USA-focused mineral explorer PolarX has been buoyed by a recently completed scoping study on its Alaska Range copper-gold project highlighting a potentially robust set of economics. The study assessed the combined mining of the project’s high-grade Zackly copper-gold-silver and Caribou Dome copper deposits and confirmed the operation’s potential viability and leverage from future resource expansions.
According to the study, the Alaskan venture could generate a massive $1 billion in revenue – $1.16b to be exact – over a mine life of 6.5 years and an average annual free cash flow of $53 million. It also boasts a pre-tax internal rate of return of 26 per cent and a pre-tax net present value of $103 million. The operation would require a pre-production capital cost of $158 million and a C1 cash cost of $2.7 per pound produced with a payback period of 2.25 years.
The scoping study was based on a 2017 mineral resource estimate of Caribou Dome, an updated 2018 resource for Zackly and new metallurgical test work results for both deposits. Both deposits combined amount to 6.8 million tonnes of ore grading 2.5 per cent copper equivalent for 131,000 tonnes of copper and 213,000 ounces of gold contained.
Significant resource expansion potential is evident at Caribou Dome where the most recent drilling returned 19m at 7 per cent copper from 45.16m whilst remaining open at depth and along strike. Comparably at Zackly, the resource remains open at depth and immediately along strike to the east.
PolarX says its project’s economics are most responsive to the copper price and copper recovery. Notably, the study was based off higher-than-prevailing prices for copper and gold. Prices of US$9000 per tonne of copper and US$1800 per ounce of gold were used whereas current prices are US$7574 and US$1650, respectively. The scoping study contains price disparities of 15.8 per cent for copper and 8.3 per cent for gold. It is worth mentioning the prices for copper and gold reached record-high levels this year. Copper – the malleable metal that makes up the veins of our electronic network – was trading above US$10,790 whereas the precious yellow metal, gold reached US$2052. Both high-water marks were set in March.
Irrespective of the repressed prices, the company believes it can turbocharge its economics with further infill and expansionary drilling and improve metal recoveries via further metallurgical test work.
The company says the study’s outcomes fully justify additional investment on extension drilling at both deposits whereby an increase in mineral resources could significantly enhance projected returns.
Planning of resource extension drilling programs has commenced whilst the company is also eyeing additional metallurgical test work. Further test work will aim to achieve improved copper recovery and concentrate grade for Caribou Dome and improved gold recovery for Zackly.
With a significant resource potential now marked out, PolarX is well-positioned to continue shifting through its Alaskan gears.
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By Matt Birney
