In the early 1990s, then-Placer Dome CEO Tony Petrina endured considerable criticism when the company purchased the Mt. Milligan copper-gold property in British Columbia.

Some suggested that the $230 million purchase-considered expensive at the time-partly contributed to Petrina's decision to retire from Placer.

By the mid-1990s, the project had been mothballed as being too pricey in the mid-1990s during a time of weak metal prices. The project's complex geology and low grades reinforced that decision.

However, by 2005, newly appointed Placer Dome CEO Peter Tomsett reassessed the project's economics in the light of advances in understanding the deposit's geology and higher gold and copper prices. His renewed interest in Mt. Milligan was stymied, however, when a short time thereafter, Placer Dome was acquired by Barrick, which sold Mt. Milligan to Goldcorp.

At the time, Goldcorp was busy developing other projects, prompting former Placer Dome geologists to form Terrane Metals, which picked up Mt. Milligan, as Goldcorp retained a 70% interest in Terrane.

Rob Pease, formerly Placer's General Manager, Canada, Exploration and Global Major Projects, had worked in projects for many years outside of Canada, but felt Mt. Milligan met his criteria for a good mining project prospect.  He had also served as project manager for Mt. Milligan, developing a good relationship with two nearby First Nations bands in the 1990s.

Pease told Mineweb Tuesday that Mt. Milligan also has earned the support of government officials in British Columbia and a number of politicians. If developed, Mt. Milligan would provide 400 full-time jobs and pump $80 million into the local economy.

Placer Dome's Senior Geologist Darren O'Brien, former Cortez Hills Project Manager Peter Marshall, and former Placer Chief Geologist joined Pease in forming Terrane Metals, (TSX-V: TRX).

Former Placer Vice President Keith Ferguson is an environmental consultant for Mt. Milligan's feasibility study and environmental impact assessment. Mt. Milligan was permitted by Placer Dome in 1993, but the certificate expired in 2003.

 During a conference call Tuesday morning, Goldcorp Executive Vice President, Corporate Development, Chuck Jeannes, another former Placer Dome executive, told analysts and journalists that We see Mt. Milligan as a potential project that could somewhat offset the loss revenue from Alumbrera going forward. He explained that Alumbrera has eight years of remaining mine life.

We're not afraid of a little copper revenue continuing. It's served us (Goldcorp) well. We think the (copper) cycle is going to continue for some time, Jeannes advised.

Goldcorp announced Tuesday it has entered into a letter of agreement with Terrane concerning a loan guarantee and a joint venture option agreement. The mega-gold miner will guarantee a non-revolving term credit facility of up to $40 million to advance Terrane's long lead-time capital equipment purchase program in support of the construction of a 60,000tpd open pit mine and process plant.

The agreement also gives Goldcorp an option to convert its 70% equity interest in Terrane into a participating joint venture interest in the Mt. Milligan project.  If the option is exercised two Goldcorp Terrane board members will resign and the joint venture shall be government by a management committee of representatives from Terrance and Goldcorp.

Wardrop Engineering recently complete a feasibility technical report of the project, which is located 155 kilometres northwest of Prince George in north-central BC. The local communities of Mackenzie and Fort St. James are within commuting distance.

The study found that Mt. Milligan's copper-gold porphyry deposits contain a measured and indicated resource containing 2.52 billion pounds of copper and 6.7 million ounces of gold. Proven and probable mineral reserve is estimated at nearly 1.6 million pounds of copper and nearly 5 million ounces of gold. The matrix range of the study was from $2/lb to $3.50/lb for copper, and from $600/oz to $900/oz gold.

Wardrop estimated a total project capital cost of $917 million. On-site operating costs were estimated at $71.2/t of ore mined. A 15.3-year mine life was calculated.

If the project receives its permits and sufficient financing according to schedule, start-up is planned for the first quarter of 2012.

Jeannes told analysts that Terrane has done a top-notch job with the feasibility study, advancing project permitting and First Nations relationship, and also preparing for construction of a very substantial copper-gold project in British Columbia.

Nevertheless, he added, Terrane's apparent ability to finance the project has lagged a bit. Jeannes explained that from a debt standpoint, today's tight credit markets make it difficult for a small company without currency cash flows to trap into traditional debt markets.

Meanwhile, on the equity side, the share performance has been held back a bit, I think, by uncertainty in the market as to Goldcorp's intentions regarding our equity position, he added.

To rectify the situation, Goldcorp backstopped a debt facility from the Bank of Montreal that will allow Terrane to immediately advance Mt. Milligan and provide Terrane flexibility as to the nature and time of future financing, according to Jeannes.

We hopefully provided certainty to the market as to Goldcorp's intentions. We're obviously very supportive of Terrane's work in Mt. Milligan. We are getting more closely involved in both the company and the project and we have now obtained an option to convert our equity position into a direct working interest, he concluded.