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NorthIsle Copper and Gold (TSXV:NCX) is developing the 100-percent owned North Island copper-gold project in northern Vancouver Island, an area with a long history of resource development and mining. The brownfields project includes two defined deposits, Hushamu and Red Dog, along with a number of other potential targets.
The Hushamu deposit is a porphyry copper-gold-molybdenum system with a current NI 43-101 resource estimate. Northisle’s Red Dog deposit was acquired due to historical drilling that reported higher grade than Hushamu and it also has a current NI 43-101 resource estimate which was completed in early 2017. Both resource estimates formed the basis of a recently released Preliminary Economic Assessment (PEA). The results of the PEA were positive and are indicative of the viability of the North Isle project.
“We are very pleased with the results of our maiden PEA,” said Jack McClintock, NorthIsle president and CEO. “This PEA shows the Project can be built and operated with excellent returns based on conservative metal prices. There are a number of areas of potential improvements that could improve the Project further including advanced metallurgical studies to improve metal recoveries, evaluating higher production rates, evaluating the use of the Island Copper pit for tailings disposal and evaluating ways to recover rhenium.”
NorthIsle Copper and Gold is led by a strong management team with decades of success in the in the mining industry, including Chairman Dale Corman who is also currently Executive Chairman of Western Copper and Gold Corporation, and President and CEO Jack McClintock who was formerly Exploration Manager for BHP Billiton.
- Control of an entire porphyry district with two known deposits and numerous additional porphyry targets.
- NI 43-101 resource estimate at Hushamu includes Indicated Resources of 304 million tonnes grading 0.21 percent copper, 0.29 g/t gold and 0.01 percent molybdenum; and Inferred Resources of 205.6 million tonnes grading 0.18 percent copper and 0.26 g/t gold.
- Red Dog NI 43-101 resource estimate includes an Indicated Resource of 23.6 million tonnes grading 0.32 percent copper and 0.46 g/t gold.
- The maiden PEA was released in September 2017 including an after-tax NPV 8 percent of C$550.4 million and after-tax IRR of 14.3 percent.
- Blue Sky potential on large land package.
- Strong share structure; Chairman Dale Corman holds 17 percent and senior management more than 23 percent.
Flagship Asset: North Island Project
The North Island Project covers 33,149 hectares of an entire porphyry copper belt located on northern Vancouver Island to the northwest of BHP Billiton’s reclaimed Island Copper Mine.
The project is accessible from the nearby town of Port Hardy via a network of logging roads and within 30 kilometres of tidewater, lowering transportation costs for potential operations. A deeps sea loading facility and a hydro power line exist at Island Copper. Further power infrastructure is potentially available from one of the province’s largest wind farms which lies directly adjacent to the northwest end of the project with the main power line to the grid passing immediately to the north.
The project hosts several porphyry copper and gold occurrences including the advanced stage Hushamu and Red Dog deposits as well as the early-stage Pemberton Hills and NW Expo mineralized zones.
The Hushamu deposit is a porphyry copper-gold-molybdenum system with a current NI 43-101 resource estimate of
- Indicated 304 million tonnes grading 0.21 percent copper, 0.29 g/t gold and 0.01 percent molybdenum at 0.45 percent copper equivalent; and
- Inferred 205.6 million tonnes grading 0.18 percent copper and 0.26 g/t gold at 0.39 percent copper equivalent.
The resource at Humashu remains open to the southeast, offering plenty of upside potential for the North Island Project.
NorthIsle conducted a drilling program over the summer of 2017 which consisted of 1,800 meters in six drill holes over the North Isle property. This program was completed successfully. The exploration objectives included testing for a southeastern extension of the Hushamu deposit as well as testing a 300-meter diameter area in the resource that was previously considered barren.
In testing the southeastern extension, the mineralization in one of the drill holes indicated that the deposit is open to both the north and the southeast. However, further drilling will be necessary to determine the extent and grade of the mineralization in the region.
Thanks to the recent drilling, the 300-meter diameter area previously thought to be barren in historical drilling results now has holes showing mineralization above the cut-off grade. Additional drilling will be required to understand how much in that delineated area could be added to the Hushamu resource.
Red Dog Deposit
The Red Dog deposit is 8 kilometers from the Hushamu and NI 43-101 resource estimate of 23.6 million tonnes grading 0.32 percent copper and 0.46 g/t gold (Indicated).
Northisle Copper wholly owns the Red Dog property subject to a 3 percent NSR; however, 2 percent of the NSR can be purchased for $1 million per 1 percent.
Shallow drill work in the central part of a 1.5 kilometer by 0.8 kilometer high-level of alteration at Red Dog has shown increasing copper and gold grades with depth, indicating the potential for a porphyry copper-gold system at depth.
As part of NorthIsle’s summer 2017 drilling program, the company tested the area south of the Red Dog deposit for deeply buried porphyry copper and gold mineralization. While NorthIsle was only able to drill 290 of the planned 600 meters due to ground conditions, the results indicated high-level porphyry copper alteration. NorthIsle plans to conduct additional drilling to a depth of 600 to see if a deep porphyry copper deposit exists.
Pemberton Hills and NW Expo
The Pemberton Hills target is a 3.5 kilometer by 1.5 kilometer area geologically similar to both Hushamu and Red Dog.
Drilling at the NW Expo Zone between 2006 and 2008 identified a 600 metre by 400 metre area of high-level porphyry-type mineralization with gold values in the 0.1 to 0.3 gpt range and molybdenum in the 0.01 to 0.016 range over distances of 100 metres or more. Results from partial testing of an IP anomaly to the northeast of this gold-molybdenum mineralization included 0.12 percent copper and 0.09 gpt gold over 176 metre and 0.16 percent copper and 0.14 gpt gold over 61 metre. Soil and rock sampling indicates the Red Dog deposit zone continues to this IP anomaly.
2017 Preliminary Economic Assessment
In September 2017, NorthIsle released the results of their PEA which was based on the current resource estimates for the Hushamu and Red Dog deposits and outlined the viability of the North Isle project.
The PEA highlights include:
- After-tax NPV 8 percent of C$550.4 million
- After-tax IRR of 14.3 percent
- Mine life of 22 years
- Life of Mine (LOM) metal production of 1.8 billion pounds of copper, 1.7 million ounces of gold and 55 million pounds of molybdenum
- Annual production of 82 million pounds of copper, 79 thousand ounces of gold and 3 million pounds of molybdenum
- Initial capital costs of C$1.34 billion and an additional sustaining capital of $139 million
- Direct cash cost of production per pound of copper net of gold, molybdenum and pyrite concentrate of C$1.17
NorthIsle executives see these results as extremely positive as they outline the achievability of the North Isle project and the company hopes to build upon these results in the near future. “There remains excellent potential to add tonnes to our resource base,” President and CEO Jack McClintock explained. “Drilling this summer demonstrated that our Hushamu deposit remains open for a significant expansion of its resource. In addition, there are several partially explored copper – gold exploration targets, any one of which could contribute significantly to the resource base of the Project.”
Dale Corman, B.Sc, P.Eng—Chairman
Dale Corman has more than 40 years’ experience as a senior corporate officer of publicly listed companies. He has extensive expertise in mineral exploration and development, financing, property evaluation and acquisition. He is currently Chairman and CEO of Western Copper Corp.
Jack McClintock, MBA, P.Eng—President, CEO and Director
Jack McClintock has more than 30 years’ experience in all facets of the mineral exploration business and was formerly Exploration Manager for BHP Billiton.
David Douglas, CA— Director and CFO
David Douglas is a Chartered Accountant with over 30 years of experience in the accounting, corporate finance and mining industries. He has participated in the sale or financing of over 30 private and public enterprises with a combined value of over $300 million.
Martino De Ciccio, CFA— Director
Mr. De Ciccio has served as VP Strategy & Investor Relations at Endeavour Mining since 2015 and has built a track-record of significant value creation over the past 11 years in the mining industry. Prior to Endeavour, he held the position of Strategy and Business Development Manager at La Mancha Resources.
Brandon Macdonald, B.Sc., MBA—Director
Brandon Macdonald is a principal with Jing Capital Corp., a firm specializing in marketing Western Companies in Asia. He previously worked in investment banking with Macquarie – London Office. Macdonald completed his MBA at Oxford University in 2007 where he graduated with Distinction. He also holds a BSc in Geology from UBC.
Larry Yau has 20 years of financial and business experience, gained primarily in the mining and resources sectors. Most recently, he was Chief Financial Officer for two junior mining companies where he was heavily involved in raising capital and the successful construction of mines in North America. Previously, Yau was Manager, Corporate Development, at Placer Dome Inc. until its acquisition by Barrick Gold Corp. and participated in several high-profile, international acquisitions. He is a Canadian Chartered Accountant.