The North Island project, near Port Hardy, British Columbia, is one of Canada’s most attractive copper/gold porphyry projects, TSX-V-listed Northisle Copper and Gold said on Thursday, announcing the results of the latest preliminary economic assessment (PEA).
The 2021 PEA illustrates a significant improvement in the potential of the North Island project, said CEO Sam Lee.
“Copper and gold production increased materially resulting in a significant increase in NPV [net present value] and IRR [internal rate of return], while all-in sustaining costs remain in the first quartile and initial capital is modest for a long-life and significant copper and gold asset,” he said.
The project has an aftertax NPV, using an 8% discount, of C$1.1-billion and an IRR of 19%.
The payback period is 3.9 years, driven by modest capital expenditure of C$1.4-billion, owing to infrastructure from historical mining and other industrial activity.
Over its 22-year mine life, North Island would produce an average of 177-million pounds a year of copper-equivalent over the first six years, including 112-million pounds of copper, 112 000 oz of gold and 2.7-million pounds of molybdenum.
During the first six years, the project would average yearly tax free cashflow of C$32-million.
The 2017 PEA was based on yearly copper production of 82-million pounds, 79 000 oz of gold and three-million pounds of molybdenum over 22 years. That study calculated an NPV of C$550.4-million and an IRR of 14.3%.
Lee said that the concentrate planned to be produced by the North Island would be a premium product, which could be highly attractive to global smelters.
“The significant gold production is anticipated to provide several options for lower cost capital financings. We are excited to be advancing what we believe is one of the most attractive Canadian copper projects during the start of a new mining super cycle,” he commented.
Based on the Red Dog and Hushamu deposits, the PEA contemplates an openpit mining operation, which incorporates a 75 000 t/d concentrator.
Exploration activities would be reactivated in 2021 with an initial drill programme focusing on three main areas: Red Dog, Pemberton Hills and Hushamu.