Copper Jr. Looks for Early Production From Run-of-Mine Material

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World Copper Ltd. (WCU:TSX.V; WCUFF:OTCQX; 7LY0:FRA) announced a grade-confirmation program to add value to its Zonia copper-oxide project in Arizona by testing 7.1 million tons (containing up to 55 million pounds of copper) of run-of-mine material placed on leach pads at the site in the 1970s.

"It presents a significant opportunity to add value to the project and could potentially become an additional early revenue source, having a positive effect on Zonia’s future economics and NPV (net present value)," the company said in a release. "Historical documents (a mine production report from 1979 and a project evaluation report from 1982) estimated remnant copper content of the pads ranging from 26.6 million pounds to 55 million pounds, with a grades ranging from 0.4% to 0.6% copper (Cu)."

The grade conformation program will include surface studies, drilling, and metallurgical testing to confirm the acid-soluble copper grade of this material. It will involve up to 1,100 meters of reverse circulation drilling, World Copper said. It will be followed by metallurgical testing and additional in-fill drilling if required.

"Confirmation of existing copper metal sitting on our leach pads is a real opportunity to generate pre-production revenue," said World Copper Chief Executive Officer Gord Neal. "The grade-confirmation program is a crucial first step towards creating additional shareholder value through potential upfront cash flow."

Re-processing historical material often presents very attractive economics, the company noted. At Zonia, this material is readily available and could be processed at lower cost than the bedrock resource. Following the completion of the grade-confirmation program and securing the necessary permits, World Copper said it plans to focus on designing the "most optimal solution for reprocessing the material either through a small, portable SX-EW plant or by crystallizing copper sulfate, a marketable product requiring less upfront investment."

This production could before full-scale production from Zonia's main mine plan starts. The leach pads are located on private patented land and are easily accessible, WCU said.

US Becomes the Priority

In addition to Zonia, World Copper also has its Escalones Project in Chile. In May, management announced a decision to prioritize its U.S.-based assets, concentrating on advancing Zonia and targeting a production start there in three to five years. It is executing its plan for moving forward, for taking Zonia to a feasibility study then to construction.

Last month, the company revealed the potential for reprocessing mineralized material from historical mine operations at Zonia. Located on heap leach pads from the 1970s, the material was originally treated to recover soluble copper.

Recent reviews by the company's newly formed Technical Advisory Committee indicate that significant quantities of copper remain unrecovered from the site. Historical reports estimate that between 65 million and 96 million pounds of copper could still be present in the heap leach pads and in-situ leach areas.

"The prospect of reprocessing historically mined mineralized material would add more value and provide additional upside to the Zonia Project, and it is a unique potential value opportunity," said Neal has said.

He emphasized that early production opportunities could significantly enhance the project's economics, increasing its net present value and reducing financial risks.

The Zonia Project itself has been significantly de-risked with over 50,000 meters of drilling completed to date and a comprehensive Preliminary Economic Assessment (PEA) indicating potential for low-cost open pit mining and heap leach processing. The most recent resource estimates highlight substantial copper resources, both indicated and inferred, totaling over 1 billion pounds of copper.

On July 23, Fundamental Research Corp. noted the company was up 23.8% week-over-week and was one of the top performers it was following.

The Catalyst: 'A Tightening Market'

A recent sharp correction in copper prices "appears to have largely run its course, positioning current levels as a compelling medium-term entry point for investors," Investing.com reported Monday, attributing analysts at USB Global Research.

"Although macroeconomic conditions remain challenging, particularly with weaker-than-expected demand from China and Europe, the long-term fundamentals for copper remain robust," the report said.

The market witnessed a correction in 2024, with prices dropping about 20% from their second-quarter highs, erasing nearly 90% of year-to-date gains, UBS said. This downturn was primarily fueled by speculative unwinding rather than fundamental weakness. 

"UBS expects a tightening market towards late 2024 and into 2025, driven by limited supply growth and the eventual rebound in demand," analysts said.

According to Credendo, demand for copper could double by 2035, as EVs use more than three times as much of it as gas-burning cars. New copper production — and investment in exploration — will be needed to fuel the supply of those vehicles in the long term, analysts have said.

The hunt for copper "has been accelerating, as companies involved in all parts of the copper supply chain realize the structural supply deficit facing the copper market," wrote Rick Mills, author of the newsletter Ahead of the Herd.

"They understand the need to find sources — existing mines, expansions, brownfield projects, greenfield projects, etc. — and are making deals to acquire the base metal, which is not only essential to electrification and decarbonization but industry in general," Mills wrote.

Copper climbed above US$10,000 a ton in May, based on predictions of tighter supplies and rising consumption for electric vehicles (EVs) and power grids in the transition to green energy. It was US$8,160 per ton on Monday. 

Michael Ballanger of GGM Advisory Inc. wrote for Streetwise Reports last month that "the technical picture for copper could not get any more bullish. You have a 'neutral' RSI down from 'overbought' while just entering a bullish MACD crossover and 'buy signal' along with a bullish money flow indicator."

Ownership and Share Structure

Wealth Minerals Ltd. (WML:TSX.V; WMLLF:OTCQB) owns about 10.44% of World Copper, according to Reuters.

About 18.64% is owned by management and insiders, including Director Robert Kopple with 15.6% and Board Chairman Hendrik van Alphen with 1.08%. CEO Neal holds about 0.87%, Reuters said. The rest is retail.

As for share structure, the company has 196.3 million outstanding shares and 110.66 million free float traded shares, according to Reuters. 

It has a market cap of CA$19.46 million. Its 52-week trading range is CA$0.06–0.35 per share.