General Base Metals
Kutcho Copper (TSX-V: KC)(OTC: KCCFF) CEO Vince Sorace on Pivot to Open Pit Mining Scenario for Upcoming Feasibility Study on 1.1 Billion Pound Copper-Equivalent Kutcho Project, British Columbia, Canada
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of Kutcho Copper — Mr. Vince Sorace. Vince, how are you today?
Vince Sorace: Doing great, Gerardo. How are you?
Gerardo Del Real: I am well. Thank you for coming on. Congrats are in order! You just announced a new high-grade mineral resource, which represents 1.1 billion pounds of copper equivalent.
This, of course, works into the feasibility study, which we all expect here within the next several weeks in October. Congratulations, first off. But let's talk about the advancement and just what motivated, frankly, a pivot to focus on open pit mining, right, which I think is intelligent in multiple aspects.
One, you're increasing the tonnage, and, two, you're also making it to where there's a smaller environmental footprint on the project, which, of course, is important. Can you speak to both of those?
Vince Sorace: Yeah, it's a big pivot, and it was something that we always had in mind. And it's an obvious one. Whenever you're able to revert your mining methodology to an open pit — you've got significantly lower mining costs.
And it was something we wanted to make sure that we were able to do from a number of different fronts. And that would include the permitting side… our relationships with our First Nations… and we wanted to make sure that those would all be achievable. And when we crossed those hurdles, we went full speed on it. And we made that pivot back in March.
And we have to do a little bit more work around that when we made the pivot. So that's why the slight delay with respect to getting the feasibility study out… but it'll be well worth it. Stuff like this has a direct impact on the economics of a project. Again, when you're reducing mining costs significantly — and the Main lens is a significant portion of the deposit — so that's going to be a big benefit to the project from an economic perspective.
It simplifies the mining method with respect to the project as well… so de-risks that somewhat. And another key element, too, is that with this — and we mentioned in our press release — that we're going to be increasing throughput. The pre-feasibility study contemplated 2,500 tonnes per day while we're able to now look at a 4,500 tonne per day scenario, which is also significant because with that comes economies-of-scale with respect to things like operating costs.
So there's a lot of benefits that reverberate through the project with this pivot to open pit. And then, again, with those lowered costs, the cutoff grade goes down and we have an expanded resource. With our M&I now sitting at just under 23 million tonnes — which is significant for a VMS deposit, I would argue — makes us one of the largest VMSs out there right now.
And let's also note that that 1.1 billion pounds of copper [equivalent] we're talking about — that's in M&I. That does not include what we have sitting in our Inferred category, as well, which exceeds 10 million tonnes that we'll obviously be addressing. And we think there's lots of upside opportunity left there as well, especially in the Sumac lens.
Gerardo Del Real: That main deposit increase, it's a 21% increase in tonnage in, like you mentioned, the Measured and Indicated categories. You also mentioned the 1.1 billion pounds of copper equivalent. Let's break that down for the skeptics out there, right, and just get into exactly what it is.
It's 765 million pounds of copper, 1.1 billion pounds of zinc, 288,000 ounces of gold, and 20.6 million ounces of contained silver.
That is a lot of metal for a company that has a major partner, that has a market cap of under C$70 million, and has worked, I’ve got to say, brilliantly over the past several years to de-risk the project to the point where it's now at the feasibility stage here come the end of October, I understand, correct, Vince?
Vince Sorace: Correct. We're tracking very well. This press release outlines a lot of the major elements of the feasibility study that we've either accomplished or almost accomplished. So yeah, I think we've got very good visibility now to the completion of this study. And that's going to be a major milestone from a number of perspectives for Kutcho Copper.
And to your point, we're at a C$70 million market cap. I would argue that we are still exceptionally cheap with respect to a copper project that's got a very clear path to feasibility study, permitting, and what I believe will be put into production at some point in the future.
Gerardo Del Real: I’ve got to believe it's a project that's going to look attractive to someone looking to replenish the production or enhance its production profile. And so it'll be interesting for me to watch you entertain offers — if you're not already entertaining offers — to take this asset out given the base metal environment that we're in right now, right?
Vince Sorace: I think Kutcho is going to lend itself here. And again, I think the key to this will be completion of the feasibility study as it's a major de-risk point with respect to the project. I think there is going to be lots of opportunities in front of us for things like strategic investments.
And I do believe there will be — and there has been — a lot of corporate eyes on this story because, yeah, I believe that there's not a lot of good assets out there in the copper space. And there are not a lot of assets out there… very, very few… at a feasibility study level that I think will fill as much promise as Kutcho does. So I think there's lots of opportunity for a number of things to happen, yes.
Gerardo Del Real: And the last thing I have to mention — because I did mention the 765 million pounds of copper, the zinc, the gold, and the silver — listen, that copper, it's at 1.52%, the zinc is at 2.18%, right? And so important to note the high-grade nature of the copper aspect of the resource. Again, this is just in the main deposit.
Vince Sorace: It's very important. And there'll be a couple of things to pay attention to in the feasibility study. Obviously, the project economics. But I think you're going to see, obviously, the leverage to current copper prices and the value of the project from that perspective.
But also I believe — and this will be, again, seen in the feasibility study — that sensitivity with these types of grades to the downside on a project like this is that it will also still function at lower copper prices. So it's got that robustness to it as well, which, again, that comes with grade… and a lot of projects out there cannot facilitate that, if you will.
Gerardo Del Real: Excellent work, Vince. I suspect you and I will be chatting multiple times here over the next several weeks. Thanks again for taking the time today. Appreciate it!
Vince Sorace: Thank you, Gerardo.Click here to see more from Kutcho Copper Corp.