The Chinese translation is being made; the original is shown for now.
查看配图CuMo is located inside the Boise National Forest in southwestern Idaho. Credit: U.S. Forest Service/Wikimedia Commons
An updated preliminary economic assessment (PEA) for Idaho Copper’s (NYSE-A: COPR) CuMo copper-molybdenum-silver project gives it a 46-year life and improves some economics from a previous study but it still carries significant costs and a modest rate of return.
Discounted at 8%, the update more than quadruples CuMo’s post-tax net present value (NPV) to $1.8 billion (C$2.6 billion) over the 2020 PEA, while initial capital costs fell by 62% to $1.1 billion, the company reported Wednesday. The post-tax internal rate of return (IRR) doubled to 18.5%. CuMo is about 60 km northeast of state capital Boise.
“This is a very different project from the one that was described in 2020,” Idaho Copper CEO Andrew Brodkey said in a release on Wednesday.
Processing cuts costs
“Starting with a smaller plant and sorting the ore before it reaches the mill means we need materially less capital up front, with a rapid payback driven by ore sorting. Very few copper projects anywhere combine returns at this level with such a strong mine life, and fewer still sit in the United States and carry molybdenum, rhenium and tungsten alongside the copper.”
The updated assessment comes as the U.S. seeks to expand domestic production of critical minerals and reduce its reliance on foreign suppliers, potentially giving projects such as CuMo strategic importance beyond their financial returns.
Idaho Copper shares fell 4% to $3 apiece in New York on Wednesday morning, valuing the company at $56.3 million (C$81 million). The stock has traded in a 12-month range of $2.05 to $18.
In addition to the initial capital costs, the PEA update envisions staged development at CuMo, with an expansion in operations in year five that’s expected to cost $658 million to raise the mine’s capacity.
41M lb copper
CuMo could produce 41.6 million lb. of copper, 30.5 million lb. of molybdenum and 1.3 million oz. of silver annually in the project’s first 21 years. It has a payback period of 5.9 years, according to the update.
The study assumes substantially higher metal prices than in the 2020 PEA. The copper and molybdenum prices gained 66% to $5 per lb. and $25 per lb., respectively, and silver increased by about 186% to $50 per ounce.
CuMo hosts 2.2 billion measured and indicated tons grading 0.08% copper, 0.05% molybdenum, and 2.5 grams silver per tonne for 3.8 billion lb. contained copper, 1.5 billion lb. molybdenum and 165.5 million oz. silver, according to the 2020 PEA. Inferred resources total 2.5 billion inferred tons at 0.06% copper, 0.04% molybdenum, and 2.1 grams silver for 3.4 billion lb. contained copper, 1.4 billion lb. molybdenum and 158.8 million oz. silver. Idaho Copper plans to work on a prefeasibility in 2027, targeted for completion in 2028, Brodkey said.