Arizona Sonoran bumps copper at Cactus by half

Arizona Sonoran Copper (TSX: ASCU; US-OTC: ASCUF) has increased its Cactus project’s contained metal by 51% ahead of a prefeasibility study (PFS) due this year.

Cactus now hosts 1.04 billion measured and indicated tonnes grading 0.48% total copper for 11 billion lb. contained metal, the company said Tuesday. It also has 211 million inferred tonnes grading 0.37% copper for 1.7 billion pounds.

That compares with a July 2024 resource showing 574.1 million measured and indicated tonnes at 0.6% copper for 7.3 billion lb. plus 430 million inferred tonnes at 0.4% total copper for 3.8 billion pounds. The new grade fell 15% because the update included lower grade near-surface material from the Parks/Salyer South deposit. The inferred tonnage dropped because 56% of it was converted to measured and indicated status, the company said.

“While the overall measured and integrated grade at Parks/Salyer has decreased, the addition of shallow indicated mineral resource estimates has continued to demonstrate the highly compelling nature of an open pit scenario,” Arizona Sonoran President and CEO George Ogilvie said in a release.

“The path forward now is to reflect these updated mineral resource estimates into the pending 2025 PFS, anticipated in the fourth quarter of 2025, and effectively advance three key workstreams – a definitive feasibility study, permit amendments and project financing. We believe this work will support a final investment decision as early as fourth quarter 2026.”

Brownfield

The past-producing open-pit mine site located 74 km south of Phoenix would require initial capital spending of $668 million (C$918 million) over two years, according to a preliminary economic assessment (PEA) issued last year. Notably, three-quarters of the new resource total is leachable copper amenable to low-cost processing, the company said. The expanded resource base helps improve economics at Cactus to become a top 10 domestic copper producer by decade’s end, according to a rough ranking with peers.

“This mineral resource update is in line with what we had expected ahead of the PFS, and marks a de-risking event for the mineral inventory,” Canaccord Genuity mining analyst Dalton Baretto said in a note on Tuesday.

“A key change to the expected mine plan in the PFS (relative to the 2024 PEA) will be deferring some of this lower grade material by moving the pit centroid in order to access the higher-grade but deeper Parks-Salyer ore earlier in the mine plan. This will come with a higher pre-strip [ratio], but management indicates that the net economics are expected to be better.”

The PEA outlined a 31-year, heap-leach mine producing an average of 105,000 tonnes of copper cathode annually in its first 20 years. At a copper price of $3.90 per lb., the PEA projected an after-tax net present value at an 8% discount rate of $2.03 billion and an internal rate of return of 24%.

Those metrics give Cactus a relatively low capital intensity – “one of the lowest capital intensity copper development projects globally,” according to Haywood Securities analyst Pierre Vaillancourt.

Permits

The company already holds several major permits from a previous mine plan, and is working to amend them to cover the newly integrated Parks/Salyer deposit which will form a second open pit. Arizona Sonoran plans to secure debt financing next year, the CEO said this month.

“We plan to open the data room in the fourth quarter, work through lenders over the next nine to 12 months and aim to announce project debt in the second half of 2026,” Ogilvie told The Northern Miner. “Once debt is in place, we’ll look at the equity component.”

That timeline would keep Cactus on track to begin producing copper cathode by 2029, roughly two years after securing all permits and completing the definitive feasibility study.

In June, the company closed a C$51.8-million bought-deal financing at C$2 per share, which it says will fully fund Cactus through the potential final investment decision.

Shares in Arizona Sonoran slid 0.4% to C$2.53 apiece in Toronto, reflecting wider markets on Tuesday. The stock has a market value of C$452.6 million.