Vancouver, British Columbia--(Newsfile Corp. - February 22, 2023) - Kutcho Copper Corp. (TSXV: KC) (OTCQX: KCCFF) ("Kutcho Copper" or the "Company") is pleased to provide an update on various project opportunities with a focus on potential for reductions in capital costs at its Kutcho high-grade copper - zinc development project located in north-western British Columbia.
Vince Sorace, President & CEO of Kutcho Copper, comments: "Since completion of the Feasibility Study, we have been conducting further reviews and enhancements of project design and engineering, with a focus on potential for reductions in capital cost. One instance of such findings includes the ability to delay start of the underground operations, which could reduce initial capital costs by approximately C$50 million, according to in house Company estimates. In addition to the terms of the existing Wheaton Precious Metals stream (from which we are expecting approximately C$76 million towards development capital) combined with the delay in underground mining, initial capital costs could be reduced to approximately C$350 million before considering other opportunities to further reduce."
"In addition, Canada recently introduced its Critical Minerals Strategy, with the desire to increase the supply of responsibly sourced minerals such as copper and zinc. One element of this strategy recognizes that off-grid mining operations are heavily dependent on greenhouse gas emitting energy sources for power, such as diesel, largely due to the lack of access to energy grids in Canada's northern and remote regions. In its Critical Minerals Strategy, the federal government has budgeted $1.5 billion for infrastructure development, recognizing that in regions with high critical mineral potential, there is a need to address gaps in necessary infrastructure. Addressing these gaps could be achieved through a range of investments including expanding existing energy network capacity (e.g., hydroelectricity generation and transmission lines) and potential access road funding. Kutcho is engaged in discussions with federal and provincial government regarding potential extensions of existing transmission lines towards its project."
The 2021 Feasibility Study on the Kutcho Project (see news release dated November 8, 2021 and Feasibility Study filed on SEDAR on December 22, 2021) identified several refinements and studies to be undertaken during, and prior to, the detailed engineering phase. Refined understanding is being progressed through these engineering studies and this is either providing further security or revealing opportunity for improvement. All cost details presented are using the 2021 Feasibility Study unit rates and overall outcomes are within expected variances for overall economic performance. Some of that work has determined:
- Deferral of the start of underground mining to year 2 of operations has the potential to reduce initial capital by C$50 million with negligible impact to both the net present value (NPV) and internal rate of return of the project as compared to the 2021 Feasibility Study.
- Replacement of the SAG mill with a tertiary crushing and ball milling circuit has been assessed and is likely to reduce plant capital by C$8.5 million and may favourably affect operating cost.
- The 2021 Feasibility Study considers the use of only new equipment. There may be some non-critical applications where the use of good quality, second-hand equipment may potentially reduce initial capital costs.
- Ongoing work in preparation for detailed engineering have, thus far, confirmed the results of the 2021 Feasibility Study and, in some cases, show potential to increase performance, reduce cost and increase accuracy. Some areas of work include, but are not limited to, refinements to process controls, ore sorter performance and underground backfill strength.
- More details and improvements to what was already a strong closure plan has the potential to further minimize the surface footprint of the project, further improve water treatment options and add more details to the pit backfill.
Underground Mine Sequencing
A review of the timing of initiating the underground mine extraction has highlighted an opportunity to marginally delay commencement of underground development activities. Preliminary studies have determined that the underground start could be moved to commence at the end of the first year of operations with minimal impact on the NPV whilst reducing the initial project capital by approximately C$50 million. Further work is required to fully define this opportunity. Delaying the underground start would also decrease operational management load during start-up.
SAG Mill Replacement and Other Plant Design Refinements
Combined with work undertaken in the 2021 Feasibility Study, a recent review conducted by Halyard Inc. of the primary grind circuit has determined that the SAG Mill circuit can be replaced with tertiary crushing plus ball milling which advantageously reduces capital and power consumption. Removal of the SAG would also remove the requirement for additional comminution testing as identified in the 2021 Feasibility Study. The Halyard study identified potential reductions in concrete foundations, subject to confirmation of site specific geotechnical conditions. These opportunities suggest potential to reduce plant capital by C$8.5 million, which will be verified through detailed engineering and incorporation of site geotechnical data collection and assessment, which is planned for Q2 and Q3 2023.
Process Control Refinements
The Halyard review also identified other potential opportunities in the process design criteria that will be investigated in Q1 and Q2 2023 and results of the program will feed into the detailed engineering process. These initiatives are centred on primary grind size, reagent consumption and grinding media.
Ore Sorter
The 2021 Feasibility Study recommended more bulk ore sorter testing. In particular, a low grade sample test will be undertaken in Q1 2023 that will provide a greater understanding of low grade particle sorting dynamics. Understanding low grade ore sorting may lead to a mining method strategy that could include more material at the edges of the open pit ore than is designed for at present, thus reducing mining losses and allowing for the added dilution to be removed by the ore sorter. Note that the open pit mine mining loss for the current mineral reserve amounts to 0.79 Mt at 0.91% Cu, 0.98% Zn, 15 g/t Ag and 0.53 g/t Au.
Confirming Underground Backfill Strength
A preliminary uniaxial compressive strength test on a sample of underground fill material using ore sorter reject material, binder type and proportions as set out in the 2021 Feasibility Study confirmed the strength requirements for the stope backfill. Additional testing is required to confirm these initial results, but the preliminary test result is very promising, confirming a major underground cost control feature.
Financial
As noted in the 2021 Feasibility Study, higher metal prices and, in particular, higher copper prices would have the strongest impact on project value. The relative impacts are discussed in Section 21 of the 2021 Feasibility Study. The analysis in Section 21 was completed without altering the cut-off and hence underground stopes shapes and the pit design were held constant. This approach is conservative as feedback from higher metal prices would drop cut-off grades and alter mining stopes and the pit design potentially bringing more material into the mineral reserves, reduce dilution and convert material currently categorized as waste into ore.
Strong Closure Plan:
- Work has continued to minimize the surface footprint of the project. On closure, the design would deliver a functional landform that reinstates natural drainages and the alpine ecosystems.
- The 2021 Feasibility Study includes use of Non Potential Acid Generating (NPAG) rock material from the open pit to build the tailing management facility (TMF) with a very high factor of safety. Further engineering design work has been completed with the objective of augmenting of the TMF wall buttress volume and improving long-term stability and safety by allowing progressive reclamation during the mine life.
- A key part of the progressive closure is relocating all potential acid generating (PAG) material back into the base of the pit or underground where sub-aqueous or anoxic conditions will favourably reduce potential acid rock drainage and metal leaching. The PAG material in the pit will be covered by layers of NPAG rock material, contoured and revegetated.
- All contact water during mine life and during the closure process is to be treated at the water treatment plant until the long-term acceptable water quality is achieved by passive means. The deep anoxic burial of PAG material and covering with NPAG material is expected to decrease the length of post-closure water management required.
Qualified Persons
The technical or scientific information in this press release has been reviewed and approved by Andrew Sharp, P. Eng BC (Lic. No. 47907), FAusIMM, Chief Operating Officer for Kutcho Copper, who serves as a qualified person under the definition of National Instrument 43-101.
About Kutcho Copper Corp
Kutcho Copper Corp is a Canadian resource development company focused on expanding and developing the Kutcho high grade copper-zinc project in northern British Columbia. Committed to social responsibility and the highest environmental standards, the Company recently completed a Feasibility Study on the Kutcho project and is advancing permitting with the objective of getting to a positive construction decision.
Vince Sorace
President & CEO, Kutcho Copper Corp.
For further information regarding Kutcho Copper Corp., please email info@kutcho.ca or visit our website at www.kutcho.ca.
Cautionary Note Regarding Forward-Looking Statements
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains certain statements that may be deemed "forward-looking statements" with respect to the Company within the meaning of applicable securities laws. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although Kutcho Copper believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, are subject to risks and uncertainties, and actual results or realities may differ materially from those in the forward-looking statements. Such material risks and uncertainties include, but are not limited to, statements and information related to the Feasibility Study; the Company's ability to realize on the opportunities for project refinements and enhancements set out in this news release; the Company's ability to raise sufficient capital to fund its obligations under its property agreements going forward, to maintain its mineral tenures and concessions in good standing, to explore and develop the Kutcho project or its other projects, to repay its debt and for general working capital purposes; changes in economic conditions or financial markets; the inherent hazards associates with mineral exploration and mining operations, future prices of copper and other metals, changes in general economic conditions, accuracy of mineral resource and reserve estimates, the ability of the Company to obtain the necessary permits and consents required to explore, drill and develop the Kutcho project and if obtained, to obtain such permits and consents in a timely fashion relative to the Company's plans and business objectives for the projects, including the environmental assessment process; the general ability of the Company to monetize its mineral resources; and changes in environmental and other laws or regulations that could have an impact on the Company's operations, compliance with environmental laws and regulations, aboriginal title claims and rights to consultation and accommodation, dependence on key management personnel and general competition in the mining industry. Forward-looking statements are based on the reasonable beliefs, estimates and opinions of the Company's management on the date the statements are made. Except as required by law, the Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
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