The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Feasibility study details optimized plan for Northern BC mine North of 60 Mining News – November 12, 2021
Stacks of core from historical drilling at the Kutcho copper-zinc mine project in Northern British Columbia.
There will be impressive financial returns for any mining company that develops a mine at the Kutcho copper-zinc project in Northern British Columbia, according to a feasibility study prepared for Kutcho Copper Corp.
"The feasibility study represents a major milestone for Kutcho Copper as we continue to advance the high-grade Kutcho copper-zinc project towards a development decision," said Kutcho Copper President and CEO Vince Sorace.
Located about 120 kilometers (75 miles) east of the community of Dease Lake and Highway 37, Kutcho hosts 17.34 million metric tons of proven and probable reserves averaging 1.58% (603.2 million pounds) copper, 2.31% (882.3 million lb) zinc, 0.39 grams per metric ton (214,700 ounces) gold, and 27.9 g/t (15.5 million oz) silver.
Based on these reserves, the feasibility study details a combined open pit and underground mine feeding a 4,500-metric-ton-per-day ore sorting and milling operation that would produce 533 million lb of copper, 841 million lb of zinc, 129,700 oz of gold, and 10.6 million oz of silver over an 11-year mine life.
This is a roughly 155 million lb increase in copper and a 368 million lb increase in zinc production over the same mine life when compared to a prefeasibility study completed in 2017.
"The significant redesign and engineering of the project delivers a mine plan that is a predominantly open pit mining operation with the concurrent development of two underground mines," said Sorace. "The mine plan has resulted in a technically robust and capital-efficient project with a minimized footprint."
This optimized operation is forecast to generate an after-tax net present value (7% discount) of C$461 million, an internal rate of return of 25%, and pay back the C$483 million in capital needed to develop the mine in 3.4 years at US$3.50/lb copper and US$1.15/lb zinc.
At roughly current metal prices – US$4.50/lb copper and US$1.57/lb zinc – the after-tax NPV (7% discount) more than doubles to C$931 million, and the IRR climbs to an impressive 41%.
"The results of the feasibility study highlight the attractive economics of the Kutcho project which are resilient at lower metal prices, very attractive at base case prices and exhibit significant leverage to rising prices as reflected in spot metal prices with a C$931 million after-tax NPV7% and a 41% IRR," said Sorace.
The Kutcho project is located within the overlapping territories of the Kaska Dena and Tahltan nations, and the company has worked closely with these First Nations during the design process for the proposed copper-zinc mine.
In July, Kutcho began negotiations with the Tahltan Central Government, the administrative governing body for the Tahltan Nation, for economic participation agreements for the proposed mine.
Kutcho has also initiated discussions to upgrade the existing 120-kilometer- (75 miles) long Boulder Trail access road to the mine site in partnership with Tahltan and Kaska Dena nations.
The Kutcho Copper project is already in the British Columbia assessment process and Kutcho does not anticipate that a federal impact assessment will be needed to permit the financially robust mine detailed in the feasibility study.
"We believe that the results of the feasibility study mean that Kutcho Copper is now one of the most undervalued copper investment opportunities in North America," said Sorace.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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