Northisle PEA doubles value of BC copper-gold project

Northisle Copper and Gold (TSXV: NCX) has issued a new preliminary economic assessment (PEA) for its North Island project that almost doubles the net present value, raises the internal rate of return by half and adds seven years to the mine life over a previous PEA released in 2021. Shares gained 7%.

The new PEA estimates an after-tax NPV of C$2 billion ($1.5 billion) at a 7% discount rate, an after-tax IRR of 29% and a 1.9-year payback period in the base-case scenario, the company said Wednesday. These figures would improve when applying spot metals prices, with NPV of C$3.8 billion ($2.6 billion), IRR of 45% and a 1.4-year payback.

The assessment is based on a proposed two-phase development of the Northwest Expo and Red Dog deposits, followed by the Hushamu deposit concurrent with a plant expansion. Over a projected 29-year mine life, the three deposits would provide 753 million tonnes of mineable material for processing, resulting in annual copper-equivalent production of 157 million pounds.

“The 2025 PEA confirms our view that the North Island project has the potential to be among the best copper and gold projects in Canada,” Northisle’s CEO Sam Lee said in a release. He added that the project “sharply distinguishes itself from other more capital-intensive copper projects” by unlocking copper value through gold.

Northisle shares traded for 61¢ apiece on Wednesday afternoon, giving the company a market capitalization of $156.9 million. Its shares traded in a 52-week range of 31¢ to 65¢.

Capex half of NPV

In the first phase, the plant will process material at a throughput rate of 40,000 tonnes per day to produce gold doré and gold-rich copper concentrate for five years. This would require initial capital expenditure of about C$1.1 billion ($849 million), which is nearly half of the base-case NPV.

The new PEA follows a resource update in October that showed 906 million indicated tonnes grading 0.16% copper, 0.24 gram gold per tonne and 75 parts per million (ppm) molybdenum, for 6.3 billion lb. of copper-equivalent, plus an additional 214 million inferred tonnes grading 0.12% copper, 0.22 gram gold and 52 ppm molybdenum for 1.3 billion lb. copper-equivalent.

The second phase contemplates twinning the mill for double the capacity at 80,000 tonnes per day in the sixth year to produce copper concentrate (containing significant payable gold), additional gold doré and a molybdenum concentrate.

The company’s previous PEA only included the Red Dog and Hushamu deposits, and had a shorter mine life of 22 years as well as half the NPV (C$1.1 billion). At 19%, the IRR was lower while the payback at 3.9 years was higher.

“I have always believed that the North Island project is among the most promising copper and gold projects in B.C., and now, I believe it’s among the most promising in the world,” chairman and cornerstone shareholder Dale Corman said.

Both Corman and Lee noted that the project, located next to BHP’s (NYSE, LSE, ASX: BHP) now-closed Island copper mine, has the opportunity to expand with further exploration of the 35-km district at North Island.

“We have just scratched the surface across our 35-km porphyry district. Through our fully funded 2025 exploration program focused on the Northwest Corridor, we will test for the causative intrusion at Northwest Expo, seek to expand the footprint of West Goodspeed both along strike and via fault offsets, and in-fill West Goodspeed to enhance continuity,” Lee stated.