Western Copper and Gold (TSX: WRN; NYSE: WRN) completed its 2021 exploration and drilling program and is moving forward with the feasibility study at its 100%-owned Casino copper-gold project 300 km northwest of Whitehorse, Yukon.
Western Copper, through its Casino Mining subsidiary, has been conducting baseline environmental and geotechnical as well as social and economic studies since 2008. The 2021 field program concluded at the end of September. It consisted of metallurgical and geotechnical drilling, resource confirmation drilling, exploration drilling, soil sampling, and Enersoft logging of recent and historic cores using artificial intelligence (AI). Metallurgical programs are under development for both sulphide ore that would be milled and oxide ore that is amenable to heap leaching.
The company has engaged M3 Engineering and Technology to conduct the feasibility study, targeted for completion in the second quarter of 2022. M3 also completed the preliminary economic assessment in June, and the feasibility study will be based on that information.
After taxes and using an 8% discount rate, the study projected Casino's net present value at $2.3 billion and its internal rate of return at 19.5%. The after-tax life-of-mine free cash flow is estimated to be $13 billion.
The base case contemplates a 25-year mine life. Pre-production capital costs would be $3.3 billion plus sustaining capital of $719 million. The copper concentrate would average 28% copper, 25.9 g/t gold and 119.8 g/t silver. The molybdenum concentrate produced would have a grade of 56% moly. A contemplated second phase of construction would extend the life of the project to 47 years with $1.8 billion in additional sustaining capital.
The Casino deposit resources suitable for milling (first phase) include 20.4 million measured and indicated tonnes grading 0.16% copper and 0.18 g/t gold. The corresponding inferred resource is 1.4 billion tonnes grading 0.1% copper and 0.14 g/t gold.
The leachable resources (second phase) include 217.4 million measured and indicated tonnes grading 0.03% copper and 0.25 g/t gold plus 31.1 million inferred tonnes grading 0.03% copper and 0.17 g/t gold.
The Casino project needs to undergo environmental assessment by the Yukon Environmental and Socio-economic Assessment Board and permitting and licencing by the Yukon government and Yukon Water Board. Construction of a conventional open pit mine and a mineral processing plant would take about four years.
A feasibility study was previously completed for Casino in 2013.