Western Copper and Gold (TSX:WRN,NYSEMKT:WRN) is focused on developing the Casino project, its wholly owned, billion-tonne copper-gold project. The project is one of the most economic greenfield projects in the world, and is favorably located in Canada’s Yukon Territory.
The value of being positioned in the Yukon increased recently following Prime Minister Justin Trudeau’s announcement of a $360-million infrastructure package in the territory, $130 million of which will be dedicated to developing roads that access Casino.
“Construction of this road will provide jobs and business opportunities to the communities and First Nations in the short term, and will provide much needed infrastructure to the Casino project that will provide significant benefit to these communities, First Nations and the Yukon in general for the long term,” said Western Copper and Gold President and CEO Paul West-Sells.
Read the transcript of our full conversation with West-Sells below.
Investing News Network: What is ahead for copper prices?
Western Copper and Gold President and CEO Paul West-Sells: It’s been a really exciting time in the copper space. We saw copper shoot up to $2.50 per pound at the end of last year, and this year it’s gone up to $3, $3.10, almost hitting $3.20 this weekend. At this rate, we might reach $3.20 before the end of this year.
There are some fundamental reasons for why copper is as strong as it is. These include reasonable demand from China, the US and Europe and, more importantly, the current level of supply. At present, we have not seen any mines built or planned in the last five years, and there’s a dearth of supply. Investors and speculators are aware of this and, as a result, the price of copper is rising in anticipation of the need for a larger supply which necessitates higher copper prices.
INN: How do higher copper prices affect Western Copper and Gold?
PW-S: Our Casino project is not directly affected by higher copper and gold prices. Our project works at $2 copper, so at $3, what we are seeing is a significant increase in profit. At $3 copper and $1,300-per-ounce gold, we have a project with an IRR of over 20 percent and a $2-billion NPR, which we consider to be spectacular returns.
INN: Prime Minister Trudeau recently made a significant infrastructure announcement for the Yukon. Please explain how this will benefit Western Copper and Gold.
PW-S: Trudeau’s announcement is one that is very exciting for us as well as for the Yukon Territory. The federal and territorial governments jointly announced a $360-million infrastructure package for the Yukon. The mandate of this package is to build a number of roads that will improve access, particularly for the mining sector. What is particularly exciting for Western and its shareholders is that approximately $130 million of that package will go directly to roads providing access to the Casino project.
INN: What is next in terms of the impact of this announcement?
PW-S: This funding request has been a long time in the making. Close to three years ago we began working on it with the Yukon territorial government, which, like the federal government, transitioned from being Conservative to Liberal. Working with them, part of the condition for receiving this funding was securing First Nations support for the initiative. We obtained first-level support from First Nations in the region and that helped to trigger this funding, and it was why the prime minister was present to make the announcement. Now that we have this support, the two levels of government will put together an agreement, which will be released fairly soon, and after that we will be able to start digging.
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