VANCOUVER – Western Copper & Gold Corp.’s [WRN-TSX, NYSE American] on Tuesday June 22 released the results of a preliminary economic assessment (PEA) for its 100%-owned Casino copper-gold-molybdenum deposit in the Yukon.
The study considers the project being constructed as an open pit mine, with a concentrator processing 120,000 tonnes per day and a gold heap leach facility nominally processing 25,000 tonnes per day.
The PEA envisages an initial capital investment of $3.25 billion as well as life of mine pre-tax cash flow of $13 billion ($9.1 billion) after tax.
The mill is expected to be in operation for 25 years, two years more than the heap leach facility.
The potential for new mining developments in the Yukon was underlined recently by news that Rio Tinto Plc [RIO-NYSE] had pledged to take a $35.6 million strategic investment in Western Copper & Gold.
The move is seen as an opportunity for Rio Tinto to gain a better understanding of Casino project, which ranks as one of the largest copper-gold projects in Canada. It is estimated to host measured and indicated resources 14.5 million ounces of gold and 7.6 billion pounds of copper. On top of that is an inferred resource of 6.6 million ounces of gold and 3.3 billion pounds of copper.
Casino is located in an area that also hosts Triumph Gold Corp.’s [TIG-TSXV; TIGCF-OTC; 8N61-FRA] Freegold Mountain project, well as Newmont Corp.’s [NGT-TSX; NEM-NYSE] Coffee deposit, and Rockhaven Resources Ltd.’s [RK-TSXV] Klaza gold project.
Rio Tinto agreed to take an 8.0% stake in Western Copper by acquiring 11.8 million shares in the junior for $2.17 a share. Proceeds will be used to fund specific areas of study, which will form part of the feasibility study and permitting.
The investment gives Rio Tinto – part owner of the N.W.T.’s Diavik Diamond Mine – another foothold in Canada’s north. It also adds to the likelihood that Casino is going to be a mine sooner rather than later.
The PEA released on Tuesday supersedes all previous studies and incorporates the updated mineral resource with an effective date of July 3, 2020. The study also incorporates outcomes of the Best Available Tailings Technology Study completed in 2018 with participation by First Nations and the Yukon Environmental and Socio-economic Assessment Board and the Yukon Government.
The study examines the development of the Casino project, which involves the processing of 1.3 billion tonnes of mineralized material for both mill and heap leach, with deposition of mill tailings and mine waste in a tailings-management facility (TMF).
Under the PEA, the TMF is sized to provide sufficient capacity to store 712 million tonnes of tailings and 500 million tonnes of mining waste rock and overburden materials.
On Tuesday, Western Copper shares eased 1.9% or $0.05 to $2.52 on volume of 100,370. The shares currently trade in a 52-week range of $3.35 and $1.05.