NorthIsle Copper and Gold Inc. Announces Positive PEA Base Case Results: $550.4 million After-Tax NPV (8%) and 14.3% IRR

Northisle Copper and Gold Inc. (“Northisle” or the “Company”) (TSXV:NCX)  is pleased to announce the results of its Preliminary Economic Assessment (“PEA”), prepared by M3 Engineering & Technology Corp., for its 100% owned North Island Copper and Gold Project located in northern Vancouver Island British Columbia (“Project”). The results of the PEA demonstrate the potential …

Northisle Copper and Gold Inc. (“Northisle” or the “Company”) (TSXV:NCX) is pleased to announce the results of its Preliminary Economic Assessment (“PEA”), prepared by M3 Engineering & Technology Corp., for its 100% owned North Island Copper and Gold Project located in northern Vancouver Island British Columbia (“Project”). The results of the PEA demonstrate the potential technical and economic viability of the Project constructed as an open-pit mine, with a concentrator processing nominally 75,000 tonnes per day.

PEA HIGHLIGHTS:

  • After tax NPV 8% of CAD $550.4 million, 14.3% IRR, 22-year mine life
  • 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 CAD $1.34 billion plus sustaining capital of $139 million
  • Direct cash cost of production per pound of copper net of gold, molybdenum and pyrite concentrate is CAD $1.17

“We are very pleased with the results of our maiden PEA,” said Jack McClintock, President of NorthIsle. “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 the potential for rhenium credits in the molybdenum concentrate. There remains excellent potential to add tonnes to our resource base. 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.”

PEA BASE CASE ECONOMIC RESULTS

Parameter Unit Base Case
Capital Cost CAD$ $1,344 million
Sustaining Capital CAD$ $139 million
NSR CAD$/ore tonne $17.61
Average Op Cost/tonne CAD$ $8.66
After tax Net Revenue CAD$ $2,349 million
After tax NPV 8% CAD$ $550 million
After tax IRR and pay back 14.3% and 5.1 years
Metal Price Cu US$ per pound $3.10
Au US$ per ounce $1,300
Mo US$ per pound $9.00
Pyrite concentrate US$ per tonne $86
Exchange rate US$ / CAD$ 0.75

PEA SUMMARY PRODUCTION STATISTICS

Category Units LOM
Tonnes Milled Mt 600
Average grade Cu % 0.18
Au gpt 0.24
Mo % 0.008
Tonnes produced Py MT 14.1
Throughput tpy 75,000
Mine Life years 22
Net Cash Cost* CAD$ $1.17

*Net direct cash costs that represent the cash cost incurred at each processing stage from mining through to recoverable metal delivered to market less net by-product credits. Direct cash costs cover mining, ore freight and milling costs, mine site administration and general expenses, concentrate freight, smelting and smelter general and administrative costs, marketing costs (freight and selling).

INITIAL CAPITAL EXPENDITURES (CAD$ MILLIONS)

Mine $149.2
Pre-Production $125.6
Process $1,024.9
Owner’s Cost $44.5
Total $1,344.2

OPERATING COSTS
The mine operating costs were calculated to average CAD$ 2.02 per tonne moved.

Area Unit Cost (CAD$/t moved)
Drilling 0.13
Blasting 0.27
Loading 0.27
Hauling 0.67
Support 0.54
Mine General 0.14
Total Cost 2.02

The process operating costs were calculated to average CAD$ 4.88/tonne ore.

Area CAD$/tonne ore
Salaries & Wages 0.54
Power 1.55
Liners 0.34
Grinding Media 1.06
Reagents 0.85
Maintenance Parts & Repairs 0.44
Supplies & Services 0.10
Total Cost 4.88

MINING

Preliminary mine designs have been developed for Red Dog and Hushamu deposits based upon Indicated and Inferred Resources. Resource models were imported to Minesight® mine planning software where a Lerchs Grossman algorithm was applied to an NSR model to determine possible pit limits.

The mine plan was developed to mine Red Dog concurrently with Hushamu in the early years of the mine life until Red Dog Resources were depleted. The assumed processing rate is 75,000 t/d. The overall mining rate peaks at 64 million t/a in the initial years averaging 54 million t/a over the first 12 years of the total mine life of 22 years. The effective strip ratio after stockpile reclaim was 0.72:1.

The mine will be a conventional truck and shovel operation with electrified pit operations at Hushamu. Waste rock will be placed during construction and operation within the Tailings Management Facility (TMF). A low-grade stockpile will be located at the pit rim on the northwest side of Hushamu. An overburden stockpile will be located adjacent to the low-grade stockpile for use in reclamation of the TMF at the end of the mine life.

The total resources processed in the conceptual mine plan are shown in the following Tables.

Mineral Resources Included in the Mine Plan
Indicated Resources ROM t x 1000 Cu % Au g/t Mo %
Hushamu Starter Pit 80,097.0 0.24 0.27 0.007
Hushamu Phase 1 Expansion 97,217.0 0.20 0.18 0.007
Hushamu Phase 1.5 Expansion 119,509.0 0.18 0.28 0.011
Hushamu Phase 2 Expansion 109,134.0 0.17 0.25 0.008
Red Dog 50,549.0 0.22 0.32 0.005
Total 456,506.0 0.20 0.25 0.008
Inferred Resources ROM t x 1000 Cu % Au g/t Mo %
Hushamu Starter Pit 2,530.0 0.12 0.15 0.015
Hushamu Phase 1 Expansion 12,802.0 0.13 0.12 0.010
Hushamu Phase 1.5 Expansion 40,554.0 0.14 0.22 0.012
Hushamu Phase 2 Expansion 84,859.0 0.14 0.21 0.008
Red Dog 2,152.0 0.17 0.27 0.003
Total 142,897.0 0.14 0.20 0.009

INFRASTRUCTURE

The nearby town of Port Hardy is a main distribution centre for the north end of Vancouver Island. It has an airport with 3 daily flights to Vancouver, a hospital, schools and a college. All parts of the North Island Project are accessible from Port Hardy through a network of logging roads.

A marine load out structure and a 138 KVA BC Hydro substation exist at the reclaimed Island Copper Mine, approximately 27 km from the North Island mine site. One of BC’s largest wind farm complexes is situated adjacent to the northwest end of the property and the 138 KV power line connecting the wind farm to the main BC power grid passes immediately north of the North Island Project.

ECONOMIC ANALYSIS
Economic evaluations were generated incorporating forecasts for metal prices using the long term (Base Case), the SEC price and Spot Price. The spot price case is from September 6, 2017.

Parameter Unit Base Case SEC Spot Price
Copper US$ per lb $3.10 $2.50 3.12
Gold US$ per oz $1300 $1,213.12 1,333.10
Molybdenum US$ per lb $9.00 $7.03 7.14
Pyrite US$ per tonne $86 $86 $86
Exchange rate 0.75 0.75 0.75
Economic Result (After tax)
Net Revenue CAD$ M 2,349 1,339 2,342
NPV 8% CAD$ M 550 34 549
IRR % 14.3 8.4 14.3
Pay back Years 5.1 7.9 5.0

The Preliminary Economic Assessment (“PEA”) is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would allow them to be categorized as mineral reserves and there is no certainty that the preliminary economic assessment will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

OPPORTUNITIES TO ENHANCE VALUE

The Project opportunities include advanced metallurgical studies to improve copper, gold and molybdenum recoveries from current life of mine averages of 77.5% for copper, 38.4% for gold (in the copper concentrate) and 59.5% for molybdenum; optimize primary and rougher concentrate regrind sizes; determine the potential for rhenium credits in the molybdenum concentrate; evaluate the use of the Island Copper pit for tailings disposal in conjunction with a waste storage site to reduce overall CAPEX, OPEX, and societal risk; and to evaluate higher production rates of 85 to 90 kptd. 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.

TECHNICAL REPORT

A National Instrument 43-101 (NI 43-101) compliant technical report entitled “North Island Project PEA” prepared by the following Qualified Persons will be filed by the Company within 45 days of this release on www.sedar.com:

  • Laurie Tahija, of M3 Engineering – Recovery Methods
  • Daniel Roth, P.Eng of M3 Engineering – Project Infrastructure; Capital and Operating Costs; Economic Analysis
  • Brian Game, P.Geo – Principal of GeoMinEx Consultants – Geology, Exploration and Environmental
  • Thomas W. Shouldice, P.Eng of TS Technical Services Ltd. – Mineral Processing and Metallurgical Testing
  • Phil Burt, P.Geo – CEO of Phil Burt Consulting Services – Mineral Resource Estimates
  • John Nilsson, P. Eng – Mining Methods
  • Ben Wickland, P.Eng of Golder Associates Ltd. – Tailing Infrastructure

The Qualified Persons have reviewed and approved the scientific, technical, and economic information obtained in this news release.

COMPANY OVERVIEW

NorthIsle Copper and Gold Inc. is a Vancouver based junior resource company committed to the development of the North Island Project on Northern Vancouver Island. The North Island Project is a 33,149-hectare block of mineral titles 100% owned by NorthIsle stretching 50 kilometres northwest from the now closed Island Copper Mine of BHP Billiton, which is located 10 km south of Port Hardy. The North Island Project contains the Hushamu and Red Dog Deposits and five other partially explored copper-gold porphyry occurrences.

On behalf of NorthIsle Copper and Gold Inc.
John McClintock
John McClintock
President, CEO and Director
info@northisle.ca
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

This news release contains forward-looking statements. These forward-looking statements are based upon the reasonable beliefs of Northisle and its management as of the date of this news release; however, forward-looking statements involve risks and uncertainties and are based upon factors that may change and assumptions that may prove, with the passage of time, to be incorrect as a result of exploration and other risk factors associated with mineral exploration and development that are beyond the control of Northisle. Accordingly, undue reliance should not be placed upon such statements. If factors materially change or assumptions are materially incorrect, the actual results, performance or achievements of Northisle may be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Northisle does not undertake any obligation to update or revise any forward-looking statements to reflect new information, future events or otherwise, except as required by applicable law.

Click here to connect with NorthIsle Copper and Gold (TSXV:NCX) to receive an Investor Presentation.

Source: globenewswire.com

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text saying "top stories this week"

Catch up and get informed with this week's content highlights from Charlotte McLeod, our editorial director.

Top Stories This Week: Powell Gets Fed Nomination, Using Gold in a Market Correction youtu.be

We're back after a break last week with quite a bit to cover in the gold space.

After running up past the US$1,860 per ounce mark midway through November, the yellow metal has taken a tumble. At the time of this writing on Friday (November 26) afternoon, it was sitting just under US$1,790.

Gold's losses this week have been attributed to elements like a stronger US dollar and better Treasury yields, although Jerome Powell's US Federal Reserve chair renomination has pulled other factors into play — some market watchers believe he may move to taper and raise interest rates faster than anticipated.


If the Fed follows its previously laid out timeline for tapering, it will wrap up in mid-2022; the central bank has said it won't raise rates until after that. It has also emphasized that its roadmap may change if necessary.

Looking at the larger picture for gold, I heard recently from Nick Barisheff of BMG Group, who believes the stock market is due for a major correction.

"The market is due for a major correction. What will cause it and when it will happen is anybody's guess — it could be tomorrow, it could be six months from now" — Nick Barisheff, BMG Group

It's impossible to know when this correction will happen, but Nick emphasized the importance of acting before it's too late. He pointed out that investors are typically slow to get out of the market once a crash actually begins — they wait for a turnaround, and by the time it's clear there won't be one, they've experienced big losses.

In his opinion, the solution is to get out of the stock market early and transfer money into gold.

Here's how Nick explained it:

"Instead of taking your money off the table and going into cash … you go to gold (because cash is devaluing daily). Gold will at least hold its own and probably appreciate … so by sitting it out in gold you can wait until the market finishes correcting and then buy back in" — Nick Barisheff, BMG Group

With gold's future in mind, we asked our Twitter followers this week what price they think the metal will be at the end of 2021. By the time the poll closed, most respondents had voted for the US$1,800 to US$1,900 range.

We'll be asking another question on Twitter next week, so make sure to follow us @INN_Resource or follow me @Charlotte_McL to share your thoughts.

Finally, in the cannabis space, INN's Bryan Mc Govern spoke with Dan Ahrens of AdvisorShares to get his thoughts on 2021 trends and what's ahead in 2022.

Dan was candid, and said if he had to choose one word to describe the cannabis market in 2021, it would be "painful." Like many others, he's been disappointed in the industry's performance — while positivity initially ran high due to excitement about potential federal changes in the US, ultimately progress has been slow.

"Cannabis started with a big run-up in January and February ... and things dragged from there" — Dan Ahrens, AdvisorShares

Still, Dan has hope for 2022 and said it will be a "huge year" for cannabis. He believes US reforms will come sooner rather than later, and in his opinion those widely anticipated changes will bring a wave of M&A activity.

Specifically, he expects to see alcohol, tobacco and other consumer packaged goods companies making deals with cannabis players, not just cannabis entities doing transactions with each other.

"Those big alcohol companies, tobacco companies, other consumer packaged goods product companies — they're waiting. They're waiting on the US" — Dan Ahrens, AdvisorShares

Want more YouTube content? Check out our YouTube playlist At Home With INN, which features interviews with experts in the resource space. If there's someone you'd like to see us interview, please send an email to cmcleod@investingnews.com.

And don't forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

cannabis plant layered with German flag graphic
Dmytro Tyshchenko / Shutterstock

Catch up on some of the biggest news of the week for the cannabis investment world.

Three political parties have formed a coalition in Germany, leading to a new government, and it has promised cannabis reform in the European nation.

Meanwhile, a popular cannabis retailer confirmed consumers will now find its products available for delivery on the Uber Eats mobile application in Ontario.

Keep reading to find out more cannabis highlights from the past five days.


Coalition of parties promises forward-looking cannabis policy

Germany, a country with comprehensive and elaborate medicinal rules for cannabis, is in a time of transition as a new government is set to begin to take over after 16 years of Angela Merkel.

Olaf Scholz, the proposed next chancellor of Germany, leads a three party coalition that will become the country's governing body. As part of its promises, talk of adult-use cannabis regulation has now gained even more momentum. A report from MJBizDaily quotes a German policy document that shows the coalition's stance:

"We are introducing the controlled distribution of cannabis to adults for consumption purposes in licensed shops. This controls the quality, prevents the transfer of contaminated substances and guarantees the protection of minors."

However, despite the promise and excitement, it remains to be seen how these ideas will be applied since no formal regulations have been drafted or approved yet.

Canadian cannabis retailer partners with popular delivery app

Tokyo Smoke, a cannabis retail operator in Canada owned by Canopy Growth (NASDAQ:CGC,TSX:WEED), announced a collaboration agreement with Uber Canada (NYSE:UBER) whereby cannabis consumers will be able to use the Uber Eats app to order products before they visit stores.

While the app won't let consumers get cannabis delivered to them, this new method opens the doors to more dynamic ways of buying cannabis.

"As a market leader in innovation and a platform used by so many Canadians, we believe this is the ideal next offering that can be done safely and conveniently on the Uber Eats app," Mark Hillard, vice president of operations with Tokyo Smoke, said in a press release.

A report from the Canadian Press indicates Ontario is considering allowing dispensaries to have delivery and pickup options made available to consumers permanently. The province allowed some of these purchasing options at the outset of the COVID-19 pandemic, but then removed them.

Lola Kassim, general manager of Uber Eats Canada, said this new end-to-end experience will provide consumers with responsible access to legal cannabis products.

Cannabis company news

  • Organigram Holdings (NASDAQ:OGI,TSX:OGI) issued financial results for its Q4 2021 period. In its report, the company notes a net loss of C$26 million despite a 22 percent uptick in net revenue to C$24.9 million. Beena Goldenberg, the newly appointed CEO of the firm, is encouraged by the market share position earned by the company, which said it became the fourth biggest producer in Canada during the reporting period.
  • Halo Collective (NEO:HALO,OTCQB:HCANF) confirmed the decision for Akanda, its spinoff company focused on international cannabis opportunities, to begin trading on a US exchange. "The number of shares to be offered and the price range for the proposed offering have not yet been determined," the company told investors in a press release.
  • High Tide (NASDAQ:HITI,TSXV:HITI) announced the acquisition of 80 percent of NuLeaf Naturals, a CBD product wellness developer, for an estimated US$31.24 million. The deal includes a three year option clause for High Tide to complete a total acquisition. "As international markets open up and as export regulations evolve, NuLeaf's cGMP-certified facility positions us to take advantage of the global CBD business opportunity," Raj Grover, president and CEO of High Tide, said.
  • Humble & Fume (CSE:HMBL,OTC Pink:HUMBF) released the financial report for its first 2022 fiscal quarter to shareholders and the market. "As the legal cannabis market in North America continues to mature, Humble remains agile and focused on providing a leading solution for brands to scale quickly and retailers to focus on their customers," Joel Toguri, CEO of Humble, said.

Don't forget to follow us @INN_Cannabis for real-time updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

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