: The transition from a letter of interest to a binding product requires reaching 40% engineering completion and a bankable feasibility study, expected in 2026–2027.

4. Operational Milestones and Timeline

• Engineering: Currently focused on reaching 40% engineering completion to de-risk the project for lenders.
• Optimization: Implementation of the Jameson cell has already improved copper recovery rates by 2%.
• Construction: Targeted for 2027–2028, with potential production commencement in the second half of 2029 or 2030.

5. Leadership and Governance

Highland Copper has bolstered its team to ensure execution capability:

• Peter Henstra (CFO): Former founding executive at Capstone Copper.
• Trace Arlaud (Project Director): Former execution director for Rio Tinto’s Resolution Copper.
• Shareholder Base: Backed by long-term, institutional investors including Orion Mine Finance (28%) and Condor (sub-20%).

6. Notable Quotes

• “The US is in large part going to help us solve that [capital] problem... there are considerable pools of capital available at a host of federal agencies.” — Barry (CEO) on the shift in U.S. mining policy.
• “First drill hole to production in the US is the best part of 15 to 20 years. Feel very comfortable that we are... one of the most near-dated copper developers out here.” — Barry on the project’s competitive timeline.

7. Synthesis and Conclusion

Highland Copper is uniquely positioned as a "near-term" producer in a market currently suffering from a supply-demand imbalance. By leveraging its fully permitted status and aligning with U.S. critical mineral policies, the company is actively de-risking its path to production. The primary catalysts for the next 12–18 months include the announcement of federal/state grants, the completion of an integrated mine plan, and the delivery of an updated feasibility study. The company’s goal is to transition from a valuation based on "Net Asset Value" discounts to one based on "Price-to-Cash-Flow" multiples as it moves toward construction.