Western Copper feasibility on Casino outlines $1.8 billion after-tax NPV

The fly-in camp at the Casino copper-gold project in the Yukon. Credit: Cathie Archbould.

Western Copper and Gold (TSX, NYSE: WRN) has put out a feasibility study on its flagship Casino deposit located 300 km northwest of Whitehorse, Yukon. The project is being constructed as an open pit mine, with a concentrator processing 120,000 t/d to recover copper, gold, molybdenum and silver, as well as a 25,000 t/d oxide heap leach facility to recover gold, silver and copper.

The 2022 feasibility study supersedes all previous studies, including two prefeasibility studies and a full feasibility study, and incorporates an updated mineral resource and reserve estimate as well as results of the preliminary economic assessment published in June 2021.

The Casino project currently has 2.39 billion tonnes of measured and indicated resources (both mill and heap leach), at grades of 0.14% copper, 0.19 g/t gold and 1.5 g/t silver (for 7.6 billion lb. copper, 14.5 million oz. gold and 113.5 million oz. silver), based on an updated resource block model developed during December 2021.

The FS examines the development of the Casino project, which comprises the processing of 1.43 billion tonnes of mineral reserve (1.22 billion tonnes grading 0.22 g/t gold, 0.19% copper and 0.02% molybdenum for the mill, and 210 million tonnes grading 0.26 g/t gold, 1.9 g/t silver and 0.04% copper for heap leach), with deposition of mill tailings and mine waste in the tailings management facility.

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, 1.28 million oz. silver and 15.1 million lb. molybdenum. The base-case scenario assumes metals prices of $3.60/lb. copper, $1,700/oz. gold, $22/oz. silver and $14/lb. molybdenum.

At the base-case metals prices, the Casino project’s after-tax net present value, at an 8% discount rate, comes to C$2.3 billion (about $1.8 billion), with an internal rate of return of 18.1 %. After-tax cash flow generated by the project totals C$10 billion, including C$951 million per year over the first four years. Its initial capital investment is C$3.62 billion, taking the payback period to 3.3 years.

“The results from the feasibility study confirm the project’s robustness and ability to withstand inflationary pressures,” CEO Paul West-Sells said in a media release. “This study reaffirms Casino as one of the very few long-life copper-gold projects with robust economics in a top mining district, the Yukon.”

The company has been developing the Casino project since acquiring the property back in 2008.

Permitting of the project, which encompasses the construction of a conventional open pit mine along with a mineral processing plant and heap leach facility, will require a review of its environmental and socio-economic impacts by the Yukon Environmental and Socio-economic Assessment Board.