Northisle Copper and Gold (TSX: NCX) has released an updated preliminary economic assessment on a 22-year, 75,000 tonne-per-day open pit development within its North Island project at the north end of Vancouver Island in B.C.
The study latest "confirms that the North Island project is one of the most attractive copper-gold porphyry projects in Canada," the company stated in a press release. The project would mine the Red Dog and Hushamu deposits at North Island and produce a copper concentrate with gold by-products as well as a molybdenum concentrate.
Over its lifetime, the mine would produce an average of 95.9 million lb. of copper, 99,900 gold oz., and 3 million lb. of molybdenum (155.9 million lb. of copper-equivalent) a year at all-in sustaining costs of $2.14 per lb. of copper-equivalent.
Based on an initial capital cost estimate of $1.4 billion and $197 million required in sustaining capital, the after-tax net present value estimate comes in at $1.1 billion, based on an 8% discount rate, with a 19% internal rate of return. The study assumed metal prices of US$3.25 per lb. copper, US$1,650 per oz. gold and US$10 per lb. molybdenum.
"The concentrate planned to be produced by the North Island project is anticipated to be a premium product which would be highly attractive to global smelters," Sam Lee, Northisle's president and CEO stated in the press release. "Furthermore, the significant gold production is anticipated to provide several options for lower cost capital financings." .
Opportunities to improve the project economics include exploration - an initial drill program will focus on the Red Dog, Pemberton Hills and Hushamu areas. Additional upside areas include potential for sales of a pyrite concentrate, use of a historical pit for tailings storage, trolley assisted haulage options and metallurgical optimization, among others.
With the PEA release, Northisle now plans to advance North Island towards a prefeasibility study.
Indicated resources across Hushamu and Red Dog total 527.3 million tonnes grading 0.2% copper, 0.24 gram gold per tonne and 0.008% molybdenum (0.41% copper-equivalent) with an additional 417.3 million inferred tonnes at 0.15% copper, 0.18 gram gold and 0.006% molybdenum (0.31% copper-equivalent).
North Island sits within a 331.5-sq. km block that covers a 50-km stretch of ground.
In a separate news release, Northisle announced that it had regained 100% control of the Pemberton Hills target at North Island. This area had previously been optioned to Freeport-McMoRan (NYSE: FCX). The latter provided Northisle with a notice of termination of their option.
According to Jack McClintock, Northisle's VP of exploration, prior exploration over this target area defined a 1.5 km by 1 km target, within a 3.5 km by 1.5 km lithocap (subsurface alteration area) for an anticipated buried copper-gold porphyry system. The target includes a coincident geophysical anomaly as well as trace element, clay, geological and structural vectors. The company has allocated a $1-million , three-hole budget to test the target, which is expected to start around mid-March.