Western Copper confirms $2.3M investment by Rio to maintain stake

Following up on the strategic investment by Mitsubishi Materials, Western Copper and Gold (TSX: WRN) has confirmed that its partner Rio Tinto Canada will also follow suit in order to maintain its interest in the company.

On March 24, Mitsubishi announced that it intends to acquire approximately 5% of Western's share capital and work together to develop the company's flagship Casino copper-gold project in Yukon. Total amount of this investment would depend on whether Rio exercises its pre-existing right to participate in equity financings by the company.

On Tuesday, Western announced that Rio has elected to exercise that right in full and will subscribe for 878,809 common shares of the company for proceeds of $2.3 million, allowing Rio to maintain its approximate 7.84% interest.

As a result, Mitsubishi will be able to subscribe for 8,091,390 common shares for proceeds of approximately $21.3 million, as initially disclosed in the March 24 announcement.

"We are pleased with the continued interest Rio Tinto has shown and look forward to working with Mitsubishi and Rio Tinto to advance the Casino project." Paul West-Sells, CEO of Western Copper, commented in a news release.

Located 300 km northwest of Whitehorse, the Casino project ranks among the largest copper-gold deposits in Canada, with 7.6 billion lb. copper, 14.5 million oz. gold and 113.5 million oz. silver in measured and indicated resources.

Western has been developing the Casino property since 2008. The proposed open pit mine along with mineral processing plant and heap leach facility are currently under review by the Yukon government for their potential socio-economic impacts.

In summer 2022, Western published a feasibility study on the Casino project, outlining an after-tax net present value, at an 8% discount rate, of $2.3 billion with an internal rate of return of 18.1%.

Over the 27-year project life (in the case of heap leach, 24 years), annual production would reach 163 million lb. copper, 211,000 oz. gold and 1.3 million oz. silver, the study shows.

THIS ARTICLE WAS WRITTEN FOR MINING.COM