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Curis Resources to benefit from cheap copper production, says Salman Partners

Curis Resources (CVE:CUV) is receiving substantial attention from the market on account of its unique in-situ Florence copper project in south-central Arizona, as the property has the potential to produce the metal at a cheaper cost than traditional mines.

Today, the company received an initial buy rating from equity research firm Salman Partners, along with a 12 month price target of C$5.75, up from Curis' current share price of C$2.93.

Curis' principal asset is the 100%-owned Florence copper project, a 3+ billion pound development-stage property in central Arizona, roughly 65 miles southeast of Phoenix.

The asset is unique, as its in-situ leach production plan, as opposed to conventional open pit, stands to benefit from buoyant copper prices, while at the same time delivering low capex and operating costs.

This is because in-situ leach recovery of copper does not require mining trucks, milling equipment, or even mining engineers, nor does it necessitate waste stripping or exposure to long-lead time equipment.

The process involves drilling holes to a zone of copper oxide minerals that is saturated with water, and then pumping dilute acid through the mineralized zone, recovering copper from the returning fluids.

According to Salman, cash costs for the project should be "well under" US$1.00 per pound.

"The economics of the project are very sensitive to how much of the copper it can recover, so we conservatively assume that, even after six years, it recovers just under half of the copper that is present in the mineralization," noted Salman in its research report.

The Florence project is expected to begin commercial production as early as 2014 according to Curis, but Salman has calculated for start up production to start two years later, meaning the company could be worth more at an even faster rate.

The Arizona property, with permits on the way, showed robust economics in a 2010 preliminary economic assessment report. Florence was estimated to have a 19 year operation, with roughly 72.7 million pounds of copper production per year, and cash costs of US$0.77 per pound, including royalties. A feasbility study is expected by the third quarter this year.