The world needs copper and with a major resource update, New World Resources has it
New World Resources is poised to extend the life and expand the size of its Antler copper mine in the United States, announcing a massive resource increase at a time when the need for the battery metal is becoming more stark than ever.
Twelve months of intense drilling at Antler since the announcement of a maiden resource last year has come up trumps for New World (ASX:NWC), increasing its tonnage by 48% and contained metal on a copper equivalent basis by 44%.
On top of that the Arizona-focused explorer has recorded an increase in grade from 3.9% to 4.1% (copper-equivalent), which should provide another boost to the already dazzling economics outlined in a scoping study earlier this year.
The Antler mine, previously a small producer of the red metal until the early 1970s, now contains a modern JORC resource of 11.4Mt at 2.1% copper, 5% zinc, 0.9% lead, 32.9g/t silver and 0.36g/t gold at a copper equivalent grade of 4.1%.
Even better, 79% of that mineral resource estimate has been classified in the high confidence indicated category.
That is more robust than ‘inferred’ tonnes, and is a high enough confidence to be incorporated into economic ore reserves if the numbers stack up.
An update to the 2022 scoping study will now be drawn up and released early next year to capture the massive upgrade in tonnage and metal content, with a larger pre-feasibility study due in the third quarter of 2023.
“The updated JORC Resource reaffirms our confidence in the development potential of the Antler Copper Project, delivering an impressive 48% increase in the resource base of what is one of the highest-grade copper deposits in the world,” New World’s managing director Mike Haynes says.
“A year ago, when we declared our maiden JORC Resource, we highlighted that was an interim, initial estimate.
“We were still drilling, with three rigs, to expand the resource base further, with the expectation that we could increase our annual production profile and/or extend the mine life.
“I’m very confident that this updated Resource will enable us to do both.”
“With a much larger Resource, the potential economics of developing the Antler Project could be even more attractive – at a time when demand for copper, and therefore the copper price, is increasing due to its fundamental role in the impending global energy transition as the world economy decarbonises.”
The need for copper and other battery metals including zinc and lead, also amply represented in Antler’s updated resource, has been highlighted recently.
Many experts say as much copper will need to be mined in the coming decades for renewables, transmission infrastructure and electric vehicles as we have dug up in human history.
Maximo Pacheco, chairman of the world’s largest copper mine Codelco, last week said the deficit in the copper market — how much more demand there will be than supply on current forecasts – will hit 8Mt by 2032.
That makes new, high-grade discoveries like Antler a significant development not just for NWC, but for the global mining and green energy industry.
“With modest CAPEX and a relatively short timeline to production, we are very well positioned to capitalise on these highly favourable conditions,” Haynes said.
“We expect to be able to assess the economic impact in early 2023, by rapidly updating the Scoping Study we prepared earlier this year. This will primarily involve assessing a larger and/or longer mine plan based on the updated JORC Resource.
“This will be followed, shortly thereafter, by the completion of a Pre-Feasibility Study – which is another important step as we de-risk the development of the Antler Project and expedite it back into production as quickly as practicable.”
It remains open at depth, with some of the best hits at Antler coming in its deepest holes (think 26.8m at a stellar 7% copper-equivalent), while NWC has recently turned its attention to undrilled anomalies with the potential to be rich in copper over 6km of strike to the north-east of Antler.
The aforementioned scoping study already outlined a very exciting proposition when it was released earlier this year.
It placed an NPV(7) of US$525m ($750m) and pre-tax IRR of 42% on the project, which will deliver US$2b ($2.8b) in revenue at a modest capex of US$201m, producing 271,240t of copper equivalent metal in concentrates over a 10-year mine life.
That will likely get bigger and boast a longer life in the updated scoping study due early next year.
The resource was based on prevailing spot prices at October 10 this year, when copper was fetching around US$500 less on each tonne than it is today.
If prices rise due to the shortage and demand expected from the energy transition, more of that material should become economic to include in resources and mine.
Metallurgical test work is continuing as well, with indicative recoveries to date used in copper equivalent grade estimations.
Recoveries for the two main commodities in the resource inventory, copper and zinc, have been strong to date at 87.2% and 88.9% respectively, with 95% of the previous mineral resource estimate included in the mining inventory in the first scoping study’s conceptual mine design.
NWC expects the high grade and continuous nature of the new MRE to mean a high proportion of the estimate will be amenable to mining.
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.