Developer Arizona Sonoran Copper (TSX: ASCU; US-OTCQX: ASCUF) moves into a critical new year as it works to complete a resource at Parks Salyer and a prefeasibility study for the Cactus copper project in Arizona by year-end.
In outlining its updated work plan, the company said it would undertake drilling, metallurgy, detailed engineering, permitting and technical studies, as well as work to build the onsite operations and technical team, it said in a news release.
Arizona Sonoran says it will target oxide and enriched copper mineralization with 32,000 metres of planned infill drilling on Parks Salyer during the current quarter. It plans to complete an additional 27,000 metres of infill drilling at the Cactus East and Parks Salyer projects by the second half of the year. Both projects are located near Casa Grande, AZ, about 80 km south of Phoenix.
The work would underpin a definitive feasibility scheduled for release in 2024. ASCU will also begin a small exploration program by June along the 4,000-metre mine trend from the Cactus to Parks Salyer deposits, which comprise the Gap Zone and NE Extension deposits. Previous drilling at the NE Extension by ASARCO highlighted mineralization down to 305 metres depth at a grade of 3% copper over 11.3 metres.
Metallurgical, sulphide testing
Meanwhile, the company is advancing metallurgical studies for oxide and sulphide material. Testing programs for the PFS and feasibility include columns of material from the existing stockpile, Parks Salyer and Cactus deposits, separated into different rock types, copper grades and mineralogy. The program is slated for completion by September.
In addition, mining major Rio Tinto (ASX: RIO; LSE: RIO; NASDAQ: RIO) is testing the leachability of the primary sulphide material at Cactus and Parks Salyer with its Nuton technology.
The sulphide component of the resource contains 1.7 billion lb. of copper (172 million tonnes at 0.47% copper) and did not factor in the PEA. If the preliminary test results from Rio Tinto, expected by March, are positive, Arizona Sonoran would have the ability to process lower-grade sulphide material and monetize a large portion of the resource that the company currently considers “stranded.” The miner, based in the namesake state may do infill drilling on the primary sulphide material at Cactus, related to Nuton’s technological requirements.
Assuming the work plan is completed, ASCU expects to complete a PFS by December or early in 2024, which will include Parks Salyer for the first time in an economic assessment and a more comprehensive underground development program than in the PEA. The PFS will lead to a DFS at the end of 2024, followed by a construction decision and financing in 2025. If construction starts by mid-2025, production from the stockpile could begin in 2027.
Haywood Capital Markets mining analyst Pierre Vaillancourt is optimistic about the copper development in the U.S.
“ASCU has executed well as management has adjusted to the development of the Parks Salyer resource and the modification of the mine plan,” he wrote in a note to clients.
“We look for work in 2023 to bring the opportunity into focus as one of the most attractive U.S. copper development projects.”
The combined projects entail the fourth-largest independent copper deposit in the U.S., with a total copper resource of 4.9 billion lb. inferred and 1.6 billion lb. indicated.
The company currently holds a total leachable inferred resource inventory – comprising the Cactus open pit and the Parks Salyer underground – of 449.9 million tonnes at 0.544% copper for 4.89 billion lb. of copper. The total indicated resource, which only applies to Cactus, remains at 151.8 million tonnes at 0.531% copper for 1.61 billion lb. of the red metal.
On Wednesday, Arizona Sonoran’s Toronto-quoted stock was up nearly 7% at $2.05, giving it a market cap of $181.9 million.