New World Resources could be ASX’s next big copper producer after top-shelf Antler PFS

PFS for New World’s Antler copper mine points to technically and financially robust copper project
6Mt will be mined over 12.2 years for US$3.16Bn (A$4.61Bn) gross revenue
Targeting final investment decision in 2025 with concentrate out the door in 2027

Special Report: New World Resources has completed a positive pre-feasibility study for the Antler project in Arizona, USA, which could see the company become the ASX’s next big copper producer.

The PFS has demonstrated the development of an underground mining operation including the construction of a new processing plant and associated infrastructure is technically and financially robust.

The project has mining inventory for a 1.2Mtpa underground operation with a 12.2 year life, delivering life of mine production of 13.6Mt at average head grade of 1.6% copper, 3.7% zinc, 0.6% lead, 24.5g/t silver and 0.26g/t gold (13.6Mt at 3% copper-equivalent).

That will translate to 186,700t of copper, 387,600t of zinc, 41,100t of lead, 6Moz of silver and 67,500oz of gold, payable in three separate concentrates.

This equates to 341,000t on a copper-equivalent basis (or 30,100t copper-equivalent per annum).

Overall, the project has low technical risk, with ready access to grid power, water and infrastructure and direct market access.

On track to become ASX’s next copper producer

The base case economics are robust, with long-term metal price forecasts used to model the economic potential of the project.

On this basis, net smelter return revenues are projected to average US$202.43 per tonne of ore milled over the 12.2-year life of mine.

With 13.6Mt delivered to the mill for processing, gross revenue over the LOM would be US$3.16 billion (A$4.61 billion).

“The completion of the pre-feasibility study into the development of the Antler copper project in Arizona puts the company firmly on track to become the next significant copper producer on the ASX – and a very low cost producer of copper at that,” New World Resources (ASX:NWC) managing director Mike Haynes said.

“The positive PFS demonstrates a technically and financially robust project capable of delivering more than 30,000 tonnes per annum of payable copper equivalent metal over a 12-year life from an underground operation feeding a 1.2Mtpa on-site processing plant.

“The project generates impressive financial returns, headlined by US$3.2 billion in revenue and post-tax free cashflow of almost US$1 billion over the life-of-mine, from a relatively modest pre-production capital investment of US$298 million.

“With C1 cash costs of US$0.12/lb of copper, New World is on track to become one of the lowest cost producers of copper in the world.”

Haynes says based on conservative commodity price assumptions, this drives robust margins and strong financial returns, with the pre-tax NPV7 of the project being US$636 million, with a pre-tax IRR of 34.3% and a 3.1-year capital payback period.

Pic: Annual production by resource category. Source: NWC

What about spot pricing?

At spot prices, the project economics are substantially enhanced, with NPV7 increasing by 35% and LOM free cash flow post-tax increasing by 28% to US$1.25bn (A$1.83bn).

“Using spot prices, the pre-tax NPV increases to US$857 million and the IRR rises to 42.2%”, Haynes said.

“Based on the advice of independent consultants and debt advisers, these strong financial outcomes are expected to underpin a project that will be extremely well placed to secure project finance on attractive terms, particularly given the strong outlook for copper over the coming decade and the paucity of new development projects in the global copper supply pipeline.

“Our advisers indicate that the project should be able to support ~65% debt funding, which reflects the quality and grade of the asset, as well as its location in a Tier-1 jurisdiction.”

Production targeted for 2027

The company has now commenced a definitive feasibility study to continue to de-risk the technical and financial aspects of development of the Project.

“The robust outcomes of the PFS have allowed the board to immediately approve the commencement of a definitive feasibility study on the Antler project, which is scheduled for completion in late 2025,” Haynes said.

“This will dovetail with the mine permitting process, with key approvals expected to be received from mid-2025 onwards, putting the company on an overall trajectory towards completing the DFS and advancing towards a final investment decision by late 2025, paving the way for construction of the Antler project to begin in 2026.”

First concentrate would leave the project in mid-2027, a time when copper deficits are expected to be emerging.

The company will use the PFS to seek indicative terms for debt finance.

NWC is confident the favourable attributes of 100% project ownership, no offtake rights and significant precious metal cash flow provide considerable financing opportunities.

Pic: Simplified process flow sheet. Source: NWC.

Exploration ongoing

There is considerable exploration upside at the project, with the deposit open at depth and along strike.

The company currently has three rigs drilling as part of an exploration program to test 17+ very high-priority targets.

Discovery could potentially extend the life of the mining operation at Antler and/or result in a larger production profile.

“We will continue our aggressive 3-rig exploration and resource development program both at Antler and across our wider portfolio of high-quality exploration assets in the district,” Haynes said.

“A key characteristic of VMS deposits is that they generally occur in clusters.

“We have a high level of confidence in our ability to make more discoveries and build our long-term inventory in the region, leveraging off the mining and processing infrastructure that we intend to build at Antler.”

This article was developed in collaboration with New World Resources, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.