Mining

ASX:NWC

New World Resources sees promising low-cost future for Antler copper project after PFS findings

By Imelda Cotton - July 17, 2024

A pre-feasibility study (PFS) for its high-grade Antler copper deposit in the US has demonstrated a technically and financially robust development for owner New World Resources (ASX: NWC).

The operation will produce copper, zinc, lead, silver and gold in three separate high-grade, low impurity concentrates for further refinement at off-site smelters either in the US or overseas.

The company is developing Antler as an underground mine in an effort to minimise the project’s surface footprint and environmental impact.

Underground operation

The study evaluated the development of a 1.2 million tonnes per annum underground mining operation with a 12.2-year life, along with the construction of a processing plant, pastefill plant, a fully-lined dry-stack tailings storage facility and associated infrastructure.

Inventory for the project is based on a resource of 13.6Mt grading 1.6% copper, 3.7% zinc, 0.6% lead, 24.5 grams per tonne silver and 0.26g/t gold for 341,100t of copper-equivalent metal over the life of the mine.

New World has also determined a maiden probable ore reserve estimate of 11Mt at 1.6% copper, 3.7% zinc, 0.6% lead, 25.9g/t silver and 0.3g/t gold.

Modest cost requirements

The Antler development is expected to require modest pre-production capital expenditure of $442 million (including a contingency of $46m) in return for an “impressive” life-of-mine revenue of $4.61 billion and post-tax free cash flow of $1.43b.

C1 cash costs in the areas of mining and processing, mine-level administration, treatment and refining charges, transport and royalties have been estimated at $0.18 per pound of copper (after co-product credits), making the project one of the world’s lowest-cost copper producers.

Average annual post-tax free cash flow is estimated to be $168m during steady-state operations in the second year.

The study predicts a pre-tax net present value of $929m and a 34.3% internal rate of return.

Post-tax, these figures reduce to $726m and 30.3% respectively.

Quality asset

Managing director Mike Haynes said the findings place the company on track to become a significant copper producer.

“These strong results are expected to underpin a project which will be extremely well-placed to secure finance on attractive terms, particularly given the strong outlook for copper over the coming decade and the paucity of new development projects in the global supply pipeline,” he said.

“Our advisers have indicated that Antler should be able to support 65% debt funding, which reflects the quality and grade of the asset, as well as its location in a Tier-1 jurisdiction.”

“We will use that guidance to seek indicative terms for finance.”

DFS underway

Mr Haynes said the company had commenced a definitive feasibility study (DFS) to further de-risk the project’s technical and financial aspects.

“The robust outcomes of the PFS have allowed our board to approve the commencement of a DFS, which will dovetail with the mine permitting process,” he said.

“Key approvals are expected to be received from mid-2025, which will place us on an overall trajectory towards completing the study and advancing towards a final investment decision by late 2025, paving the way for construction of the Antler project in 2026.”

High-grade VMS deposit

The Antler deposit is a high-grade, polymetallic, volcanogenic massive sulphide (VMS) copper-zinc-lead-silver-gold discovery acquired by New World in 2020.

Since then, the company has drilled more than 150 holes for 60,000 metres, declared two mineral resource estimates and completed two scoping studies for the project.

Copper is the most valuable metal present, but significant revenue is also expected to be derived from zinc, silver, gold and lead.