Faraday Copper rallies on $15 million bought deal to advance Arizona project

Faraday Copper’s Copper Creek project, Arizona. Credit: Henry Lazenby.

Faraday Copper (TSX: FDY) rallied on Wednesday following announcement of a C$20 million ($15m) bought deal financing, with Ventum Financial, Canaccord Genuity and TD Securities acting as its underwriters.

Under their agreement, the underwriters will purchase 25 million common shares of Faraday at C$0.80 per share. By midday, the stock had gone up to C$0.81 a share, for a 6.6% intraday gain and a C$143.4 million ($105m) market capitalization.

Proceeds of the offering will go towards Faraday’s Copper Creek project in Arizona, which the company labelled as one of the largest undeveloped copper projects in the country. It hosts a vast, 3-km-long porphyry deposit that has a measured and indicated copper resource totalling 4.2 billion lb., contained within 422 million tonnes grading 0.45% copper.

A May 2023 preliminary economic assessment gave Copper Creek a post-tax net present value (discounted at 7%) of $713 million and an internal rate of return of 16%. Initial capital is estimated at $798 million, with a construction period of two years. The payback period is just over 4 years.

The operation, which will initially start as an open pit then ramping up to unlock the large underground portion, will have a life of 32 years, producing 3.2 billion lb. of copper, plus 45.1 million lb. of molybdenum and 9.7 million oz. of silver.

The entire project covers 73 sq.km. in area and has a rich history of exploration and mining dating back to the 1860s. Approximately 360,000 tonnes of high-grade ore have been extracted from the site to date.