Canadian geologist Shaun Dykes has won the battle of control over a copper and molybdenum exploration project in the upper reaches of Grimes Creek near Idaho.
Now he’s trying to reboot the Canadian company as an American company with American leadership.
“We’re changing the story,” Dykes said.
The former CuMo Project manager defeated former CEO Brian McClay, a Vancouver B.C. attorney, for control over Mosquito Consolidated Gold Mines L
imited, which was exploring the ore body it said was worth $16 billion and could create 1,000 jobs in Boise County for years to come. With the financial backing of Chinese mining executive Hongxue Fu, Dykes returned to the company that dismissed him in 2011 when the fight over control began.
He started by adding two Boise businessmen involved in the project to the board, John Moeller, of Forsgren Associates, which had worked on engineering and environmental work and prominent mining attorney and Northwest Mining Association board member Joe Baird. Then he changed the name to American CuMo Mining Corp.
“They’re rebranding,” said Baird as he attended a hearing on mining before the Idaho Senate Resources and Environment Committee.
“Our plan now is to open up a Boise office and the project will be managed and run out of Boise and that’s the way it should be done,” Dykes said.
Dykes was Vancouver Monday but he said he would soon move to Boise and lead the company’s only project, the Boise Basin project that he says could turn into one of the largest open pit molybdenum mines in the world.
As he and McClay were battling over the company, environmental activists were fighting its efforts to build roads and drill pads so it could maps the ore deposit. A federal judge ruled that the Forest Service had acted arbitrarily and capriciously by approving drilling the without examining potential effects to groundwater.
The Idaho Conservation League, Idaho Rivers United, the Golden Eagle Audubon Society and others have vowed to fight the project because it’s in the Boise River watershed, upstream from a water source for half a million people.
The new company is working with the Forest Service to gather the groundwater data it had already collected in a way that will satisfy the judge, Dykes said. Then it will begin putting together the baseline environmental information it needs if it is going to get a permit for the mine.
After the main narrative that CuMo is an Idaho company, Dykes is dealing with another public relations challenge, the price of molybdenum. It’s so low now at $11 to $12 dollars per pound that Thompson Creek laid off more than 100 workers at its mine 35 miles southwest of Challis.
If the price doesn’t improve Thompson Creek officials say they may close the mine and lay off the rest of its 300 workers in 2014 until the price rises. But the CuMo mine will be so big and its deposit is rich enough that it would be operating at a profit even at these prices, Dykes said.
“Once we start the CuMo mine will always be able to keep on delivering the profit, the taxes and the wages,” Dykes said. “As Thompson Creek winds down over the next 10 years CuMo can gear up.”
But after a huge corporate fight can CuMo attract the kind of investment it will take to get to the permitting process, let alone through it?
“The reason we couldn’t get the funding before was because there was no trust in the management,” he said.
Even though CuMo is moving to Boise its stock will continue to trade on a Canadian exchange and its chairman of the board, Hu, is Chinese.
“Given the extent of the CuMo deposit we are getting interest from all parts of the world,” Dykes said.