What were main developments for Arizona Sonoran Copper (ASCU) over the past year?

2024 has been transformational for the company. ASCU announced an updated mineral resource estimate (MRE) for our Cactus project in July 2024, indicating a total resource of approximately 7.3 billion lb of contained copper in the measured and indicated category and 3.8 billion lb inferred. This is a significant increase from the 5.2 billion lb of copper in the measured and indicated category and 2.2 billion lb inferred we had roughly a year ago. We quickly followed the MRE update with an updated Preliminary Economic Assessment (PEA) in August, outlining an 86,000 short t/y mine plan over a 31-year LOM. The study details a heap leach and SXEW open pit operation with the intent to produce copper cathodes directly onsite for use within the US. 

What is the financial outlook for the updated Cactus project?

We used a price of US$3.90/lb of copper and reported a post-tax NPV using an 8% discount factor of US$2.03 billion, and an IRR of 24% with a 4.9-year payback period. On average, we are showing 86,000 short t/y of cathode production, which is 172 million lb/y of copper, totaling 5.3 billion pounds of copper over the 31-year LOM. 

We gained legal title to the MainSpring property in March 2024, allowing us to include the MainSpring resource in the latest numbers. MainSpring brings an additional 1.9 billion lb (all inferred) of copper to the project. A significant amount of mineralization is close to the surface which allows for open pit mining, and MainSpring advances to the north and connects into Parks/Salyer. 

Acquiring the MainSpring property changed the scope of the Parks/Salyer deposit to an open pit and therefore lowers mining costs, with the ability to access more tons. 94% of the approximately 900 million t of mineralized material now comes from open pit mining. Drilling on the MainSpring property extended the Parks/Salyer mineralization 900 m south and from within 42 m of surface. Now, of Cactus’ 889 million short tons processed in the mine plan, Parks/Salyer as an open pit contributes 69% of the oxides and enriched and 34% of the primary sulphides.

How has the community responded to the Cactus mine?

We have strong support from Casa Grande and Pinal County, who remember the economic benefits of the historic mine. Since acquiring the asset from the Arizona Department of Environmental Quality in 2020, we have maintained constant communication with the community and our regulators. Our entire land package is on private land, streamlining permitting efforts within the state. We are grateful to have a good relationship with state regulators who acknowledge that the Cactus project could generate in excess of US$10 billion in economic activity for Pinal County.

What are the catalysts ahead for ASCU?  

Moving forward, capital will be delegated to infill drilling to move as much of the Inferred resource into the Measured and Indicated category ahead and continuing our metallurgical programs relevant to a PFS in the first half of 2025. Based on this, we will release a PFS, including the Nuton scenario, leading to Nuton’s decision on investing as a JV partner. Regardless of Nuton’s decision, we will initiate a definitive feasibility study (DFS), in the second half of 2025. Assuming a financial investment decision in early 2026, we anticipate first copper cathode production by late 2027 or early 2028.

What is ASCU’s agreement with Nuton?  

Arizona Sonoran's investment from Nuton is driving exploration, focused on expanding primary sulfides. Our partnership ties into the integrated PFS set for the first half of 2025, with Nuton aiming to discover additional primary material. If phase two column tests prove as successful as those in 2023 and meet key financial triggers, including boosting our NPV by 20% with MainSpring now included, Nuton can earn a 35% to 40% stake in the project. Should they exercise this option, it would inject substantial capital into Arizona Sonoran, with both parties sharing future costs.

Traditionally, copper primary sulphide recovery would require a mill with a flotation circuit, leading to higher energy, water use and carbon emissions. Nuton technology, however, leverages a standard heap leaching pad and solvent extraction-electrowinning plant to efficiently recover copper from low-grade primary sulfide deposits.