Arizona Sonoran accelerates exploration in “pivotal year”

Arizona Sonoran Copper Company (ASCU: TSX) has drilled high-grade copper at its Parks/Salyer project, located just 2 km southwest of its flagship Cactus project in Arizona. 

Drillhole ECP-045 started hitting mineralization at 343.2 metres. Within the intercept of oxide, enriched and primary mineralization, the hole intersected 181.4 metres grading 1.29% copper starting from 402.3 metres of enriched copper. The company said that this was  the “best hole” drilled so far at either Parks/Salyer or Cactus.  

“The Parks/Salyer project could offer both critical mass and scale to our already robust 18-year operation” at Cactus, George Ogilvie, the company’s CEO, wrote in an email to The Northern Miner.  

“The goal is to produce a maiden resource on Parks/Slayer before the end of the year and incorporate that into our bankable feasibility study on the main Cactus project,” Ogilvie told analysts and investors on February 15 during an online discussion about the company’s latest drill results.  

Arizona Sonoran is also securing more ground between Parks/Salyer and Cactus. On February 10 it signed an agreement with Bronco Creek Exploration, a subsidiary of EMX Royalty (TSX-V: EMX), to acquire 64 hectares. The company believes a part of the Parks/Salyer deposit may extend on that land. 

With the “positive” exploration drill results and new land acquisition, the company says it is confident that it can improve upon a preliminary economic assessment published last year on the Cactus project, which estimated the brownfields project could produce 56 million lb. of copper annually over 18 years.  

“Our goal is to show an operation that increases production levels from its 56 million lb. in the PEA, over 20+ years from the underground and open pit layback at Cactus,” Ogilvie said in an email. “We have completed our PFS drilling, with assays pending … we believe our team will present a compelling business case on the Cactus project in July.” 

Ogilvie expects construction could start as early as 2023 with production beginning in 2024 and believes that the project, including both Cactus and Parks/Salyer can reach a production profile of between 80 to 100 million pounds of copper cathode a year, which he says would increase the company’s enterprise value from about US$130 million to nearly US$800 million.  

The company has set aside US$20 million for conducting later stage studies, exploration drilling and acquiring permits, and says 2022 will be a “pivotal” year. 

While most of the infill drilling at Cactus to support a prefeasibility study has been completed, the company is now planning to undertake measured drill spacing at the Cactus West and Cactus East deposits. The results will be included in the bankable feasibility study, which the company expects to complete at the end of the year.   

As far as the permits are concerned, Arizona Sonoran expects to complete the Aquifer Protection permit, which is being amended to include the Cactus West and East deposits, in the first half of this year. The company aims to receive additional permits including the Industrial Permit and Mined Land Reclamation permit, prior to making a construction decision.  

The company also hopes to develop “the best path” towards a net-zero carbon emissions operation at the project this year, after developing its ESG framework in 2021.  

Cactus has an indicated resource of 138 million tonnes grading 0.531% total copper in contained metal of 1.61 billion lb. copper. Inferred resources add 208 million tonnes grading 0.384% in contained metal of 1.76 billion lb. copper. 

At presstime, Arizona Sonoran was trading at $2.20 per share, within a 52-week trading range of $1.75 and $2.50.  The company has 69.76 million common shares outstanding for a market cap of $153.48 million.