US Copper hikes California project value to US$1B

US Copper (TSXV: USCU; US-OTC: USCUF) has highlighted the economic potential of its Moonlight-Superior project in California with a new independent technical report calculating its after-tax net present value at US$1 billion at a 7% discount rate with an internal rate of return of 23%.

The preliminary economic assessment (PEA) updates the previous one from 2018 that focused only on the Moonlight deposit. The new report, prepared by Global Resource Engineering (GRE), is based on a current resource of 402 million indicated tonnes grading 0.31% copper for over 2.5 million lb. of the metal with the inclusion of the Superior deposit.

The study envisions a mine life of 14 years, producing 903,000 tonnes of copper, plus 12 million oz. of silver and 63,000 oz. of gold. A majority of the production will come from mining the sulphide mineralization at Moonlight-Superior. 

US Copper intends to use the study to attract a joint venture partner, CEO Stephen Dunn said on Monday. The project is one of only a “few large-scale undeveloped copper assets in the U.S. that is wholly owned by a junior exploration company,” Dunn said in a release. 

Open pits

The PEA confirms “substantial economic opportunity” at current copper prices that can be realized through the development of a series of open-pit mines on the property, the CEO said. The study followed several years of planning, drilling, metallurgical testing and engineering prep.

GRE used a copper price of US$4.15 per lb, which is the weighted average of the three-year trailing average copper price and the one-year futures price. It also used the same method for gold and silver price assumptions: US$2,320 per oz. and US$27.40 per ounce.

Located in Plumas county, northeast California, US Copper’s main project is host to the Moonlight, Superior and Engels deposits that cover almost the entirety of the Light’s Creek copper district. Its mining history dates back to the late 19th century.

Historic mines

Engels and Superior are historic mines that produced about 161 million lb. of copper, 23,000 oz. of gold and 1.9 million oz. of silver between 1915 and 1930. Placer-Amex took over the project in the 1960s and later made the discovery at Moonlight. US Copper has owned the project since 2013 and has advanced the project with three different drill programs.

 “The project offers considerable leverage to increasing copper prices and the potential available from resource expansion drilling,” Dunn said. For this, GRE has recommended a US$5-million stage one exploration drill program, followed by a US$25-million stage two program, depending on the results.

US Copper’s shares rose 1.5¢ higher to 5.5¢ apiece for a 38% intraday gain on Monday before easing to close at 5¢ for a market capitalization of $6.1 million.