Western Copper and Gold

Developing Canada’s Premier Copper-Gold Mine

This Western Copper and Gold profile is part of a paid investor education campaign.*

Overview

Western Copper and Gold Corporation (TSX:WRN, NYSE AMERICAN:WRN) is focused on developing the Casino project, Canada’s premier coppergold project. The deposit is located in Canada’s Yukon Territory, which ranks among the top 10 most attractive mining investment jurisdictions in the world.

The company has recently acquired the Canadian Creek project, which is adjacent to both the Casino project and Newmont Goldcorp’s (TSX:NGT,NYSE:NEM) Coffee project.  On September 24,2019 Western announced that they had hit a high grade gold intercept that, if proven, could allow for a starter operation and be a game-changer for the project.  Further drilling results are pending and expected to be included in an updated resource estimate for the Casino project.

Western Copper and Gold is led by a highly-knowledgeable management team with a proven record of success. For example, Western Copper and Gold’s parent company, Western Silver Corporation, was acquired by Glamis Gold for $1.6 billion in May 2006. Glamis Gold was subsequently bought by Goldcorp, now Newmont Goldcorp, in November 2006. Management is supported by a highly-qualified team of engineers dedicated to bringing Casino into production.

“Casino is a rare asset in that it is sizeable, economic, well-advanced and located in a great jurisdiction. Casino is the key asset in the emerging Yukon gold district.” said Western Copper and Gold President and CEO Paul West-Sells.

Western Copper and Gold’s Company Highlights

  • The Casino deposit hosts a significant resource of 18 million ounces of gold and 10 billion pounds of copper ((M+I+I).
  • The Casino project is economic at current spot prices.
  • The Casino project is located in an emerging gold district in which several majors (Newmont Goldcorp, Agnico Eagle, Kinross) have all made investments.
  • The federal government announced a funding package to fund two access roads into the district.

The Casino Project

Western Copper and Gold Casino Camp

The Casino project is a large porphyry-type copper-gold-molybdenum deposit located 560 kilometers from the year-round port of Skagway, Alaska and 380 kilometers from the capital city of Whitehorse in the Yukon Territory of Canada.

The Yukon is ranked as one of the most attractive mining investment jurisdictions in the world and has attracted the attention of numerous major mining companies over the last few years. Additional investment in the Yukon has been spurred by recent infrastructure funding from the regional and federal governments. In September 2017, the territorial and federal governments announced that they would provide approximately C$130 million in funding to upgrade and subsidize a large portion of the Casino access road, as part of the Yukon Gateway project.

“Since 2006, we have been working with the federal, territorial and First Nations governments and top environmental consultants to ensure that the planned road leading into the Casino site will have the lowest possible environmental impact and will ensure maximum benefit for local communities and First Nations,” said West-Sells.

Feasibility Study: Excellent Economics

Using base commodity prices of $1,400 per ounce gold and $3 per pound copper, the 2013 feasibility study shows the project has promising economics, such as a 20.1 percent IRR and an after-tax $1.83 billion NPV, due in large part to a best-in-class strip-ratio and initial high-grades.

One of the largest undeveloped copper-gold deposits in Canada, Casino contains a NI 43-101 compliant proven and probable reserve of 8.9 million ounces of gold and 4.5 billion pounds of copper contained in 1.12 billion tonnes of ore. The project holds plenty of upside potential as well, with an inferred resource of 9.0 million ounces of gold and 5.4 billion pounds of copper.

The project has an initial mine life of 22 years at 120,000 tonnes per day throughput, with the potential for an additional 25 years if the inferred resource is mined as well. The deposit is naturally hedged with copper accounting for approximately for 46 percent and gold contributing 34 percent of the projected revenue.

The feasibility study is based on a conventional open pit mine, concentrator complex and heap leach operation. The study shows an initial capital investment of $2.46 billion, which is in-line with other copper projects of this size. Combined mining and milling operating costs are estimated at $8.52 per tonne ore milled, with a net smelter return of $31.59 per tonne for the first four years and $22.59 per tonne for the life of the mine.

Adding onto the promising capital and operating costs, the low strip-ratios are some of the lowest in the industry. A strip-ratio of less than 1:1 is considered low in the industry. The Casino project has a predicted strip ratio of 0.49:1 for the first four years of operation and a strip ratio of 0.59:1 for the life of mine.

“This project is economic at spot prices. And that’s one of the main aspects of what separates Casino from other developing projects. We are not positioning this for a recovery in commodity prices – Casino is economic at this point in this cycle,” said West-Sells.

A review of the feasibility study in 2017 indicated that the economic metrics (e.g. IRR and NPV) at current prices and exchange rates was comparable to the base case metrics.

Engineering and Construction

Western Copper and Gold is actively advancing key aspects of the engineering work at Casino. The company has signed an agreement with M3 Engineering and Technology to build the mine and has an LOI with the engineering firm for the operations and management of the mine once in production.

Western Copper and Gold has also secured an MOU with Siemens concerning operations, equipment supply and funding for a power plant and other electrical equipment required for mining and processing facilities. In addition, initial agreements have been made with potential suppliers of liquefied natural gas.

Delivering Copper at the Right Time

As a result of underinvestment in new projects, declining grades at existing mines and a myriad of recent production issues, the copper market is headed toward a supply deficit with a forecasted 10 million tonne deficit by 2028.

western copper and gold

Upcoming Catalysts

Permitting

In November 2018, the company completed its best available tailings technology study for the project, which was conducted with First Nation, Yukon Environmental and Socio-economic Board (YESAB) and Yukon government participation.

The design enhancements include:

  • Significantly reduced water storage within the facility during operations;
  • A reduction in the height and slope of the embankment;
  • Relocation of potentially acid generating tailings to the rear of the facility, confined by waste rock;
  • Minimized long-term water storage in the facility at mine closure.

This 18-month-long process was conducted to review the tailings and mine waste disposal plan and is a significant component of the environmental assessment application. It reviewed 11 locations and five different technologies and assessed them from an environmental, technical, economic and social point of view.

The selected option impounds tailings and mine waste in a facility limited by an embankment constructed by cyclone tailings material. It is similar to that which was proposed in the original feasibility study, with proposed design enhancements including reduced water storage during operations, reduced height and slope of the embankment, relocation of potentially acid-generating tailings and minimized long-term water storage at mine closure.

In 2018, Western Copper and Gold also completed several First Nation traditional land use studies, continued its baseline data collection program and conducted numerous smaller environmental studies.

Ongoing Exploration

In June 2019, Western Copper and Gold commenced a 10,000-meter drill program at the Casino project, primarily focused on the Casino deposit. The company hopes to convert inferred mineralization into indicated mineralization, which would have a number of positive effects on the project, such as increased mine life, lower overall strip ratio and more accurate quantities of ore and waste.

Assays are still pending, however on September xxx Western announced that they had hit a high grade intercept that, if proven, could allow for a starter operation.  If proven, this would be a game-changer for the Casino project.   The company is anxiously waiting for the assays from the step-out drilling to the north and on to the Casino Creek claims.  The results from the program are to be included in an updated resource estimate for the Casino deposit.

The Canadian Creek Project

In July 2019, Western Copper and Gold acquired the Canadian Creek Property from Cariboo Rose Resources Ltd. (TSXV:CRB). The property shares a six-kilometer-long north-south boundary on the eastern side with the Casino project and a 12-kilometer-long east-west boundary on the northside with Newmont Goldcorp’s Coffee project. As part of the Yukon’s Gateway project, the Coffee-Casino connector road also lies on some of the property.

“The acquisition of the Canadian Creek project will considerably strengthen the Casino project. It will add significant exploration potential, with a number of exploration targets with the potential to increase mineralization of the Casino project – particularly the initial heap leach. By increasing the overall land package and increased border with the Coffee project, it will also further solidify the key position of the Casino project in the region,” said West-Sells.

Exploration Potential

Western Copper and Gold believes that the Casino deposit may extend onto the Canadian Creek project. To test this theory, the company intends to drill a 700-meter untested area between the most westerly Casino drill holes and the closest drill holes on the Canadian Creek property, as part of its drill program at Casino. The four drill holes on the property closest to the property border contained copper-gold-molybdenum mineralization, which are consistent with the outer edges of a porphyry copper–gold–molybdenum deposit.

The Canadian Creek project also offers additional exploration upsides for Western Copper and Gold. The Ana porphyry copper-gold-molybdenum zone lies 1.5 kilometers west of the primary target. The Ana zone measures 1.5 kilometers by one kilometer and contains no historical drill holes in the center of the target; however, mineralization at the target is similar to what has been found at the Casino deposit. The Canadian Creek project also hosts structurally-controlled gold-bearing zones in the northern half of the property similar in style to the Coffee project.

Western Copper and Gold’s Management Team

Dale Corman, B.Sc, P.Eng.— Executive Chairman
Mr. Corman has 40 years of experience as a senior corporate officer of publicly-listed companies as well as extensive expertise in mineral exploration and development, financing, property evaluation and acquisition. He was formerly Chairman and CEO of Western Silver Corporation.

Paul West-Sells, Ph.D. — President and CEO
Dr. West-Sells has over 20 years’ experience in the mining industry. After obtaining his Ph.D. from the University of British Columbia in Metallurgical Engineering, he worked with BHP, Placer Dome, and Barrick in increasingly senior roles in Research and Development and Project Development. Since 2006, Dr. West-Sells has worked for Western Copper and Gold, holding a number of technical and executive positions. Currently, as the President and CEO of Western Copper and Gold, Dr. West-Sells oversees the day to day operations of the company. Dr. West-Sells currently sits on the Yukon Minerals Advisory Board and the Centre for Northern Innovation in Mining Governing Council.

Varun Prasad — Interim CFO

Mr. Prasad has been with Western Copper and Gold since 2011. He worked closely with the CFO on financial and regulatory manners, assisted in the preparation of financial statements, and was responsible for accounts payable.  Mr. Prasad holds a B.A Technology (Accounting) from British Columbia Institute of Technology and is on track to earn his CPA designation in 2015. He is an avid sports fan and fitness buff.

Cameron Brown, P.Eng. — VP Engineering
Mr. Brown has 40 years of experience in mineral processing. He has been responsible for plant maintenance, project management and engineering of major base and precious metal projects. He was formerly Project Manager for Bechtel Engineering and Western Silver Corporation.

Robert Gayton, B.Comm., Ph.D., FCA – Director

After earning his chartered accountant designation at Peat Marwick (now KPMG) in 1965, Dr. Gayton joined the Faculty of Business Administration at the University of British Columbia, beginning 10 years in the academic world. Dr. Gayton rejoined Peat Marwick Mitchell in 1974 and became a partner in 1976 where he provided audit and consulting services to private and public company clients for 11 years. Dr. Gayton has directed the accounting and financial matters of public companies in the resource and non-resource fields since 1987. Dr. Gayton is also a Director of Amerigo Resources Ltd. (TSX:ARG) and B2 Gold Corp. (TSX:BTO). Dr. Gayton holds a Bachelor of Commerce degree from the University of British Columbia and a PhD in business from the University of California, Berkeley.

Klaus Zeitler, Ph.D. – Director

Dr. Zeitler was the founder and CEO of Inmet from 1987 to 1996. Dr. Zeitler was Senior Vice President of Teck Cominco Limited from 1997 until 2002, and previously was on the Board of Directors of Teck Corp., Tahoe Resources and Cominco Limited. Dr. Zeitler is the Executive Chairman, and director of Amerigo Resources, and he is the Chairman and director of Los Andes Copper Ltd. (TSXV:LA).

Tara Christie, B.A.Sc., M.A.Sc., P.Eng. – Director

Ms. Christie has over 20 years of experience in the exploration and mining business. Currently the President and CEO of Banyan Gold Corp, Ms. Christie serves on the boards of Constantine Metal Resources Ltd. and Klondike Gold Corp. She was formerly the President of privately owned Gimlex Gold Mines Ltd., one the Yukon’s largest placer mining operations. Ms. Christie has been a board member of PDAC, AMEBC and other industry associations and was a founding board member of the Yukon Environmental and Socio-Economic Assessment Board. She is active in non-profits and charities, including being President of a registered charity “Every Student, Every Day” that works to improve attendance in Yukon schools.

Archie Lang – Director

Archie Lang is a life-long northerner with an expertise in economic development. Mr. Lang is a former two term elected member of the Yukon Legislative Assembly who was appointed as Minister of Energy Mines and Resources (2002 to 2008), Minister of Highway and Public Works (2008 to 2011) and Minister of Community Services (2008 to 2011). He is experienced in developing and managing projects in consultation and partnership with all levels of government, including First Nations.

Kenneth Williamson – Director

Mr. Williamson is a professional director with over 40 years of experience in natural resources and investment banking, where his focus has been on capital markets and mergers and acquisitions. Mr. Williamson worked in the oil and gas sector before transitioning into investment banking at Midland Walwyn/Merrill Lynch Canada Inc. where he was Vice-Chairman of Investment Banking until 1998.  Mr. Williamson has held various positions on Boards throughout his career, including Eicon Technology Corporation, Glamis Gold Ltd., BioteQ Environmental Technologies Inc., Uranium One Inc., BlackRock Ventures Inc., Quadra FNX Mining Ltd., Tahoe Resources Inc. and Goldcorp Inc. Mr. Williamson is a member of the National Association of Corporate Directors (NACD), Institute of Corporate Directors (ICD) and the Professional Engineers of Ontario (PEO).

Mr. Williamson has a Bachelor of Applied Sciences degree from University of Toronto and an MBA from University of Western Ontario.


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