US Copper’s updated PEA estimates after-tax NPV of over $1bn
US Copper (TSXV: USCU) has highlighted the economic potential of its Moonlight-Superior project in California with a new independent technical report valuing the asset at over $1 billion after tax (at 7% discount), along with an internal rate of return of 23%.
The preliminary economic assessment (PEA) updates the previous one from 2018 that focused only on the Moonlight deposit. The report, prepared by Global Resource Engineering (GRE), is based on a current resource of 402 million indicated tonnes grading 0.31% copper for over 2.5 million lb. of the metal with the inclusion of the Superior deposit.
The study envisions a mine life of 14 years, producing 903,000 tonnes of copper, plus 12 million oz. of silver and 63,000 oz. of gold. A majority of the production will come from mining the sulfide mineralization at Moonlight-Superior.
US Copper CEO Stephen Dunn said the PEA, which a culmination of several years of planning, drilling, metallurgical testing and engineering studies, confirms “substantial economic opportunity” at current copper prices that can be realized through the development of a series of open pit mines on the property.
For its study, GRE used a copper price of $4.15/lb, which is the weighted average of the 3-year trailing average copper price and the 1-year futures price. It also used the same method for gold and silver price assumptions: $2,320/oz and $27.40/oz.
Dunn also noted that the project represents one of only a “few large-scale undeveloped copper assets in the US that is wholly owned by a junior exploration company.” The plan, he said, is to use these results to attract a joint venture partner as it proceed to the pre-feasibility stage.
Located in Plumas county, northeast California, US Copper’s flagship project is host to the Moonlight, Superior and Engels deposits that cover almost the entirety of the Light’s Creek copper district, whose mining history dates back to the late 19th century.
Engels and Superior are historic mines that produced approximately 161 million lb. of copper, 23,000 oz. of gold and 1.9 million oz. of silver between 1915 and 1930. Placer-Amex took over the project in the 1960s and later made the discovery at Moonlight. US Copper has owned the project since 2013 and has advanced the project with three different drill programs.
In Monday’s press release, Dunn also highlighted that “the project offers considerable leverage to increasing copper prices and the potential available from resource expansion drilling.” For this, GRE has recommended a $5 million phase 1 exploration drill program, followed by a $25 million phase 2 program depending on the results.
US Copper’s shares rose C$0.015 higher to C$0.055 apiece for a 37.5% intraday gain on Monday, for a market capitalization of C$6.7 million.