Developing Copper Assets in Canada’s North
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Copper North Mining Corp. (TSXV:COL) is a mining exploration and development company committed to becoming a mid-tier copper producer. Copper North is exploring and developing three properties in Canada: Carmacks in the Yukon territory, Redstone in the Northwest Properties, and Thor in Northwest British Columbia.
The Company’s flagship property is the Carmacks Copper Project in the Yukon Territory of Canada. The project has a two NI 43-101 compliant mineral resources. The first was developed as part of the 2016 PEA, and covers the proposed open-pit. The measured and indicated resource in the open pit is of 11.98Mt@ 1.07% copper, 0.456g/t gold and 4.58g/t silver for 282 million pounds of contained copper, 171,800 oz of gold and 1,705,800 oz of silver.
The second resource estimate is for the Southern Extension zones (2000S, 13 and 12) and was updated in 2018. The oxide measured and indicated resource is of 4.3 million tonnes at 0.47 percent copper, 0.12 g/t gold and 1.91 g/t silver. The sulphide measured and indicated resource is of 4.4 million tonnes at 0.62 percent copper, 0.13 g/t gold and 2.3 g/t silver. The company plans to continue drill work in 2018 so as to continue resource expansion.
In 2016, Copper North updated their previous PEA, focusing on the open-pit zones 1, 4 and 7. With a mine life of seven years and a base case of US$2.75 per pound of copper, the mine would have an pre-tax NPV (8 percent) of C$56 million and a pre-tax IRR (8 percent) of 14.2 percent.
Copper North is in the midst of re-designing and re-engineering the production plan at Carmacks in order to complete a new Feasibility Study aimed at reducing capital and operating costs and de-risking the project for permitting.
- High-grade oxide copper deposit with significant recoverable gold and silver
- Early-stage copper-gold-silver sulphide mineral resource
- PEA for the Carmacks Project filed October 2016, NI 43-101 report
- Carmacks Project open-pit Oxide Measured & Indicated Resource of 11.98Mt@ 1.07% Cu, 0.456g/t Au and 4.58g/t Ag for 282 M lbs contained Cu, 171,800 oz Au & 1,705,800 oz Ag.
- Additional Oxide resource of 4.3 million tonnes at 0.47 percent copper, 0.12 g/t gold and 1.91 g/t silver in oxide and 4.4 million tonnes at 0.62 percent copper, 0.13 g/t gold and 2.3 g/t silver in sulphide.
- Yukon Territory, Canada: low political risk jurisdiction, stable tax regime, current exchange rate favourable for investors, and 100% ownership.
- Road accessible with proposed 10 kilometer transmission line to the grid.
- Cathode copper: reduced transportation and treatment expense compared to copper concentrates.
Flagship Property – Carmacks Copper Project
The Carmacks Copper Project is located 192 kilometers north of Whitehorse and 38 kilometers northwest of the town of Carmacks in Canada’s Yukon Territory. The property lies on the Klondike Highway, has excellent road access and a planned 10 km transmission line to the Yukon power grid. The shipment of cathode copper can be shipped to several sites in Canada and United States.
Mineral Resource and Mining
The following table summarizes the measured mineral resource and indicated mineral resource estimates for zones 1, 4 and 7 that total 11,980,000 tonnes grading 1.07% total copper of which 0.86% is soluble copper. The mineral resource estimates also include substantial gold and silver. The mineral resources in the oxide classification form the basis for the potentially mineable mineralization by open pit methods. The present PEA does not include inferred mineral resources in the economic calculations. The PEA is preliminary in nature and there is no guarantee that any of the mineral resources will be converted to mineral reserves, or that the PEA will be realized.
Mineral Resources at a 0.25% Total Copper Cut-Off, Zones 1, 4, and 7
Preliminary Economic Assessment (PEA)
A new PEA released in 2016 was produced to reflect the new leach and development plan, and was based on the mineral resources in Zones 1, 4 and 7 that indicate an approximate 7 year mine life based on the mineral resource update reported in January 2016. However, the new mineral resources in zones 2000s, 12 and 13, were not included in the PEA. Instead, the estimated mineral resources in zones 2000S 12 and 13 will be integrated into a later development plan.
Highlights from the PEA (with a base case of US$2.75 per pound of copper) include:
- Pre-tax NPV (8 percent) C$56 million
- Pre-tax IRR (8 percent) of 14.2 percent
- Mine life of seven years with a 4.3 year payback period
- Capital expenditure of C$263 million (including $47 million contingency and sustaining capital)
- Gross LOM revenue of C$450
The PEA report was prepared by JDS Energy and Mining Inc., Vancouver, B.C. and included an equipment list and costing for processing plant equipment. The PEA indicated a list of opportunities for improvement of project economics. Evaluation of these opportunities are in progress and confirm improvements.
Consent pricing copper at US $3.20 lb copper results in increase economic as:
- NPV (PreTax 8% discount) – C $141 Million
- IRR (PreTax 8% discount) – 22.6%
- Mine Life of 7 years with a 3.0 year pay-back period.
Highlights of the Mineral Resource Update:
The 2016 Updated Mineral Resource released with the 2016 PEA outlined a maiden resource for zones 12, 13 and 2000S combined with the previously defined mineral resource for the Carmacks Project as set out in NI 43-101 Mineral Resource (January 25,2016).
Drilling of these mineral zones commenced September 2017 to expand and confirm mineral resource for further engineering to increase mine plan. 2017 drilling covered 4,165 meters of infill and step-out drilling in zones 2000S and 13. Results from the drilling uncovered further oxide mineralization and assay values of 34.9 meters of 0.65 percent copper, 0.14 g/t gold and 2.47 g/t silver, and 50.2 meters of 0.68 percent copper, 0.13 g/t gold and 1.95 g/t silver. Results led to the release of a further updated resource estimate for the new zones, which was published in April 2018 and increased the size of the overall Carmack resource.
Open-Pit Zone Mineral Resource Estimate
Oxide and transition mineral resources:
- Measured and Indicated of 11.98 Mt grading 1.07% Cu, 0.86% acid-soluble Cu, 0.456 g/t Au and 4.578 g/t Ag
- Inferred Resources of 0.9 Mt grading 0.73% Cu, 0.53% acid-soluble Cu, 0.128 g/t Au and 1.809 g/t Ag.
Sulphide mineral resources:
- Measured and Indicated of 4.34 Mt grading 0.75% Cu, 0.221 g/t Au and 2.369 g/t Ag.
- Inferred resource of 4.0 Mt grading 0.71% Cu, 0.179 g/t Au and 1.900 g/t Ag.
2018 Updated Mineral Resource Estimate (zones 12, 13, and 2000S)
Oxide and transition mineral resources:
- Measured and Indicated of 4.3 Mt grading 0.0.47% Cu, 0.34% acid-soluble Cu, 0.12 g/t Au and 1.92 g/t Ag; an increase of 40 percent.
- Inferred of 0.39 Mt grading 0.34% Cu, 0.27% acid-soluble Cu, 0.12 g/t Au and 1.65 g/t Ag.
Sulphide mineral resources:
- Measured and Indicated of 4.4 Mt grading 0.62% Cu, 0.13 g/t Au and 2.3 g/t Ag.
- Inferred of 4.28 Mt grading 0.54% Cu, 0.12 g/t Au and 1.9 g/t Ag.
Dr. Harlan Meade, President and CEO, commented that “the increase of Measured and Indicated Oxide mineralization in the Updated Mineral Resource for the Carmacks Project confirms there is an opportunity to undertake mine development engineering work on the southern extension to evaluate the potential for extending oxide mineralization mine life and for a potential future shift to mining the sulphide mineralization”.
Dr. Harlan Meade, Ph.D. — President, CEO & Director
Dr. Meade is the former President and CEO of Selwyn Resources Ltd. He has a doctorate in geology and a master in business administration. Dr. Meade has more than 30 years’ experience in exploration and development in the mining industry. He has played a key role in the discovery and development of several mineral deposits in North and South America. He is member of the Association of Professional Engineers and Geologists of British Columbia and the Society of Economic Geologists.
Robert McKnight — Director
Mr. McKnight is a professional engineer and MBA with over 35 years of experience in the resources business with extensive knowledge of corporate and project finance, mergers and acquisitions, feasibility studies, and valuations. He is a geological engineer with broad experience in the mining sector, having held senior roles with Brascan Resources, Wright Engineers, Getty Resources, Total SA, Endeavour Financial, Runge Pincock, Amec FW, Yukon Zinc and Selwyn Resources. He is currently executive vice-president and chief financial officer of Nevada Copper Corp.
Rebecca Moriarty, CPA CA – CFO
Mrs. Moriarty is a chartered professional accountant with over 16 years of experience related to the mining industry. She previously spent 11 years at Pricewaterhusecoopers LLP working with public resource companies.
Doug Ramsey, M.Sc., R.P.Bio — Vice President, Sustainability and Environmental Affairs
Mr. Ramsey joined Copper North after 30 years in environmental consulting, with an emphasis on the permitting of mining and other resource development projects. Prior to joining Copper North, Mr. Ramsey managed the environmental permitting practice for Wardrop — A Tetra Tech Company, an international engineering consulting firm. Mr. Ramsey has an M.Sc. in Zoology from the University of Manitoba and is a Registered Professional Biologist in British Columbia. As Vice President, Sustainability and Environmental Affairs, Mr. Ramsey is responsible for overseeing the environmental permitting, compliance, and sustainability of Copper North projects.
Bill Koutsouras, C.A., C.F.A. — Director
Mr. Koutsouras is the principal of Kouts Capital, a consulting company which provides strategic advice to natural resource companies. Previously Mr. Koutsouras was the Executive Vice President and Chief Financial Officer of Endeavour Financial Corporation, a mining focused merchant banking business. He was primarily responsible for overseeing financial advisory mandates, investment related services and the financial operations and management of the Endeavour group of companies. Mr. Koutsouras is also a non-executive director of several natural resource companies. Mr. Koutsouras is a Chartered Accountant and Chartered Financial Analyst and is a member of the Canadian Institute of Chartered Accountants and the CFA Institute.
Lorne Anderson, C.A. – Director
Mr. Anderson is a Chartered Accountant. He has been an independent Financial Consultant to the minerals industry and has served on the Boards of several publicly listed mineral companies. Mr. Anderson was the Chief Financial Officer and Treasurer of Glamis Gold Ltd and a director of Tahoe Resources Inc. He has over 20 years of experience in the mining industry, during which time he has been involved with administration, both equity and bank financings, and investor relations programs.
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