Categories: Mining Stocks
Topics: Copper Stocks

Gunnison Copper (TSX: GCU)(OTCQB: GCUMF) CEO Craig Hallworth on Advancing Flagship Gunnison Copper Project, Arizona, with Multi-Rig Drilling, DOE Support & Expanding Copper Production

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of the very busy Gunnison Copper (TSX: GCU)(OTCQB: GCUMF) — Mr. Craig Hallworth. Craig, it's great to have you on. How are you today?

Craig Hallworth: Hi, Gerardo. So good to be here, and thank you to all the listeners.

Gerardo Del Real: Well, listen, let me go in order. You've been incredibly busy, setting shareholders and yourself up for what I think is going to be a phenomenal second half.

Obviously, we got a pullback happening in the precious metals space that I think is healthy. But copper, interestingly enough, seems to not be correlating with the precious metals anymore. 

So despite a stronger dollar, and despite geopolitical turbulence, you have copper, on the spot price, sitting at $6.08/lb, in the green, and looking good, which is the perfect backdrop for Gunnison to be eliminating debt through cash settlement, preventing the issuance of more shares and further dilution, and obviously a perfect time to achieve a key milestone under the U.S. Department of Energy 48C program.

So let's take those in order. You eliminated the convertible debt through a cash settlement. Can you speak to that a bit?

Craig Hallworth: Yes, Gerardo, I'm really happy with that deal. I think a lot of listeners knew that we had some convertible debt. This was sort of the last holdover, if you will, from years past with the predecessor company, with the in-situ mine that didn't work out. This is sort of that last final bit that we needed to clean up on the balance sheet.

And that convertible was coming due in September of this year. Look, if we had let that convert into shares, that was going to add something like 29 million new shares to the market. Nobody wants to see that. Nobody wants to see 29 million new shares. I think what they wanted to see was a deal where we were able to neutralize that at a good value.

Working closely with our long-term partner, Greenstone — this is the company that supported us for many, many years, a great company — and they were the holders of the convertibles. So working closely with them, we were able to come to a deal where we settled those debentures for a 54% discount versus our recent equity raise price. We raised equity at C$0.42 a little while back. It was a very good deal. It was a bought deal with our bank, Canaccord, out of Toronto. And we were able to settle the debentures for something like C$0.20 per share.

So really, really happy with that. A 54% discount to the raise created something like US$5 million in shareholder value, and I'm just really over the moon about it.

Gerardo Del Real: Great work. You've been executing all year long. Let's talk about the Department of Energy 48C program. I just got back from the Rule Symposium, and one of the key talking points there during the week was that, for all its great and not-so-great policy actions that this administration has taken, they've been incredible on critical metals permitting and, however you feel about it, injecting capital directly into critical metals companies.

So obviously having the Department of Energy 48C program in play for Gunnison is a big, big deal. Can you speak to that a bit?

Craig Hallworth: Well, first of all, I'm extremely grateful to the Department of Energy. This is an organization within the U.S. government that's got a lot of really, really smart people working there, and they're helping a lot of mining companies domestically, companies like Gunnison Copper.

We went to them in 2024 and said we're going to restart the Johnson Camp Mine. It's going to make copper in this country. We're not going to send concentrates overseas. We're going to make the finished copper right here, and we're going to supply American companies with the copper to make other products that people need.

So we received an allocation of US$13.9 million in 48C tax credits. I think what this latest announcement from us shows — which, by the way, announced that we submitted all of the certification requirements to the Department of Energy — is that we can deliver. We can make commitments to the government, and we can fulfill them.

In this case, we committed to permit, construct, ramp up, and bring the Johnson Camp Mine into production by the end of 2025.

And guess what, Gerardo? We did. We had our first production in August 2025 from our run-of-mine circuit, and we had our first production from the Nuton Technology Circuit in December 2025. So not only did we do what we said we were going to do in terms of our timeline and our commitment, but we did it while paying close attention to our people. We had no lost-time accidents, and I'm really, really proud of that safety record that we demonstrated during this lightning-fast construction and ramp-up.

Gerardo Del Real: Look, brilliant execution all the way around. You've done great, but you know how it goes. The $64,000 question is, what comes next, right?

Craig Hallworth: We're working very, very hard here. I love the way, at the beginning of this call, you acknowledged our sense of urgency. That's what I keep telling people because we're not sleeping on the job here. We're not sleeping at our post. We are actively advancing the Gunnison project as quickly as we can.

The main thing we're doing right now is our 2026 drill program. This was the use of funds. If investors ask, ‘Why did they do the bought deal? Why did they raise that US$24 million a month or so ago?’ it was to put it all into the ground, primarily through this drill program.

We've got two drills going right now. I was at the site a few weeks ago. I inspected the drills. All the employees know about it. Everyone's fired up about it. It's very, very exciting.

We're going to ramp that up to six drills, triple the current drilling capacity, as soon as we complete construction of a core processing facility. That should be done in the next two months or so.

So when we get up to six drills, we're going to be doing the metallurgical testing that everyone wants to see. We're doing things like resource expansion. I've challenged the team. I've said, ‘Look, I want to see an additional 1.2 billion pounds of copper added to this project from this drill program.’

And what my people told me was, ‘Yes, we believe we can do that. We believe, with what we know today, with the targets that we have based on geophysics, with additional satellite deposit potential, and with expansion of the main pit potential, we believe we can add 1.2 billion or more pounds of copper to the project.’

So Gerardo, if you take a look at our most recent PEA from March 2026, we had 3.2 billion pounds of copper over a 21-year mine life. If we're able to add 1.2 billion pounds, that'll bring us up to 4.4 billion.

People say, ‘What's the significance of that? Why do you need it to be 4.4 billion pounds?’

Well, the reason is I've challenged the team to increase the throughput. Right now it's 175 million pounds a year. I want to see 220 million pounds a year.

And what's the significance of 220 million pounds a year? That's 100,000 metric tonnes of copper per year. And 100,000 tonnes times 20 years — you know what that makes this project, Gerardo? It makes it the scale of project that the big mining companies are interested in.

We're talking to mid-tiers today, great companies, and they're very interested in the project. But if we can get this up to 100,000 metric tonnes a year, that's sort of a magical threshold where we can enter a whole new realm of big, big companies being interested in us.

Gerardo Del Real: I love the urgency. I love how well you've executed. I think your timing is excellent. And look, I think this time next year we'll likely look back at the share price where it's at today and the market cap where it is today. If you keep executing the way you have, we're going to be looking back and laughing at how cheap things were.

Craig, always a pleasure to have you on. Looking forward to having you back. I suspect there will not be a shortage of news moving forward.

Craig Hallworth: Thank you so much, Gerardo. Great to speak with you.

Gerardo Del Real: Alright, take care now, cheers.

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The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the conclusions reached in the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. For additional information on the Gunnison Project, including the PEA and mineral resource estimate, please refer to the Company's technical report entitled "Gunnison Project NI 43-101 Technical Report Preliminary Economic Assessment" available on SEDAR+ at www.sedarplus.ca.

Dr. Stephen Twyerould, Fellow of AUSIMM, Director of the Company is a Qualified Person as defined by NI 43-101. Dr. Twyerould has reviewed and is responsible for the technical information contained in this report.

Certain statements contained in this release constitute forward-looking information within the meaning of applicable Canadian securities laws. Such forward-looking statements relate to the intention to deploy the Nuton® technology at the Johnson Camp mine and future production therefrom; the continued funding of the stage 2 work program by Nuton; the details and expected results of the stage two work program; future production and production capacity from the Company's mineral projects; the results of the preliminary economic assessment on the Gunnison Project; expected future production; details regarding plans for a prefeasibility study; and the exploration and development of the Company's mineral projects.

In certain cases, forward-looking information can be identified by the use of words such as "plans", "expects" or "does not expect", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "occur" or "be achieved" suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information contained in this report is based on certain factors and assumptions regarding, among other things,Nuton will continue to fund the stage 2 work program, the availability of financing to continue as a going concern and implement the Company's operational plans, the estimation of mineral resources, the realization of resource and reserve estimates, copper and other metal prices, the timing and amount of future development expenditures, the estimation of initial and sustaining capital requirements, the estimation of labour and operating costs (including the price of acid), the availability of labour, material and acid supply, receipt of and compliance with necessary regulatory approvals and permits, the estimation of insurance coverage, and assumptions with respect to currency fluctuations, environmental risks, title disputes or claims, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks related to the Company not obtaining adequate financing to continue operations, Nuton failing to continue to fund the stage 2 work program, the breach of debt covenants, risks inherent in the construction and operation of mineral deposits, including risks relating to changes in project parameters as plans continue to be redefined including the possibility that mining operations may not be sustained at the Gunnison Copper Project, risks related to the delay in approval of work plans, variations in mineral resources and reserves, grade or recovery rates, risks relating to the ability to access infrastructure, risks relating to changes in copper and other commodity prices and the worldwide demand for and supply of copper and related products, risks related to increased competition in the market for copper and related products, risks related to current global financial conditions, risks related to current global financial conditions on the Company's business, uncertainties inherent in the estimation of mineral resources, access and supply risks, risks related to the ability to access acid supply on commercially reasonable terms, reliance on key personnel, operational risks inherent in the conduct of mining activities, including the risk of accidents, labour disputes, increases in capital and operating costs and the risk of delays or increased costs that might be encountered during the construction or mining process, regulatory risks including the risk that permits may not be obtained in a timely fashion or at all, financing, capitalization and liquidity risks, risks related to disputes concerning property titles and interests, environmental risks and the additional risks identified in the "Risk Factors" section of the Company's reports and filings with applicable Canadian securities regulators.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this report. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information.

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