Duluth Metals: Study shows Twin Metals copper-nickel mine near Ely is economically feasible

Duluth Metals Ltd. CEO Kelly Osborne said the "pre-feasibility" study validates the potential of the proposed mine southeast of Ely.

"The foundations of the project are its tremendous mineral resource, technically sound engineering and test work, strong operating margins and location in a state that supports the mining industry," Osborne said.

The independently prepared draft study paid for by Duluth Metals estimates the underground mine would produce 5.8 billion pounds of copper, 1.2 billion pounds of nickel, 1.5 million ounces of platinum, 4 million ounces of palladium, 1 million ounces of gold and 25 million ounces of silver.

Though the full report is expected to be completed in 45 days, highlights released Wednesday show it would cost $2.77 billion to build the mine over three years, but it would earn revenues of $12.11 billion over the first 10 years of the project. The mine would employ about 850 people.

Twin Metals has been a target of criticism from environmentalists who are concerned the nearby Boundary Waters Canoe Area Wilderness would be harmed. Both Twin Metals and a separate copper-nickel mining proposal being developed by PolyMet Mining Corp. near Hoyt Lakes and Babbitt have drawn scrutiny because the metals are bound up in sulfide compounds that can produce sulfuric acid and release other pollutants when exposed to air and rain.

"There's nothing in that report that changes our mind about the fact that a copper-nickel-sulfide mine shouldn't be located next to the Boundary Waters," said Aaron Klemz, spokesman for the Friends of the Boundary Waters Wilderness.

While the Twin Metals mine site lies in a watershed that flows into the wilderness area, its waste-storage facility would be located a few miles southwest in a watershed that ultimately flows into Lake Superior.

"It just spreads risk into two precious watersheds instead of just one," Klemz said.

Twin Metals is a joint venture between Toronto-based Duluth Metals and Chilean mining company Antofagasta PLC. Antofagasta last month gave up its right to take a majority stake in the project, raising questions about financing.

Duluth Metals' stock price fell nearly 23 percent Wednesday to 32 cents on the Toronto Stock Exchange, down from a 52-week high of $1.46 last August.

Twin Metals is still nearly two years away from submitting a specific mine plan to begin the environmental review process. PolyMet, which would be a smaller project, is further along in the regulatory process. State and federal agencies are reviewing public comments on the project's latest environmental impact statement.