Faraday Copper Announces PEA for Copper Creek with NPV US$713M and 4.2 Billion Pounds of Measured and Indicated Copper Mineral Resources
NEWS RELEASE May 3, 2023
Faraday Copper Announces PEA for Copper Creek with
NPV US$713M and 4.2 Billion Pounds
of Measured and Indicated Copper Mineral Resources
May 3, 2023 – Vancouver, British Columbia – Faraday Copper C orp. (“Faraday” or the “ Company”)
(TSX:FDY) (OTCQX:CPPKF) is pleased to announce the results from a Preliminary Economic Assessment
(“PEA”) and an updated Mineral Resource Estimate (“MRE”) for its Copper Creek Project, located in Arizona,
U.S. (“Copper Creek”). The PEA provides an economically viable base case for the development of Copper
Creek.
All financial results are in U.S. dollars unless otherwise stated. The Company will hold a conference call
and webcast on May 4, 2023 at 4:30pm ET to discuss the results of the PEA and MRE. Details are provided
below.
Paul Harbidge, President and CEO, commented, “In the twenty months since restarting technical activities
at Copper Creek , we have delivered an MRE with 4.2 billion pounds of copper in the Measured and
Indicated category, an economically robust PEA and a pipeline of exploration targets. The PEA provides
an excellent basis for the future development of Copper Creek and is the beginning of the Faraday story .
The projected low initial capital and upfront open pit mine unlocks a large underground operation, for a
combined mine life of more than 30 years . The project is expected to grow over time as the property is
endowed with numerous untested exploration targets. Importantly, the results from our ongoing 10,000-
metre drill program, which are not incorporated in the current studies, are anticipated to contribute to this
growth in the future. We are planning a further 20,000-metre drill program to commence in the fourth quarter
of this year as we continue to advance the project and unlock value for our stakeholders.”
Highlights of the Copper Creek PEA*
Attractive economics: Post-tax Net Present Value (“NPV”) (7%) of $713 million and Internal Rate
of Return (“IRR”) of 16% (Table 1) and significant upside to higher metal prices (Table 4).
Strong standalone open pit economics: Standalone open pit operation supports a pre-tax NPV
(7%) of $337 million (Table 2).
Robust project: Open pit mining provides a rapid payback on initial capital of four years and fully
funds development of a bulk underground mine for a combined total mine life of 32 years (Table 1).
Long life p roduction profile: Average anticipated payable production during active mining i of
51,100 copper equivalent (“CuEq”)ii tonnes per year (“tpa”), with peak production of 82,100 tonnes
CuEqii in Year 2. Generating 3.4 billion pounds (“lbs”) payable CuEqii metal over the anticipated life
of mine (3.2 billion lbs copper, 45.1 million lbs molybdenum, and 9 .7 million troy ounces (“oz ”)
silver) (Table 3, Figure 2).
Low initial capital investment: $798 million, with a construction period of two years (Table 1).
* The metrics presented in this news release are based on a PEA that includes an economic analysis of the potential viability of
Mineral Resources. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. This PEA is
preliminary in nature, includes Inferred Mineral Resources that are considered too speculative geologically t o have the economic
considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty the PEA will
be realized. See “Qualified Person and NI 43-101” below. For reference i, ii, and iii, please refer to endnotes at the end of the document.
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Competitive operating c ost profile : Average life-of-mine (“LOM”) production cash costs iii of
$1.67/lb copper and all-in sustaining costsiii (“AISC”) of $1.85/lb copper (Table 3).
Favourable strip ratio: Average open pit strip ratio of 1:1.2 due to the nature of the near -surface
breccia mineralization that allows sequencing of high-grade production.
High metallurgical recoveries: Over 94% average copper recovery from sulphide material,
producing high-quality clean concentrates.
Enhanced environmental, social, and governance (“ESG”) practices : Dry stack tailings to
reduce water requirements and environmental footprint as well as utilization of renewable solar
power to reduce emissions.
Updated Mineral Resource Estimate: An updated MRE is the basis for the PEA. Measured and
Indicated resources are 421.9 million tonnes (“Mt”) at an average grade of 0.45% copper for a
contained 4.2 billion pounds of copper.
Exploration upside: The mineral resource remains open at depth and laterally, as highlighted by
the intersection of massive sulphides beneath the Copper Prince breccia (see news release dated
January 17, 2023). In addition, there are over 400 breccia occurrences mapped at surface, 35 drill-
tested and 17 included in this MRE, as well as additional porphyry potential.
Zach Allwright, VP Projects and Evaluations , stated, “The outcome of the PEA demonstrates the potential
for Copper Creek to become a significant source of U.S. domestic copper production. The study is
underpinned by empirical data, acquired through extensive geological and geotechnical assessments,
comprehensive metallurgical test work, first principles costing and diligent schedule optimization. This base
case forms a foundation on which the Company can continue to add value through resource expansion,
new discoveries on the property, the potential to add a gold by-product and various opportunities to increase
the production capacity.”
Conference Call and Webcast
Investors, media and the public are invited to join the conference call and webcast, during which
management will discuss the result of the Copper Creek PEA.
Thursday, May 4, 2023, at 1:30pm PT (4:30pm ET)
Toll-free in U.S. and Canada: +1 (800) 319-4610
All other callers: +1 (604) 638-5340
Webcast: https://services.choruscall.ca/links/faradaycopper202305.html
Webcast replay: Available on the Company’s website for one year and by phone at +1 (855) 669-
9658 or (604) 674-8052 for three months. Please enter passcode 3013#
PEA Overview
The 2023 PEA outlines a low initial capital project that processes approximately 345 Mt of mill feed material
from a combined open pit and underground operation. The PEA contemplates a 30,000 tonnes per day
(“tpd”) conventional flotation process plant producing high- quality copper and molybdenum concentrates,
with silver by-product credits. The PEA also captures value from an additional 20 Mt of oxide material
sourced from pre-strip mining and processed via a heap leach facility (“HLF”) utilizing solvent extraction
and electrowinning (“SXEW”), further supporting a rapid payback on initial capital. The PEA does not
incorporate any results from the Phase II drill program, which is currently ongoing and expected to conclude
near the end of the second quarter of 2023.
Payback of initial capital is expected to occur in Year 4, with the post-tax cash flows funding the expansionary
capital, which includes the addition of a molybdenum circuit and development of the underground footprint,
both of which commence in Year 3 (Figure 1, Table 1 & Table 13).
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Table 1: PEA Economic Highlights
Base Case Economics Unit LOM
Post-tax NPV(7%) $ millions $713
Post-tax IRR % 15.6%
Post-tax Payback Period Years 4.1
NPV / Initial Capital Ratio 0.9
Initial Capital $ millions $798
Sustaining and Expansion Capital $ millions $1,689
Closure and Reclamation $ millions $170
Economic Assumptions
Copper $/lb $3.80
Molybdenum $lb $13.00
Silver $/oz $20.00
Financial Metrics a
Annual Revenue $ millions $428
Annual Operating Costs $ millions $210
Annual EBITDA b $ millions $218
Annual Cash Flow (post-tax) $ millions $141
Notes to Table 1:
a Averages based on active mining during Years 1 – 29.
b EBITDA is a financial performance measure with no standardized definition under IFRS, defined as “earnings before
interest, taxes, depreciation and amortization”.
Table 2: Pre-Tax NPV Contributions
Pre-Tax NPV Contributions $ million
Mill Initial Capital ($640)
Open Pit $977
Underground $509
Total $846
Standalone Open Pit a $337
Notes to Table 2:
a Standalone open pit includes mill initial capital.
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Table 3: PEA Operating Highlights
Operating Statistics Unit Average LOM
Mine Life a Years 32
Tonnes Milled b ktpa 10.8
Open Pit Strip Ratio Ratio 1.2
Payable Production (per year) c, d
Copper Million lbs 106
Molybdenum Million lbs 1.4
Silver Thousand oz 324.6
CuEq ii Kt 51.1
Costs (by-product) iii
LOM Production Cash Costs $/Cu lb $1.67
LOM All-in Sustaining Costs $/Cu lb $1.85
Notes to Table 3:
a Mine life includes active mining (Year 1 – 29) and final processing of stockpiles (Year 30 – 32)
b Tonnes milled are exclusive of oxide and represent the average over the 32-year life of mine.
c Average annual production considers the period of active mining during Years 1 - 29, Year 30 – 32 includes processing
of stockpiles only.
d Based on payability in concentrate of 96.5%, 95% and 98.5% for copper, silver, and molybdenum, respectively. Copper
cathode payability of 98% is applied.
Table 4: Economic Sensitivity
Parameter Unit PEA Alternative Copper Prices a
Copper Price $/lb $3.80 $4.25 $5.00
Molybdenum Price $/lb $13.00 $13.00 $13.00
Silver Price $/oz $20.00 $20.00 $20.00
Post-Tax NPV(7%) $ millions $713 $1,144 $1,843
Post-Tax NPV(8%) $ millions $566 $951 $1,576
Post-Tax IRR % 15.6% 21.0% 29.6%
Post-Tax Payback Period Years 4.1 2.9 2.1
Notes to Table 4:
a An increase of $10/lb or $5/oz in m olybdenum or silver price assumptions increases the post -tax NPV(7%) by
approximately $129 million or $15 million, respectively.
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Figure 1: Annual Cash Flows
Note to Figure 1: Table 13 provides the amounts used to generate Figure 1. Total operating costs above are inclusive of royalties and
offsite charges.
Figure 2: Copper Equivalent Payable Metal Production
Design and Production Profile Overview
The open pit and underground mine plans were developed by SRK Consulting Inc. (“SRK”) . Future mining
is expected to be by contractor-operated conventional truck and shovel method at surface and during
underground development (pr e-production), transitioning to owner -operated block caving underground
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method to achieve a base annual mill feed rate of 11.0 Mt (30,000 tpd). Surface mining provides mill feed
until Year 11. A four -year open pit ramp down coincides with the underground production ramp-up,
achieving steady state production by Year 12 and continuing until Year 29. Current mine plan optimization
has applied an open pit stockpiling strategy whereby low -grade material mined from the pits would be
stockpiled and processed as supplementary mill feed or fed to the mill at the end of the mine life. The low-
grade stockpile peaks at 56.5 Mt, 20.0 Mt of which would be processed as supplementary feed between
Years 7 and 11, and the remaining 36.5 Mt would be processed between Years 28 and 32.
The base annual throughput would be primarily of sulphide material, with some transitional material mined
from the open pits. Oxide material recovered near surface in the early years of the anticipated mine life
would be segregated and processed separately in a heap leach facilit y, in addition to the 11.0 Mt base
annual throughput (Figure 3).
Figure 3: Total Processed Material by Material Type
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Figure 4: Mine Design Overview (isometric view looking northeast)
Note to Figure 4: Mammoth pit includes the Mammoth and Childs -Aldwinkle breccias, and the Copper Prince pit includes numerous
breccias such as the Copper Prince, Copper Giant, Copper Duchess, and Copper Knight.
Figure 5: Mined Material by Period
Note to Figure 5: All material reflected in this chart is mineralized mill feed unless denoted as 'Waste'.
Open Pit Mine Design and Schedule
Open pit mine designs utilized the updated MRE. The resource model was imported into Minesight mine
planning software where a Lerch Grossman algorithm was applied to the model to determine possible open
pit limits. Each open pit area was assessed across a series of revenue factors to target the optimal balance
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of NPV contribution, footprint requirements and strip ratio. The results of the assessment culminated in pit
shell selections that are reflective of an average revenue factor of 0.81 ($3.06/lb copper). Upon selection
of discrete pit shells for each pit area, a full pit design was completed in alignment with geotechnical
parameters developed as part of the PEA. All pit designs incorporated ramp placement, haulage networks,
pit phasing and backfill opportunities.
Open pits include Mammoth, the largest open pit, and several smaller satellite pits. Mammoth would be
mined in three phases, generally from the northwest to the southeast, while each of the satellite pits would
be a single phase. Table 5 summarizes the pit inventories.
Table 5: Inventory by Pit
Processed Tonnage (Mt) Processed Grade (% Copper) Waste Tonnage
(Mt)
Strip
Ratio Open Pit Sulphide/Transitional Oxides Sulphide/Transitional Oxides
Copper Prince 20.7 5.9 0.45 0.36 11.5 0.43
Globe 9.9 2.7 0.40 0.37 5.0 0.40
Old Reliable 12.9 4.0 0.36 0.20 10.9 0.65
Mammoth 59.9 2.9 0.37 0.25 109.6 1.75
Marsha 21.1 4.3 0.24 0.25 3.2 0.12
Bald/Jailhouse 8.5 0.0 0.48 0.16 41.7 4.92
Rum 1.0 0.0 0.73 0.44 1.0 1.04
Total a 133.9 19.8 0.37 0.29 182.9 1.19
Notes to Table 5:
a Numbers may not sum due to rounding.
Mineralization is hosted in three material types : sulphide, transitional and oxide. Sulphide and transitional
material would be processed at the flotation plant, while oxide material would be heap leached.
Table 6: Open Pit Summary – Material Processed by Year
Units Total 1 2 3 4 5 6 7 8 9 10 11 28-32
Total
Processed
Pit Material
Mt 153.7 10.3 14.3 16.3 14.6 12.6 14.7 10.8 9.3 7.4 5.2 1.7 36.5
Sulphides
and
Transitional
Mt 133.9 8.3 11.0 11.0 11.0 11.0 10.9 10.8 9.3 7.4 5.2 1.7 36.5
%Cu 0.37 0.50 0.78 0.38 0.44 0.39 0.42 0.48 0.49 0.29 0.17 0.17 0.17
Oxides
Mt 19.8 2.1 3.3 5.3 3.6 1.6 3.8 0.0 0.0 - - - -
%Cu 0.29 0.29 0.27 0.41 0.20 0.21 0.25 - - - - -
Cut-off grades (“COG”) are dictated by metal price, and consider material type, processing costs, recovery,
and selling costs. The direct feed CuEq ii COG for sulphide and oxide material is 0.13% CuEq ii, while for
transitional material it is 0.14% CuEqii. Material reporting to a stockpile has a slightly higher COG than direct
mill feed material to account for rehandling costs.
Grade bins were established to aid in mine planning, including low -grade, medium-grade and high-grade
bins. Low-grade material reports to stockpiles unless available throughput allows direct feed to the mill in
that period. The grade bins are defined by percent copper for sulphide and transitional material (Table 7).