Mitsubishi buys into Western and its Casino copper-gold project

Western Copper and Gold (TSX: WRN; NYSE: WRN) says Mitsubishi Materials has agreed to acquire a 5% interest in the company, which will use the investment to advance its Casino copper-gold project in the Yukon. This porphyry deposit is found 300 km northwest of Whitehorse. 

Mitsubishi will acquire a number of common shares that will represent 5.0% of Western’s issued and outstanding shares, on an undiluted basis, at a price of $2.63 per share. 

The exact number of shares to be issued and proceeds to be received depend on whether Rio Tinto Canada elects to exercise its pre-exiting right to participate on a prorate basis in equity financings in order to maintain its 7.84% interest in Western. Assuming Rio Tinto elects to exercise its right in full, it is expected that approximately 8.1 million share will be issued to Mitsubishi for an aggregate gross proceeds of $21.3 million. Rio Tinto will be issued 878,809 shares, for aggregate gross proceeds of $2.3 million. 

The Casino project underwent a significant resource expansion in 2020, and the feasibility study was released in 2022. This is the fifth-largest undeveloped copper-gold deposit controlled by a junior. The measured and indicated resources contain 7.6 billion lb. of copper and 14.8 million oz. of gold in 2.26 billion tonnes grading 0.15% copper and 0.18 g/t gold. It also has estimated grades of 0.016% molybdenum and 1.4 g/t silver. Expressed as a copper-equivalent, the grade is 0.31%.  

The feasibility study puts the after-tax net present value with an 8% discount at $2.3 billion and an internal rate of return of 18.1%. Over its 27 years of production, Casino has an estimated cash flow of $10 billion. 

Annual production would be over the life of the project will be 163 million lb. copper, 211,000 oz. gold, 1.2 million oz. silver, and 15.1 million lb. molybdenum in concentrates. About 57,000 oz. of gold and 136,000 oz. of silver will be produced as doré, and 1.2 million lb. of copper as precipitate. 

Proven and probable reserves for the mill total 1.22 billion tonnes grading 0.19% copper and 0.22 g/t gold. Reserves suitable for heap leaching total 209.6 million tonnes at 0.26% copper and 0.036 g/t gold. 

Total measured and indicated resources for both types of ore are 2.49 billion tonnes grading 0.14% copper and 0.18 g/t gold. There are also inferred resources that total 1.42 billion tonnes at 0.10% copper and 0.14 g/t gold. 

Details of the arrangement are posted on www.WesternCopperAndGold.com.