New World Resources releases enhanced scoping study evaluating 48% larger resource base at Antler copper deposit

New World Resources (ASX: NWC) has updated a scoping study to evaluate the development of a 48% larger resource base at its wholly-owned high-grade Antler copper deposit in Arizona.

The original study released in July last year evaluated the potential development of a maiden resource for Antler, which comprised 7.7 million tonnes at 2.2% copper, 5.3% zinc, 0.9% lead, 28.8 grams per tonne silver and 0.18g/t gold (7.7Mt at 3.9% copper equivalent).

Subsequent exploration drilling led to a 48% increase in the resource in November, to 11.4Mt at 2.1% copper, 5% zinc, 0.9% lead, 32.9g/t silver and 0.36g/t gold.

The updated and enhanced scoping study evaluates development of the new resource, incorporating a new mine design and mining schedule; a larger processing plant; and an optimised infrastructure footprint.

New World Resources said commodity prices utilised in the initial study remain unchanged, with copper at US$8,500/t; zinc at US$2,800/tonne; lead at US$2,000/t; silver at US$20/oz; and gold at US$1,800/oz.

Substantially larger operation

The updated scoping study has granted New World Resources a pathway to developing a substantially larger underground mining operation with a longer initial operating period.

It will comprise a low-impact, modest-capital expenditure, high-margin operation feeding a stand-alone processing plant.

The study contemplates a significantly increased production profile along with higher financial returns.

It includes the mining of 15.4Mt at a rate up to 1.5Mt per annum over an initial 13 year life, compared to the original production profile of 9.3Mt at a rate of 1Mtpa over 10 years.

The study also highlights the production of 381,400t of copper equivalent metal in concentrate over the initial operating period (including 190,300t of copper-in-concentrate), reflecting a 41% increase in copper-equivalent metal production over the original study.

In addition to substantial increases in base metal production, 57,400oz of gold and 7.7Moz of silver in concentrate are expected to be produced over the initial operating period, with a corresponding 107% increase in revenue from precious metals to US$258 million.

Favourable economics

New World Resources managing director Mike Haynes said the updated scoping study marked another “significant step” in the company’s strategy to develop a long-life, high-grade copper operation at Antler.

He said “more favourable economics” had been incorporated into the updated scoping study, including a 50% (US$1 billion) increase in revenue over the initial period to US$3 billion and a 58% (US$552 million) increase in free cash flow to US$1.5 billion after all capital expenditures.

The study highlighted a modest 25% increase in pre-production capital to US$252 million (including a US$44.2 million contingency), with the majority used to increase processing plant capacity; and a steady-state production averaging 1.3Mtpa over 10 years generating US$153 million of free-cash per year.

The net present value of the Antler project increased by 59% to US$835 million pre-tax, and the internal rate of return was 40.2% pre-tax compared to the initial 42%.

Payback period increased from 29 months to 36 months due to an earlier and staged start of decline development.

“Antler now stacks up as one of the most financially robust copper development opportunities in the world at a time when global copper supplies are rapidly declining and global demand is forecast to continue to be very strong,” Mr Haynes said.

Resource base expansion

New World Resources believes there is considerable potential to further expand the resource base at Antler as the deposit remains open at depth, with thick and high-grade mineralisation intersected in some of the deepest holes drilled to date.

A number of undrilled, look-a-like coincident soil geochemistry anomalies have been delineated over 6 kilometres of strike immediately to the north-east of the deposit, providing opportunities for the company to discover a cluster of volcanogenic massive sulphide deposits.

Regional discoveries could potentially be trucked to the processing facility which will be constructed at the project site.