ASCU controls the Cactus East, Cactus West, Parks/Salyer and now the MainSpring property. (Source: ASCU)
Advanced leaching technology could unlock stranded copper
Last year was an exciting year for the Arizona Sonoran Copper Co. (ASCU), an emerging copper developer based in Casa Grande, Arizona. In February 2023, the company optioned an additional 523 acres of private land contiguous to Parks/Salyer known as MainSpring, for a total cash consideration of $14 million. Then they hired Ausenco to lead the team producing its prefeasibility study (PFS) on the Cactus project. The company expects to have that completed in Q1 2024.
ASCU has also demonstrated the ability to obtain major permits from the regulators with the support from community. The company received both a Mined Land Reclamation Permit and the Industrial Air Permit in early 2023. The framework to receive the remaining permits will be guided by the pending PFS and a future construction decision. The project benefits from water rights to a permitted water source, as well as a streamlined state and local municipality permitting process. Working with a brownfields project on private land avoids the federal permitting process.
Based on the metallurgical test work performed so far, ASCU is targeting a step up from the Preliminary Economic Assessment’s (PEA) 28,000 tons per year of copper to 45-50,000 tons per year of copper and extending the mine life well beyond the 18 years previously outlined.
More recently, the company announced an option for a joint venture with Nuton, LLC, a subsidiary of Rio Tinto that has a promising method for enhancing the leaching process. If Nuton can show that its technology can improve the net present value (NPV) of the Cactus project above a certain threshold, it could buy up to 40% of the Cactus project for $33 million.
“The company continues to deliver on its key objectives,” said George Ogilvie, CEO, ASCU. “Ongoing work programs include our advanced metallurgical programs, final engineering, mine planning and site characterizations as we progress towards our PFS. Our drilling also continues, both infill and exploration.” All this work is preparing the company for future technical studies and an eventual decision to move into a construction and development phase.
The Nuton Option
During mid-December, ASCU entered into an option-to-joint-venture agreement with Nuton to establish a strategic alliance for deployment of Nuton’s leaching technologies at its Cactus mine and the Parks/Salyer project, which are collectively known as the Cactus project.
“We welcome the expertise and financial support as we expand testing of Nuton’s heap leaching technologies, while concurrently advancing ASCU’s projects,” Ogilvie said. “Nuton’s column test results have demonstrated continued improvements in extraction rates from both the primary and enriched mineral resources, resulting in potentially more efficient operations. We look forward to advancing into Phase 2 testing, which includes an expanded understanding of the Nuton technologies’ economic benefits within a fully integrated PFS, anticipated by the end of 2024.
ASCU granted Nuton the option-to-joint-venture for $33 million. Nuton could acquire 35%-40% of the Cactus project with a further payment based on 35-40% of the NPV, and using a multiple of 0.65x. Nuton will pay $10 million to ASCU at signing of the option agreement; ASCU can draw up to $11 million in the form of a pre-payment toward the Option Exercise Price; and Nuton will make up to $12 million available to ASCU for funding costs associated with continued Nuton test work required to produce the Integrated Nuton Case (INC) PFS.
“Successful deployment of Nuton Technologies at Cactus and Park/Salyer has the potential to materially enhance the economic and environmental performance of the projects,” said Adam Burley, CEO of Nuton.
Nuton said its technologies can unlock copper from sulphide resources, copper bearing waste and tailings, and achieve higher copper recoveries on oxide and transitional material, which could significantly increase copper production. One of the key differentiators of its technology, according to Nuton, is the potential to deliver leading environmental performance, including more efficient water usage, lower carbon emissions, and the ability to reclaim mine sites by reprocessing mine waste.
Nuton’s heap leaching technology would allow ASCU to access currently stranded primary mineral resources while also incrementally improving the copper extraction rates from the enriched material. Nuton believes its flowsheet could be easily integrated into the planned Cactus heap leach and solvent extraction/electrowinning (SX/EW) flowsheet.
“The proposed heap leach and SX/EW flowsheet using Nuton is intended to build upon the strength of our standalone base case, using the same infrastructure,” Ogilvie said. “Nuton has indicated the potential to significantly increase copper cathode output from our current 45,000 to 50,000 mt/y target which could materially enhance project economics.” The two companies have outlined a work program for the Nuton Case to commence in Q1 2024, targeting delivery of the INC PFS, by December 31, 2024.
For Nuton to acquire its stake in the Cactus project, it must demonstrate that the net present value (NPV) of the Cactus project after applying the Nuton technologies is at least 1.39 times the NPV of the Cactus Project without applying it. If the MainSpring property, which is currently the subject of exploration efforts, becomes material to ASCU and incorporated into its PFS, then Nuton would have to show at least 1.20 times the NPV for the Cactus project to achieve the option.
The current mineral resource (MRE) estimate for the Cactus project positions it as the third largest independent copper project in the USA. (Source: ASCU)
Lab Results Look Promising
The metallurgical results from the Nuton Phase 1 column leach program from the Cactus project indicate that Nuton’s technologies would enhance recovery rates.
“We are encouraged by the extraction rates resulting from our primary and secondary sulphides using the Nuton technologies,” Ogilvie said.
The Phase 1 scope included column testing of the Cactus sulphides, primary and enriched, using the proprietary Nuton additives within a traditional heap leach and SX/EW flowsheet. Testing included a variety of conditions, including operating temperatures and additive schemes. Nuton and ASCU are currently planning a Phase 2 column leach program. Phase 2 would be designed to test and/or mitigate opportunities and threats identified under the Phase 1 test program.
Advancing the PFS
The PFS is being led by Ausenco and a team of consultants comprised of Samuel Engineering, AGP Mining Consultants, Stantec, MineFill Services, Clear Creek Associates and Call & Nicholas Inc. The company and its consultants are scoping the oxide and enriched material from Cactus and Parks/Salyer mineral resource estimates for a 45-50,000 mt/y heap leach operation with an onsite SX/EW plant to produce LME grade A copper cathode. Currently, ASCU’s copper resource contains 5.17 billion lb of indicated and 2.21billion lb of inferred resources, which would be the third largest independent copper deposit within the USA.
As of September 2023, the process design criteria and sizing of the SX/EW plant for the PFS was complete. The engineers were assessing long-lead components, equipment specifications and requirements. Underground and open pit mining methods, heap leach and associated infrastructure designs were being reviewed and optimized to ensure an economic and practical approach to mining. Geotechnical and hydrological work was nearing completion with final assessments to be based on ongoing engineering.
ASCU has completed two years of metallurgical testing to the PFS level at Parks/Salyer and Cactus. The company reported that metallurgical column leach testing and hydrodynamic testing supports multi lift leach pads when crushed to a top size of minus 1-in. (25 mm). Depending on the deposit, enriched material recoveries range from 80%-76% and the oxides recoveries range from 92%-88%.
Prior to the Nuton option announcement, ASCU released preliminary extraction rates of 61%-82% for primary sulphide material from Stage 1 Nuton column testing after completing 50% of the 300-day cycle under the testing program. Extraction rates indicate the potential to achieve an optimized 80% life of mine extraction rate for primary sulphides.
