Site visit: Gunnison taps Nuton tech as America’s newest copper producer

COCHISE COUNTY, ARIZ. — Gunnison Copper’s (TSX: GCU; US-OTC: GCUMF) namesake deposit and Johnson Camp Mine sit at two intersections, literal and metaphorical.

Nestled among rocky, rolling hills dotted with cacti and other desert vegetation, the two sites are on either side of Interstate-10. And its Sept. 3 production start lays the ground for its planned use of ground-breaking copper processing.

The milestone of pure copper cathode at JCM made Gunnison the United States’ newest red metal producer, and it will be the first to use the sulphide leaching technology of Rio Tinto’s (NYSE: RIO) venture partner Nuton later this year. Gunnison’s property is located about 105 km east of Tucson.

Watch a video of the site visit

 

“This is the world’s first commercial scale construction of [Nuton] technology,” CEO Stephen Twyerould told The Northern Miner on a site visit this month. “It has the potential to fundamentally change sulphide processing, in the U.S. and elsewhere. I’ve got mates in Australia who are constantly saying, ‘I can’t believe you guys are building the first one.'”

Newest copper producer

Located in the most prolific copper producing region of Arizona – itself churning out almost two-thirds of the country’s red metal – Gunnison is now the state’s newest producer. It joins such other copper producers in the state’s southeast as Freeport McMoRan’s (NYSE: FCX) Sierrita mine, Capstone Copper’s (TSX: CS; ASX: CSC) Pinto Valley mine and Grupo Mexico’s (BMV: GMEXICOB) Mission Complex.

The JCM open pit and heap leach mine has annual full capacity of 25 million lb. of copper over a 15 to 20-year life, according to a 2023 preliminary economic assessment (PEA) prepared for Gunnison’s predecessor Excelsior Mining. It hosts about 108 million measured and indicated tons grading 0.31% copper and 51 million inferred tons at 0.32% copper.

In a base case, JCM has a post-tax internal rate of return (IRR) of 30% with a payback period of about four years, and a net present value (NPV) of $180 million, at a 7.5% discount rate. Initial capital costs are pegged at $58.9 million.

Cutting-edge tech

But one of JCM’s defining features is how much Nuton’s tech changes the landscape for copper mining, explained Robert Winton, Gunnison’s senior vice-president of operations.

“Sulphide ore is [normally] crushed, concentrated in a mill, smelted, refined, then finished copper,” Winton said, gesturing at JCM’s enormous heap leach pad as haul trucks drove around in the distance.

“[In] the Nuton process it’s mined, crushed, heap leached, then solvent extraction and electrowinning and then it’s finished copper. You’re taking out the mill, tailings, the smelter and refinery. In North America, a high percentage of our copper concentrates has to go to Japan and Korea to get treated in a smelter.”

Under an agreement with Nuton, it has invested $100 million in technology deployment and construction at JCM, while Gunnison holds ownership and operational control. The two-stage partnership is to last for four or five years during which copper output would pay down Nuton’s investment.   

In the second stage, and after full-scale commercial production using Nuton tech is underway, the companies would form a joint venture, with Gunnison holding 51% and Nuton 49%.

The Gunnison crown

But as future-facing as JCM and its Nuton partnership might be, the larger jewel in Gunnison’s crown is its namesake deposit about 2 km south of JCM.

Though less advanced than JCM, Gunnison is more than eight times larger, hosting 831.6 million measured and indicated tonnes grading 0.31% copper for 5.1 billion lb. and 79.6 million inferred tons grading 0.2% copper for 325 million lb. of contained metal, according to the PEA from last December.

The project has a post-tax NPV of $1.3 billion and an IRR of 21% at initial capital costs of $1.3 billion. Total copper cathode output totals about 1.35 million tons (1.22 million tonnes) over an 18-year life.

“The larger Gunnison project…can put a dent into the deficit the U.S. is facing on copper,” Twyerould said.

Production in 2030

Despite the deposit’s potential, a production start is a ways off, Winton said. Gunnison plans to release a pre-feasibility study for the project and secure the permits by the end of next year. Doing a feasibility study depends on finding a strategic partner. Production could start in 2030.

“We’re an M&A target,” Twyerould said. “Gunnison is a big project for a small company. We’d benefit from a strategic partner who would help us bring it into production. Whether that results in a joint venture or an entire transaction where somebody takes over the whole company.”

And even though JCM is a relatively small project, the company likens its long-term potential to a training ground for the larger Gunnison, Winton said.

“Once construction costs have been paid off [at JCM] it will generate dollars,” he said. “It has allowed us to build a strong team here. It gives us incredible knowledge on Nuton and its process and how they do their business. It gives us an opportunity to bring in more talent.”

Shares in Gunnison have gained 24% so far this year and traded at C26¢ apiece on Tuesday morning in Toronto for a market capitalization of C$92.1 million. The stock has traded in a 12-month range of C10¢ to C44¢.