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Escalones project

Company > Properties > Escalones

Project Overview

The Escalones copper porphyry project lies 35 km east of El Teniente, one of the world’s largest underground copper mines, and within the renowned Chilean porphyry copper belt that runs north-south in the central Andes Mountains. The project has excellent infrastructure, including road access, electricity, access to seaports, and a gas pipeline that crosses the 70 square km property.

The Escalones deposit was discovered in 1996 through greenfield exploration work by Ralph Fitch, former President and CEO of General Minerals Corporation, and Felipe Malbran, the former Vice President of Exploration, South America.

In 2020, World Copper recognized that the shallow, higher-grade mineralization is significantly oxidized, rendering it mostly acid-soluble and potentially amenable to cost-effective, heap-leach copper production. Redefining the project as a copper oxide deposit significantly enhances its value by lowering costs of capital and operating development options compared to the previously contemplated sulphide flotation project.

Preliminary Economic Assessment 2022

World Copper released a Preliminary Economic Assessment (PEA) report for Escalones, dated March 22, 2022, with an effective date of February 15, 2022.  The Technical Report was prepared by Global Resource Engineering, with contributions from other firms, including Hard Rock Consulting, LLC. Highlights of the study are:
  • $1,499.6 million post-tax NPV8 at $3.60 /lb. life-of-mine (20-year LOM) copper price
  • $1,822.4 million post-tax NPV8 at US$4.00 /lb. life-of-mine copper price
  • First 5-years average annual Copper production of 124.7 Mlb. (56,520 tonnes); LOM average 114.9 Mlb. (52,131 tonnes)
  • First 5-years average C1 (Cash Operating) costs of $1.13 /lb. Cu; LOM average C1 costs $1.19 /lb. Cu
  • First 5-years average annual EBITDA $290.8 million; LOM average annual EBITDA $265.1 million
  • Initial Capital (CAPEX) cost of $438.4 million (from construction decision)
  • Life-of-mine Sustaining Capital of $192.5 million
  • Conventional heap leach, SX-EW processing facilities, targeting 50,000 tonnes of heap leach tonnes placed per day
The exceptional results of the Escalones PEA confirm that Escalones has the potential to be one of the most impressive copper properties in South America. Escalones now joins a peer group of large-scale, study-backed, development-stage assets. Escalones has several attributes that make it attractive for development including robust economics, strong value metrics and the potential of rapid returns for a comparably low capital investment. The results of the PEA, combined with Escalones’ large land package and resource expansion potential, make it an outstanding project. The Preliminary Economic Assessment is considered preliminary in nature and includes Inferred Mineral Resources that are considered too speculative, geologically, to have the economic considerations applied that would allow classification as Mineral Reserves. There is no certainty that the results of the PEA will be realized. All values are reported in US dollars unless otherwise noted.

Mineralization & Geology

Escalones has Inferred resources of 426 million tonnes of 0.367% copper, based on nearly 25,000 metres of drill core from 53 holes.  The 3.45 billion pounds of copper should be amenable to heap leaching with an average recovery of 71%. The mineralization sits within a four square-kilometer area of hydrothermal alteration comprising quartz-sericite, potassic, and calc-silicate alteration assemblages. Coincident copper, gold and silver geochemical anomalies are associated with replacement-style “skarn” mineralization hosted in calcareous sedimentary rocks that flank central porphyritic intrusive rocks with porphyry-style (fracture-fill and disseminated) mineralization. Copper mineralization at Escalones occurs  as the primary sulphides chalcopyrite, bornite, and covellite, which are partially to completely replaced within about 300m of the surface with secondary copper oxides, sulphides, sulphates and carbonates. This replacement has led to higher grades at shallower depths, and, since the mineralization sits within a high-standing ridge, makes it ideal for surface mining.

Mineral Resource Estimate Statement

Hard Rock Consulting, LLC completed an updated resource estimate dated June 25, 2021. Resources are reported within an optimized pit shell and are considered to have a reasonable potential for economic extraction. A 0.13% total Cu cutoff grade was selected for reporting the mineral resource (Tables 2 and 3). The cutoff grade was calculated based on the following assumptions: a long-term copper price of US$3.50/lb Cu, assumed combined operating ore costs of US$6.50/t (process, general and administrative and mining taxes), refining & shipping costs of US$0.25/lb of Cu, metallurgical recoveries of 71% for copper, and a 2% net smelter returns royalty. The metal prices used in the cutoff represent a 15% increase over the three-year historical average as of June 30, 2021. Table 2 contains cost and other parameters used in the cutoff calculation (all dollar amounts in US dollars).
Escalones Resource Estimate (June 25, 2021)
Notes: (1) Mineral resources that are not mineral reserves do not have demonstrated economic viability.  Inferred mineral resources are that part of the mineral resource for which quantity and grade or quality are estimated on the basis of limited geologic evidence and sampling, which is sufficient to imply but not verify grade or quality continuity.  Inferred mineral resources may not be converted to mineral reserves.  It is reasonably expected, though not guaranteed, that the majority of inferred mineral resources could be upgraded to indicated mineral resources with continued exploration.  See “Cautionary Note to United States Investors”. (2) Mineral resources are reported at a 0.13% CuT cutoff.  The cutoff is calculated based on a long-term copper price of US$3.50/lb; assumed combined operating ore costs of US$6.50/t (process, general and administrative and mining taxes); refining & transportation costs of US$0.25/lb of Cu; metallurgical recoveries of 71% for copper and a 2% net smelter returns royalty. (3) Mineral resources are captured within an optimized pit shell and meet the test of reasonable prospects for economic extraction by open pit.  The optimization used the same mining costs of US$2.50/t mined and a 50º pit slope. (4) Rounding may result in apparent differences when summing tonnes, grade and contained metal content.

Soluble Copper Mineralization

Several  programmes of metallurgical testing on Escalones mineralization were completed between 2012 and 2013. Tests focused on the recovery of the copper, gold, silver, molybdenum and gallium by conventional flotation  and a combination of flotation followed by acid and acid-brine leaching of sulphide tailings and oxide scavenger concentrates. While there was no specific programme to determine the extend of acid-soluble copper mineralization over the full range of mineral zones and rock types, a few standard sulfuric acid leach metallurgical tests achieved average copper extraction of 77%, ranging from 66 to 96% from mixed copper oxide-sulfide mineralization (eight composite samples). Recent studies by World Copper focused on the soluble copper mineralization and indicated that most of the upper, higher-grade copper mineralization at Escalones could be amenable to heap leach processing, which would result in lower operating costs as well as significantly lower capital costs. The sulphide copper mineralization is partially to completely replaced and enriched from surface to depths of approximately 300m from surface by secondary copper oxides, sulphates and carbonates, resulting in higher grades at shallower depths.  The base of oxidized copper enrichment is currently defined by a database review of core photos, assays and core logs, and supported by almost 1200 sequential copper leach tests, representing 2040 metres of core, or roughly 16% of all oxidized intervals.  In addition, 55 acid consumption tests were completed. Based on the positive results of the above studies, World Copper contracted Resource Development Inc. of Colorado to conduct bottle-roll leach tests with 38 composite samples from existing pulp samples. Results indicate that copper extractions are strongly associated with ore type and depth. Extraction of oxide samples averaged 82.6%, while mixed (oxide and secondary sulphide) samples averaged 42.2%. Averaged by depth, reasonable extractions are observed from 0-150 meters (>65%), while lower extractions are observed deeper than 150 meters (<40%). Ferric addition increased copper extraction by approximately 3.8% with all ore types.

Exploration - Escalones Expansion Targets

The Escalones deposit remains open to expansion laterally to the south, east and west, with only roughly half of the alteration zone drilled to date.  The  Mancha Amarilla lithocap (“Mancha Amarilla”) extends one kilometre south from the main Escalones deposit. Evidence indicates this southern half of the Escalones alteration system is also deeply oxidized and could contain significant soluble copper mineralization. Geophysical and geochemical anomalies indicate there is also substantial expansion potential to skarn zones on both east and west flanks of the porphyry mineralization.

A geochemical sampling and mapping crew evaluated these targets in late February 2021.  During the sampling programme, 336 samples were collected from the untested Mancha Amarilla lithocap and the East Skarn, which is a large gossanous wedge of mineralized sandstone and porphyry sills. The sampling helped define the most prospective parts of the lithocap and east skarn. Further details can be found in the August 12, 2021 news release.

The western margin of the Mancha Amarilla was tested in 2022 with six drill holes (1652m) along the main ridge.  This small programme indicated the stronger mineralization lies under the steep, rugged west slope, necessitating road construction before it can be adequately drilled. Winter conditions closed the programme before the east skarn could be drilled. Further details are in the September 27, 2022 news release.

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