Western Copper releases PEA for $3.3B Casino project in Yukon

The preliminary economic assessment for the Casino copper-gold-molybdenum project is positive, says owner Western Copper and Gold (TSX: WRN; NYSE: WRN). The PEA considered an open pit mine, a 120,000-tonne-per-day concentrator, and a 25,000tonne-per-day gold heap leach facility.

The study forecast an after-tax net present value (at an 8% discount rate) of $2.3 billion and an after-tax internal rate of return of 19.5%. Cash flow over the first four years of operation would be $965 million per year at metal prices of US$3.35 per lb. copper, US$1,600 per oz. gold, US$24 per oz. silver, and US$12 per lb. moly. The pre-production capital requirement is $3.25 billion.

The study has several key changes from the studies done earlier, chief among them the tailings management facility (TMF). It is sized to store about 712 million tonnes of tailings and 500 million tonnes of waste rock and overburden. Non-acid generating tails will be used for dam construction. The use of hydrocyclones and dewatering screens will substantially reduce the quantity of free standing water in the TMF. Changes to the design of the starter dam will reduce construction risk. Although surplus water is not expected, a water treatment facility will be built to handle any surplus conditions.

Western Copper and Gold’s camp at the Casino project in the Yukon Territory. Credit: Western Copper and Gold.

The parameters for the TMF were selected after the delivery of the Best Available Tailings Technology (BATT) study completed in 2018. First Nations, the Yukon Environmental and Socio-economic Assessment Board and the territorial government all played a part in its planning. The design concept also reflects the guidance received from the Independent Engineering Review Panel.

Initial production will focus on the deposit’s oxide cap as a heap leach operation. The main sulphide deposit will be processed using a conventional mill to create copper-gold-silver and molybdenum concentrates. At 120,000 tonnes per day, the mill will handle 25 years of mining initially.

The PEA also examined a second phase of development that would extend the mine life for a total of 47 years with the original concentrator. The expansion would carry no additional capex, only sustaining costs.

The resource estimate released a year ago for sulphide material that will be milled included 2.2 billion measured and indicated tonnes at 0.16% copper, 0.18 gram gold per tonne, 0.017% moly, and 1.4 grams silver per tonne, containing 7.4 billion lb. copper, 12.7 million oz. gold, 811.6 million lb. molybdenum, and 100.2 million oz. silver. Inferred resources stand at 1.4 billion tonnes grading 0.1% copper, 0.14 gram gold, 0.01% moly, and 1.2 grams silver.

The resources that are amenable to heap leaching include 217.4 million measured and indicated tonnes grading 0.03% copper, 0.25 gram gold and 1.9 grams silver, containing 166.5 million lb. copper, 1.8 million oz. gold and 13.3 million oz. silver. The inferred resource is 31.1 million tonnes at 0.03% copper, 0.17 gram gold and 1.7 grams silver.