NEW WORLD RESOURCES LIMITED only | SCOPING STUDY RESULTS - ANTLER COPPER PROJECT, USA |
An independent Scoping Study has been completed as an initial evaluation of the potential | |
|
to develop New World's 100%-ownedhigh-grade Antler Copper Deposit in Arizona, USA.
A potential pathway to a low-impact,modest-CAPEX,high-marginunderground-mining development has been identified.
Multiple opportunities have also been identified which could further enhance the development proposition.
A Pre-Feasibility Study (PFS) has commenced to further optimise the Project development:
use | The initial JORC Mineral Resource will be updated in the coming months for integration |
• | |
into the PFS, once assays from recent deep drilling have been received; and |
• The Company is targeting completion of the PFS in Q1 2023.
The results of the Scoping Study will be utilised to prepare applications for mine permits in the coming months.
Cautionary Statement
personalThe Scoping Study referred to in this ASX release has been undertaken for the purpose of initial evaluation of a potential development of the Antler Copper Project in Arizona USA. It is a preliminary technical and economic study of the potential viability of the Antler Copper Project. The Scoping Study outcomes, production target and forecast financial information referred to in the release are based on low level technical and economic assessments that are insufficient to support estimation of Ore Reserves. The Scoping Study is presented in US dollars to an accuracy level of +/- 35%. While each of the modifying factors was considered and applied, there is o certainty of eventual conversion to Ore Reserves or that the production target itself will be realised. Further exploration and evaluation and appropriate studies are required before New World will be in a position to estimate any Ore Reserves or to provide any assurance of any economic development case. Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the Scoping Study.
Of the Mineral Resources scheduled for extraction in the Scoping Study production plan, approximately 76% are classified as Indicated and 24% as Inferred during the 10 year evaluation period. The Company has concluded that it has reasonable grounds for disclosing a production target which includes an amount of Inferred Mineral Resources. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the production target itself will be realised. Inferred Mineral Resources comprise 24% of the production schedule in the first three years of operation and 22% of production over the first 5 years of operation. The viability of the d velopment scenario envisaged in the Scoping Study does not depend on the inclusion of Inferred Mineral Resources.
The Mineral Resources underpinning the production target in the Scoping Study have been prepared by a competent person in accordance with the requirements of the JORC Code (2012). For full details on the Mineral Resource estimate, please refer to the ASX announcement of 5 November 2021. New World confirms that it is not aware of any new information or data that materially affects the information included in that release and that all material assumptions and technical parameters underpinning the estimate continue to apply and have not been
Forchanged.
This Scoping Study is based on the material assumptions outlined in Tables 2 and 3 of this announcement and which are also detailed in Appendix A. These include assumptions about the availability of funding. While New Word considers that all the material assumptions are based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by the Scoping Study will be achieved.
To achieve the range of outcomes indicated in the Scoping Study, funding in the order of US$200 million will likely be required. Investors should note that that there is no certainty that New World will be able to raise that amount of funding when needed. It is also possible that such funding may only be available on terms that may be dilutive to or otherwise affect the value of New World's existing shares. It is also possible that New World could pursue other value realisation strategies such as a sale or partial sale of its interest in the Antler Copper Project.
This announcement contains forward-looking statements. New World has concluded that it has a reasonable basis for providing these forward-looking statements and believes it has a reasonable basis to expect it will be able to fund development of the Antler Coper Project. However, a number of factors could cause actual results or expectations to differ materially from the results expressed or implied in the forward-looking statements. Given the uncertainties involved, investors should not make any investment decisions based solely of the results of this study.
New World Resources Limited I ASX: NWC I Page 1
ASX RELEASE 11 JULY 2022
New World Resources
Limited
ABN: 23 108 456 444
ASX Code: NWC
DIRECTORS AND
OFFICERS:
Richard Hill
Chairman
Mike Haynes
Managing Director/CEO
Tony Polglase
Non-Executive Director
Ian Cunningham
Company Secretary
CAPITAL STRUCTURE: Shares: 1,596.9m Share Price (8/7/22): $0.032
PROJECTS:
Antler Copper Project,
Arizona, USA
Tererro Copper-Gold-
Zinc Project, New
Mexico, USA
CONTACT DETAILS:
Unit 25, 22 Railway Rd Subiaco, WA Australia 6008
Ph: +61 9226 1356 Info@newworldres.com www.newworldres.com
New World Resources Limited ("NWC", "New World" or the "Company") is pleased to announce the results of a Scoping Study, completed by independent consultants, into the potential development of the high-grade,100%-owned Antler Copper Deposit in northern Arizona, USA ("the Antler Project" and "Scoping Study").
This initial evaluation has focused on the potential development of the mineralisation that was defined in New World's onlymaiden JORC Mineral Resource Estimate ("MRE") for the Antler Copper Deposit, announced in November 2021
("November 2021 Resource"). At a 1.0% Cu-equivalent cut-off, Indicated and Inferred Resources total:
Since the November 2021 Resource was declared, the Company has continued to drill to expand and increase the confidence levels of the mineral resource base. While exceptional intersections of mineralisation have been (and
continue to be) reported from this subsequent drilling, these additional results have not yet been incorporated into usean updated MRE. Accordingly, the Scoping Study has been based on the November 2021 Resource.
Expansion of the mineral resource base and/or increasing the confidence levels of the existing mineral resource base may have a positive impact on the economics of developing the Antler Project. This may be achieved by defining "Measured" or additional "Indicated" resources; by extending the life of the mining operation and/or by facilitating an increase in optimal throughputs.
The potential development pathway for the Antler Project is summarised in Table 1, below:
personal | ||||||
T ble 1. Project Overview | ||||||
Method | Underground mining by long-hole stoping from a single 5.0m x | |||||
5.0m decline utilising paste fill | ||||||
Tonnes Mined | 9.3Mt | |||||
Production Rate | 1.0Mtpa | |||||
Mining | Forecast | Initial Operating | 10 years from first production | |||
Period | ||||||
Operations | Contractor Mining | |||||
Average | Diluted Head | 1.62% Cu, 3.89% Zn, 0.64% Pb, 21.2g/t Ag and 0.14g/t Au (3.3% | ||||
Grade | Cu-equiv.1) | |||||
Methodology | Conventional comminution and flotation | |||||
For | Primary Grinding | 80% passing 100 microns | ||||
Processing | Concentrate Re-grind Size | 80% passing 35 microns | ||||
Products | 3 concentrates: (i) copper-gold; (ii) zinc; and (iii) lead-silver | |||||
Tailings | Dry-stack tailings in a lined facility | |||||
Roads | Entirely utilising existing roads | |||||
Rail | Transport concentrates 15km by road from Antler to existing | |||||
railway siding in Yucca. Estimated cost of transporting the | ||||||
concentrates to Mexico, by rail, included in the financial analysis. | ||||||
Infrastructure | ||||||
Power | Upgrade 15km of existing mains power transmission line that | |||||
passes within 750m of the Antler Deposit. | ||||||
Workforce | City of Kingman, population 30,000, located 55km by road to the | |||||
north of Antler. | ||||||
1Cu-equivalent grade based on 100% recovery and 100% payability of all metals. Assumptions on recoveries and payabilities have been made elsewhere in the Scoping Study.
New World Resources Limited I ASX: NWC I Page 2
1.0 SCOPING STUDY HIGHLIGHTS
Production Projection
only | • | Mining a total of 9.3Mt of material from an underground mining operation (7.3Mt of the 7.7Mt resource |
plus 2.0Mt mined through dilution) at a rate of 1.0Mtpa over an initial 10-year forecast operating life. | ||
• | Producing 271,240 tonnes of copper-equivalentmetal-in-concentrates over the forecast initial operating life | |
(including 136,000 tonnes of copper-in-concentrate): | ||
Producing an average of 30,600 tonnes of copper-equivalentmetal-in-concentrates per year once steady- | ||
state production is achieved. | ||
Producing an average of 15,350 tonnes (and up to 18,800 tonnes) of copper-in-concentrate per year once | ||
steady-state production is achieved | ||
use | The percentage of Indicated Mineral Resources is 80% (Inferred 20%) over the first five years and 76% | |
(24% Inferred) over the current 10-year evaluation period. There is a low level of geological confidence | ||
associated with inferred mineral resources and there is no certainty that further exploration work will | ||
result in the determination of indicated mineral resources or that the production target itself will be | ||
realised. | ||
Project Economics# | ||
• | Modest pre-production capital expenditure of US$201m (including US$36.5m contingency). | |
• | Revenue of approximately US$2.0bn (A$2.8bn) over the forecast initial operating life. | |
personal• | Payback 29 months after the pre-production period. | |
• | Free cash flow of US$952m (A$1.36bn) over the forecast initial operating life (undiscounted, pre-tax). | |
• | C1 cash costs, on a copper-equivalentbasis, of US$1.66/lb over the forecast initial operating life. | |
• | C1 cash costs for copper, after co-product credits, of negativeUS$0.31/lb over the forecast initial operating | |
life. | ||
• | Average annual free cash flow of US$135m/year (A$193m/year) once steady-state production is achieved | |
(Years 2-9; including sustaining capital). | ||
• | NPV7 of approximately US$524.9m (A$750m; pre-tax). | |
• | IRR of 42.0% (pre-tax). | |
• | Applying spot commodity prices*: NPV7 of approximately US$539.9m (A$771m) and IRR of 42.7% (pre-tax). | |
Potential Enhancements | ||
For | • | A larger mineral resource could extend the operating life and/or facilitate greater annual production targets: |
Positive exploration results returned during the last 8 months are expected to help achieve this; and | ||
Exploration drilling continues, with three rigs operating, to further expand the mineral resource. | ||
• | Mine schedule is yet to be optimized, which could bring forward initial production while reducing pre- | |
production capital. |
Pre-Feasibility Study (PFS)
- PFS has commenced to further refine and enhance the development parameters and economics of the Antler Project.
- Will include an update of the mineral resource in the coming months, once assays from recent deep drilling are received.
- Targeting completion of the PFS in Q1 2023, with the PFS expected to be followed immediately by a Definitive Feasibility Study (DFS).
New World Resources Limited I ASX: NWC I Page 3
Mine Permit Applications
- Environmental and social impacts of the conceptual operation will now be defined, to supplement the Scoping Study data, so that mine permit applications can be submitted in Q4 2022.
- High-gradesand small-surface footprint provide the opportunity to minimise the Project's carbon footprint.
only#Assuming commodity prices of copper - US$8,500/tonne; zinc - US$2,800/tonne; lead - US$2,000/tonne; silver - US$20.00/oz and gold - US$1,800/oz and AUD: USD Exchange Rate of 0.70.
*Spot commodity prices at 8/7/2022: copper - US$7,818/tonne; zinc - US$3,183/tonne; lead - US$1.979/tonne; silver - US$19.19/oz and gold - US$1,739/oz.
Mike Haynes, New World's Managing Director and CEO, commented:
"F llowing the exceptional success of our exploration programs since we commenced drilling in March 2020, it is very pleasing to have completed a Scoping Study on the potential development of the Antler Project.
use"This Study provides an initial evaluation of a low-impact,high-margin operation, for a modest capital outlay. This contemplates annual production of approximately 30,000 tonnes of copper-equivalentmetal in concentrates on an annual basis. The forecast production includes approximately 15,000 tonnes of copper-in-concentrate, which because of the substantial value of the co-products - could have a negative C1 cost for copper production. If achieved, this would make us one of the lowest-cost copper producers in the world1.
"The Scoping Study is based on a 10-year initial operating life. But if we can continue to expand the Resource, which remains completely open at depth and to the south, we expect that we will be able to either extend the Project-life and/or expand the production profile, which should improve the Project's economics.
personal"With Arizona being one of the most favourable mining jurisdictions in the world, we are going to continue to push to get Antler back into production as quickly as practicable. We have identified multiple areas for enhancement - which will be addressed in a Pre-Feasibility Study that we have already commenced. We will continue to target expansion of the Mineral Resource base with further exploration drilling. And we will use the results of this Scoping Study to prepare mine permit applications.
"All these activities afford us considerable opportunities to continue to realise value from Antler."
Section 2 below sets out a summary of some of the key outcomes of the Scoping Study. A more detailed "Executive Summary" of the Scoping Study is provided as Appendix A to this announcement.
2.0 SCOPING STUDY - OVERVIEW
2.1 Location, Infrastructure and Ownership
The Antler Deposit is located 15km west of the town of Yucca in northwestern Arizona, USA. An interstate highway and transcontinental rail line both service Yucca. There is a skilled workforce of 30,000 people living in the town of
ForKingman, 40km to the north.
Unsealed roads extend directly to the historical headframe at the Antler Deposit. A mains power transmission line already comes to within 750m of the headframe; albeit the power lines will need to be upgraded for mining operations.
The Antler Deposit outcrops over 750m of strike within two patented mining claims. One of New World's US- subsidiaries owns a 100% interest in these two patented claims (that cover a total of 40 acres) - where both the surface rights and the mineral rights are privately-owned.
New World also holds a 100% interest in an additional 81 unpatented mining claims on adjoining federal lands (covering 1,365 acres), where mineral exploration and mining is overseen by the Bureau of Land Management ("BLM").
1 Refer page 3 for Cautionary Statement on Inferred Resources and page 7 regarding Production Projection.
New World Resources Limited I ASX: NWC I Page 4
In March 2022 New World entered into a 5-year option agreement that provides it the right to purchase the surface rights covering 838.9 acres of land in close proximity to the Antler Deposit. This includes 320 acres that are immediately to the south of and adjoin the patented mining claims.
To develop the Antler Project, New World intends constraining all of its surface disturbances to the patented and | |
privately-owned lands. This should help streamline the mine permit approval process. | |
use only | |
personalFor | Figure 1. Infrastructure in the Antler Project Area. |
Figure 2. Preliminary Site Development Plan
New World Resources Limited I ASX: NWC I Page 5
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New World Resources Ltd. published this content on 10 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 July 2022 22:43:07 UTC.
