Yukon-focused explorer Granite Creek Copper’s (TSXV: GCX; US-OTC: GCXXF) Toronto-quoted equity closed in positive territory Thursday after it released strong initial economics for the Carmacks copper-gold-silver project.
Located in the Minto Copper District within the traditional territories of Little Salmon/Carmacks First Nation and Selkirk First Nation, Granite’s preliminary economic assessment shows it can turn a good profit with solid leverage to rising copper prices. The PEA also demonstrates plenty of resource upside providing mine life expansion potential.
Using base base-case metal price assumptions of US$3.75 per lb. copper, US$1,800 per oz. gold and US$22 per oz. silver, the PEA calculates a post-tax NPV, at a 5% discount, of $230 million, with an IRR of 29%. Should metal prices rise to US$4.25 per lb. copper, US$2,000 per oz. gold and US$25 per oz. silver, the NPV jumps to $330 million, with an attractive IRR of 38%.
The head grade is expected to average 1.1% copper-equivalent, comprising 0.9% copper, 0.3 grams gold and 3.5 grams silver per tonne. The operation is expected to produce copper-equivalent metal at an all-in sustaining cost of US$2.57 per lb.
The mine plan is based on 21.27 million resource tonnes grading 1.1% copper-equivalent for 33.9 million lb. of metal in concentrate per annum.
The project is estimated to cost $220 million to build, requiring a further $130 million over the mine life as sustaining capital. The model provides for a two-year payback.
As it stands, Carmacks would operate for nine years at 7,000 tonnes per day.
Granite is positioning the project as a potential low-carbon source of copper. The project will be powered by the Yukon’s electrical grid, which primarily uses renewable electricity.
The open pit sulphide and oxide project is expected to benefit from resource expansion and secondary processing of oxide material to improve oxide recoveries further.
“The inclusion of sulphide alongside oxide ore, either as a blend or a straight sulphide feed, has resulted in significant upside on the project, with further opportunities recognized in both processing and exploration,” notes CEO Timothy Johnson in the release.
The exploration team is tracing priority targets near the proposed open pits “with clear exploration potential to extend mine life with four target areas within 1 km of the current resource,” according to Granite’s press release.
Strong geophysical signatures are giving it high confidence the upcoming drill programme will intersect more economical mineralization.
Shares closed 6.25% higher Thursday at 8.5¢ apiece, having tested 5¢ and 17.5¢ in the past 12 months. Granite has a market cap of $11.9 million.