Can you provide updates from 2024?

Over the last six to 12 months, we have moved forward with our partnership with Nuton LLC (a Rio Tinto Venture). In May 2024, we progressed to Stage 2 of our option agreement, which means we are working with Nuton to restart the Johnson Camp mine (JCM) for sulfide leaching using their technologies. Construction has begun, and we expect it to be completed by the end of 2024. We aim to start producing copper cathode from the open pit mine in the first half of 2025. Can you talk about the existing Burro pit at the JCM?

The Burro pit is a historic oxide copper open pit that operated as a heap leach operation. The previous owners mined until 2010, at which point they intersected the sulfide below the oxide. Mining operations halted then, but the advancements in sulfide leaching technology have been significant in the last few years. Nuton has over 20 years of research and development in this area. Our goal now is to restart mining, creating two separate piles: a sulfide-rich pile for Nuton’s technologies and a more oxide-dominant pile for standard heap leaching. All material will go through our processing plant to produce copper. How does the Nuton technology work within the deposit?

Traditionally, treating sulfide requires crushing, grinding, and producing a concentrate, which is energy-intensive and consumes a lot of water. Sulfide leaching uses around 60% less water per pound of copper, reduces greenhouse gas emissions, and lowers capital costs. The technology involves bio-oxidation and uses certain catalysts and additives that improve copper recovery from sulfide minerals. Moreover, it minimizes risks associated with tailings and acid mine drainage since we do not generate traditional tailings. This technology could also render currently uneconomic projects viable, especially in arid regions where water is limited.

At Johnson Camp we believe there are sulfide resources extending to the southeast and potentially deeper. Historical workings in the area produced around 3-4% copper. Stage 2 focuses on sulfide in and below the existing Burro pit over a five-year period. We conducted a preliminary economic assessment a few years back, which suggested a 20-year mine life, excluding additional sulfides if discovered through further exploration. The rising copper prices make this exploration worthwhile.

We expect to produce approximately 25 million lb/y of copper from the plant. Our aim is to keep the plant fully operational during the initial five-year period and maintain that production throughout the total 20-year mine life. What change will the option agreement with Nuton catalyze?

The option agreement during stage two stipulates that Nuton will fund construction and development activities. This is not a loan or equity investment, meaning we do not incur debt or dilute the company’s equity. The revenue from the copper production, including from oxides, will first cover Nuton’s initial investment. Once that investment is recouped, we will receive 100% of the operating profits. Nuton has the right to form a joint venture to mine the remaining 18 years of mine life after the program, where we will maintain a 51% interest. How do you plan to approach the sulfide resource beneath Gunnison?

While our immediate focus is on Johnson Camp, Gunnison presents a significant opportunity. Initially, we planned it as an in-situ leaching project but encountered technical challenges. We believe we found solutions to those challenges and are currently permitted for hydraulic fracking at a commercial scale to improve production. However, when we consider the sulfide resource beneath Gunnison, it makes sense to look at alternatives like open-pit mining that could access both sulfides and oxides. What catalysts are on the horizon for Gunnison toward the end of 2024 and into 2025?

The primary catalysts for the remainder of the year will revolve around advancing construction at our Johnson Camp mine. The leach pad construction has begun, and we will be sharing updates as the project progresses. We anticipate mobilizing our mining fleet and starting mining later this year, followed by stacking on the leach pad. In H1 2025, we will focus on ramping up copper production. We are also considering further studies on the potential for a large open pit at Gunnison.