Arizona Sonoran Copper – Cactus Project Economics And Development Work, MainSpring Exploration And Upcoming PEA, And Potential Synergies With The Nuton Leaching Process

The KE Report

George Ogilvie, President and CEO of Arizona Sonoran Copper (TSX:ASCU – OTCQX:ASCUF), joins me to recap the economic studies and development work completed to date and the work plan to come in 2024 and early 2025 at the Cactus Project in Arizona.

The Company put out a Pre-Feasibility Study (PFS) at the Cactus Project in February, that demonstrated an initial Life of Mine of 21 years, recovering 1,153 k tons or 2.31 billion pounds of Copper LME Grade A cathode onsite via heap leach facility and SXEW. That gave the economics on the project a post-tax Net Present Value (“NPV”) of $509 million (CA$687 million) using an 8% discount rate and an internal rate of return (“IRR”) of 15.3% and using a $3.90/lb flat long-term copper price. There would be total revenues of $9.0 billion over 21 years, and post-tax unlevered Free Cash Flow of $2.4 billion, with All-In Sustaining Cost (“AISC”) of $2.34/lb. George mentioned that with sensitivities close to today’s copper prices, if we assumed $4.50/lb. copper prices it jumps up to an NPB of $970 million and an IRR of 22%.

However, it should be noted that all the drilling the company has done at the MainSpring Property, has not been included in this study yet, and there will be a Preliminary Economic Assessment coming out in Q3 of this year. That study will also review the optionality to improve the process with the investment by Nuton LLC (a wholly-owned subsidiary of Rio Tinto) and subsequent option to Joint Venture (“JV”) the Cactus Project to Nuton LLC using their proprietary leaching recovery methods. After that PEA, then all of the ongoing infill drilling at MainSpring and also deeper at Cactus West looking for more sulphide resources will all factor into a larger combined PFS for the whole Cactus Project, Parks Salyer, and Mainspring, both as a stand-alone project, and in concert with the Nuton leaching technology.

We also discussed some optionality around developing MainSpring as an open pit providing operational flexibility and gaining lower cost access to the Parks/Salyer deposit, so that bringing MainSpring into the mine plan potentially improves operational and financial synergies within the Cactus Project. This idea will be explored further in these upcoming economic studies, and as more definition and infill drilling is completed in the gap zone between the projects. George also provides some updates on permitting for the project, and the importance of it being on private land to help expedite the process.

If you have any follow up questions for George about Arizona Sonoran, then please email me at [e-mail] and I’ll get those forwarded along to the company.

• In full disclosure, Shad has a position in Arizona Sonoran Copper at the time of this recording.

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