The prefeasibility study at Copper King (above) is expected to be completed by the end of 2020. (Photo: U.S. Gold)
U.S. Gold Corp. has received a proposal to upgrade the Copper King Preliminary Economic Assessment (PEA) to a prefeasibility study (PFS) with the objective of completing the PFS by the end of 2020. Copper King is located in the Silver Crown mining district of southeast Wyoming and approximately 20 miles west of Cheyenne.
A December 2017 PEA indicated an economic resource based on $1,250 per ounce (oz) gold and $2.25/lb copper. The PEA economics done at $1,275/oz gold and $2.80/lb copper generated a pretax cash flow of $296.8 million, net present value (NPV) of $178.5 million at a 5% discount rate, and an annual internal rate of return (IRR) of 33.1%.
The capital expense for the project is estimated at $114 million with a payback in just under 2.5 years.
Based on internal updated resource prices, Copper King’s preliminary economic assessment (PEA) has a projection of pretax cash flow of $510.54 million, NPV of $321.6 million, and 52% pretax annual IRR at $1,600/oz gold.
At $1,600/oz, gold, the economic resource increases from 1.3 million to 1.5 million gold-equivalent oz (geo). The economic resource ore tonnage increases from 133 million tons to 170 million tons (economics are 80% gold and 20% copper).
“We are pleased with the progress of the Copper King project in 2020 and have made several trips to the property last year to advance the project from a permitting, development and community outreach standpoint,” President and CEO Edward Karr said. “We are looking forward to working with Dr. Marc Levier and Mark Jorgensen to advance the Copper King deposit to the PFS level.”
Karr added that the PFS is expected to be a major milestone in moving forward toward production.
“The existence of silver in the Copper King deposit could give further upside to the overall economics and will be analyzed thoroughly in the PFS,” Karr said. “We have a very experienced board assisting in moving the project forward, including Tim Janke on mine engineering and development, Douglas Newby on permitting and The Hon. Ryan Zinke on state of Wyoming relations, permitting, strategy and community outreach.”
In 2017 and 2018, U.S. Gold Corp. conducted geophysical studies at Copper King and drilled additional exploration holes. Several of these holes hit additional mineralization, and it has been shown the deposit has increased to the west. In addition, the Datamine analysis conducted in early 2019 shows the presence of economic-grade silver not previously accounted for the in the PEA economics. Extending the deposit along strike to the southeast will be the focus of future exploration efforts, the company said.
The updated internal analysis can be viewed here.
