Kutcho fast tracks copper-zinc project in BC

Since closing the acquisition of its namesake high-grade copper-zinc project in northern British Columbia in December 2017, Kutcho Copper (TSXV: KC; US-OTC: KCCFF) has completed a field season of data collection and drilling, and published a resource update.

The company says it is on track to complete a feasibility study on Kutcho before the end of September, and, if everything goes according to plan, president and CEO Vince Sorace says the project should be fully permitted and shovel-ready in the second quarter of 2022, with production beginning in mid-2023.

That timeline should serve its shareholders well, the mining executive says, with the looming supply deficit many analysts and industry watchers predict for copper in the mid-2020s.

“Our strategy has always been the shortest path to feasibility and permitting,” Sorace says. “The project will get larger — there’s more resource drilling we can do — but, for now, all the data we’ve got is going to move towards completing the feasibility study.

“The feasibility study will update our reserves, but we believe we have what is a good economic project, and basically we’re going to get the biggest re-rate for the project once we get the feasibility study completed and move towards production,” he continues, adding that the company is just weeks away from filing a project description that will kick off the environmental assessment process.

Kutcho has measured and indicated resources of 17.3 million tonnes grading 1.85% copper, 2.72% zinc, 0.49 gram gold per tonne and 33.9 grams silver per tonne for a 2.61% copper-equivalent grade. Inferred resources add 10.7 million tonnes grading 1.18% copper, 1.76% zinc, 0.26 gram gold and 21.5 grams silver for a 1.67% copper-equivalent grade.

The deepest hole of the resource extends 700 metres below surface. The resource uses a 1.2% copper equivalent cut-off grade.

The lion’s share of the resource lies in the Main deposit, but is supplemented with mineralization in two lenses, Sumac and Esso. The Sumac lens is 350 metres west of Main, and Esso is 140 metres west of Sumac.

“Main outcrops at surface, and as you move laterally east, Sumac is a little bit deeper, maybe another 100 metres deeper from surface, and then it continues to trend down to depth,” Sorace says. “The deepest lens is Esso, and it is about 500 metres from surface.”

Drillers at Kutcho Copper’s namesake copper project in British Columbia. Credit: Kutcho Copper.

One of the key areas for further drilling is the 300-metre gap between Main and Sumac, which has been untested. A conductive geophysical anomaly coincides with the area and is 360 metres long. The most eastern hole to intersect the Sumac lens on the western margin of the gap, hole 3, returned 5 metres of 1.29% copper, 0.49% zinc and 7 grams silver.

Esso West is another target, which lies 300 metres west of the Esso lens, where 150 metres of a 1,500-metre-long geophysical anomaly has been drill tested. Drilling in this area intersected 7 metres of 2% copper, 5.2% zinc and 17 grams silver in hole 94B3. The company says 300 metres of untested horizon between hole 94B3 and Esso remain, along with another 1,000 metres of untested horizon west of the hole.

Parts of all three lenses remain open down dip, outside of the current resource, including 36% of Main, 50% of Esso and 100% of Sumac, the company says. The Footwall zone, which lies beneath the Main zone and represents a stacked massive sulphide horizon that is open in all directions, returned strong results, including the last drill hole east and down dip (No. 57), which cut 2 metres of 3.54% copper, 6.94% zinc, 316.9 grams silver and 1.47 grams gold.

Sorace doesn’t think permitting the project, 100 km east of Dease Lake, will be an issue, and says the company has good relations with both First Nations groups in the area: the Kaska and Tahltan.

Drill hole spotting on the Kutcho property in 2018. Credit: Kutcho Copper.

“Both are pro-mining, and it’s evidenced by the number of projects up in that territory, which are either in production or permitting — Kemess, Red Chris, Brucejack and Silvertip,” Sorace says. “It’s a very pro-mining part of the province.”

He also is convinced that the company can build Kutcho for less than $300 million.

“What makes this project attractive is grade,” he says. “It’s a small, high-margin, low-capital project. We still anticipate the feasibility study to come in at sub-$300 million on the capital side, so it makes it easily financeable, and with these types of grade you’ve got a nice, high-margin project.”

Kutcho acquired the project from Capstone Mining (TSX: CS) for $28.8 million in cash and 9.9% of shares. Capstone’s current shareholding in the company is 13.5%. Wheaton Precious Metals (TSX: WPM; NYSE: WPM) owns 11% and management and directors  hold 9%.

Kutcho shares are trading at 28¢ in a 52-week range of 20¢ to 64¢. The company has a $16-million market capitalization.