Western Copper feasibility on Casino outlines $2.3B after-tax NPV, $3.6B capex

Western Copper and Gold (TSX: WRN; NYSE: WRN) has shared the feasibility study on its flagship Casino deposit located 300 km northwest of Whitehorse, Yukon. The project is being developed as an open pit mine, with a concentrator processing 120,000 tonnes per day to recover copper, gold, molybdenum and silver, as well as a 25,000-tonne-per-day oxide heap leach facility to recover gold, silver and copper.

The 2022 feasibility study incorporates an updated mineral resource and reserve estimate as well as results of the preliminary economic assessment published in June 2021.

The study examines the development of the Casino project, which comprises the processing of 1.4 billion tonnes of reserves (1.2 billion tonnes grading 0.22 gram gold per tonne, 0.19% copper and 0.02% molybdenum for milling, and 210 million tonnes grading 0.26 gram gold, 1.9 grams silver and 0.04% copper for heap leaching), with deposition of mill tailings and mine waste in the tailings management facility.

Over the 27-year project life (in the case of heap leach, 24 years), annual production would reach 163 million lb. copper, 211,000 oz. gold, 1.3 million oz. silver, and 15.1 million lb. molybdenum. The base case scenario assumes metals prices of US$3.60 per lb. copper, US$1,700 per oz. gold, US$22 per oz. silver and US$14 per lb. molybdenum.

At the base-case metals prices, the Casino project’s after-tax net present value, at an 8% discount rate, comes to $2.3 billion, with an internal rate of return of 18.1%. After-tax cash flow generated by the project totals $10 billion, including $951 million per year over the first four years. Its initial capital investment is $3.6 billion, taking the payback period to 3.3 years.

“The results from the feasibility study confirm the project’s robustness and ability to withstand inflationary pressures,” said Paul West-Sells, president and CEO of Western Copper. “This study reaffirms Casino as one of the very few long-life copper-gold projects with robust economics in a top mining district, the Yukon.”

The company has been working at the Casino project since acquiring the property back in 2008. Permitting of the project, which encompasses the construction of a conventional open pit mine along with a mineral processing plant and heap leach facility, will require a review of its environmental and socio-economic impacts by the Yukon Environmental and Socio-economic Assessment Board.

The Casino project currently has 2.4 billion tonnes of measured and indicated resources (both mill and heap leach), at grades of 0.14% copper, 0.19 gram gold per tonne and 1.5 grams silver (for 7.6 billion lb. copper, 14.5 million oz. gold and 113.5 million oz. silver), based on an updated resource block model developed during December 2021.