NWST.V · 2023-01-05 12:00:00

Northwest Copper Announces Positive PEA FOR the Kwanika-Stardust Copper-GOLD Project, Describing a Low Capex Project with Scale

Economic Studies

Page 1 of 23

News Release

NORTHWEST COPPER ANNOUNCES POSITIVE PEA FOR THE KWANIKA-STARDUST COPPER-GOLD

PROJECT, DESCRIBING A LOW CAPEX PROJECT WITH SCALE

Vancouver, BC – January 5, 2023 – NorthWest Copper Corp. (“NorthWest” or “the Company”) (TSX -V:

NWST) (OTCQX: NWCCF) is pleased to announce the results of the preliminary economic assessment

(“2023 PEA”), conducted by Ausenco Engineering Canada Inc. (“Ausenco”) and Mining Plus Canada

Consulting Ltd (“Mining Plus”), on its 100% owned Kwanika-Stardust Project comprising the Kwanika and

Stardust deposits (the “Project”). This represents the first technical and economic evaluation of the

combined deposits outlining a robust project with manageable initial capital cost and multiple

opportunities for project growth. NorthWest plans to continue to evaluate the possibility of further

synergies with nearby deposits and the proposed Project infrastructure, with a particular focus on the

nearby 100% owned Lorraine Project1.

The 2023 PEA outlines a project that proposes mining approximately 96 million tonnes (“Mt”) of material

in a combination of open pit and underground operations from the Company’s 100% owned Kwanika and

Stardust deposits. The 2023 PEA contemplates a 22,000 tonnes per day (“tpd”) process plant, producing

high-quality copper concentrate with significant gold and silver by-product credits.

Highlights

• The 2023 PEA describes Kwanika-Stardust as a unique project combining manageable initial

capital with a significant Cu-Au production profile:

o Peak copper equivalent (“CuEq”2) production of 152.1 million pounds of copper (“Mlbs”)

per year (year 6) and life of mine (“LOM”) CuEq average production of 90.6 Mlbs per year

over 11.9 years;

o Total LOM production of 694 Mlbs Cu, 803 koz Au, and 3,204 koz Ag (1,078 Mlbs CuEq)

o Average cash operating costs3 of US$1.58/lb CuEq (US$0.44/lb Cu on a by-product4 basis);

o Average all-in sustaining c ost (“AISC”)5 of US$2.01/lb CuEq (US$ 1.12/lb Cu on a by -

product6 basis);

o Initial capital of C$567.9 M (US$438.5 M7), with a construction period of two years;

o Attractive economics with NPV (7%) of C$440.1 M (US$339.8 M) and IRR of 17.1% pre-tax

and NPV (7%) of C$215.0 M (US$166.0 M) and IRR of 12.7% after tax8; and

1 See NI 43-101 technical report titled “Lorraine Copper -Gold Project NI 43-101 Report & Mineral Resource Estimate Omineca Mining Division, B.C,” dated

September 12, 2022 with an effective date of June 30, 2022, filed under the Company’s SEDAR profile at www.sedar.com .

2 CuEq (lbs) = Cu (lbs) + (Au (koz) * Au ($/oz)) / Cu ($/lb) /1000 + (Ag (koz) * Ag ($/oz)) / Cu ($/lb) / 1000, US$3.63 Cu, US$1,650 Au, US$21.50 Ag

3 Cash operating cost on a Co-product basis, calculated with the following formula: (Site Operating Costs) / LOM CuEq (Mlbs), Site Operating Costs = C$23.04 (per

tonne processed)*95,607 kt*0.77 (USD exchange rate).

4 Cash operating cost on a By-product basis, calculated with the following formula: (Site Operating Costs – LOM Gold Revenue – LOM Silver Revenue) / LOM Cu

(Mlbs), LOM Gold Revenue = US$1,321.55M, LOM Silver Revenue = $US 68.53M.

5 AISC Co-product basis, calculated with the following formula: (Site Operating Costs + Treatment, Refining, Transport Costs+ Sustaining Capital + Closure Costs –

Salvage Value) / LOM CuEq (Mlbs), Treatment, Refining, Transport Costs = US$220.96M, Sustaining Capital = C$282.46M*0.77, Closure Costs = US$32.26M, Salvage

Value = US$1.89M.

6 AISC By-product basis, calculated with the following formula: (Site Operating Costs + Treatment, Refining, Transport, + Sustaining Capital + Closure Costs – Salvage

Value – LOM Gold Revenue – LOM Silver Revenue) / LOM Cu (Mlbs)

7 0.77 US$ per C$1.00

8 Economics calculated at US$3.63 Cu, US$1,650 Au, US$21.50 Ag

Page 2 of 23

o At spot prices economics improve, with NPV (7%) of C$665.6 M (US$513.9 M) and IRR of

21.7% pre-tax and NPV (7%) of C$363.3 M (US$280.6 M) and IRR of 16.4% after tax9;

o The 2023 PEA is preliminary in nature. It 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 and there is no

certainty that the 2023 PEA will be realized.

• Mineral Resources include mineralized material from four sources:

o Kwanika Central open pit:

▪ 30.7 Mt of Measured Resources (0.31% Cu, 0.31 g/t Au, 1.05 g/t Ag);

▪ 35.9 Mt Indicated Resources (0.22% Cu, 0.19 g/t Au, 0.80 g/t Ag); and

▪ 4.1 Mt Inferred Resources (0.15% Cu, 0.15 g/t Au, 0.58 g/t Ag);

o Kwanika Central underground block cave:

▪ 25.6 Mt Measured Resources (0.50% Cu, 0.61 g/t Au, 1.62 g/t Ag); and

▪ 11.3 Mt Indicated Resources (0.51 Cu%, 0.65 g/t Au, 1.56 g/t Ag);

o Kwanika South open pit:

▪ 25.4 Mt Inferred Resources (0.28 % Cu, 0.06 g/t Au, 1.68 g/t Ag);

o Stardust underground:

▪ 1.6 Mt Indicated Resources (1.49% Cu, 1.63 g/t Au, 30.1 g/t Ag); and

▪ 4.1 Mt Inferred Resources (1.00% Cu, 1.38 g/t Au, 22.8 g/t Ag);

o Mineral Resources that are not Mineral Reserves do not have demonstrated economic

viability.

• NorthWest is committed to working collaboratively with First Nations to ensure that sound

cultural and environmental practices based on sustainability and shared value are incorporated

into any mine development plans:

o NorthWest will continue to engage based on open communication and collaboration to

create benefits for First Nations;

o The Project will look to minimize the development impact by using existing infrastructure

and processing mineralized material from multiple sources in one central facility;

o The Project plans to connect to the BC Hydro electrical grid and will thereby use primarily

renewable electricity, reducing the Project’s carbon footprint; and

o The Project could contribute to British Columbia’s and Canada’s critical mineral supply by

providing copper, a much-needed element for the green energy transition.

9 Spot price economics calculated at US$3.83 Cu, US$1,840 Au, US$23.97 Ag (as at January 3, 2023)

Page 3 of 23

Table 1: Summary Project Metrics

Production Per Year AISC Economics

(Mlbs)

(koz)

CuEq10

(Mlbs)

(US$/lb)

CuEq

(US$/lb)

Initial

Capital

(C$M)

Total

Operational11

ATCF

(C$M)

After-

Tax

NPV-7

(C$M)

After-

Tax

IRR %

LOM

Average 58.31 67.43 269.12 90.56 $1.12 $2.01 $567.90 $1,324.98 $215.04 12.7%

“This study is a major step in demonstrating the value created by combining Kwanika and Stardust, the

cornerstone deposits of the NorthWest portfolio,” stated President and CEO Peter Bell. “We have been

describing a project with manageable initial capital and significant copper production to the market since

creating the Company in 2021. This PEA supports that vision. We are also now working towards advancing

the Project including exploring whether the nearby 100% owned Lorraine Project, located approximately

40 km away , can be developed with the infrastructure contemplated in the Kwanika -Stardust PEA .

Conducting the necessary studies to ascertain whether Lorraine can be incorporated into the Kwanika -

Stardust project will be the main objective of the Company in 2023, as we believe that this will add further

value to the strong project we have outlined with this PEA.”

“The focus in Canada is turning to critical minerals, including copper,” continued Mr. Bell. “Our project is

extremely well located, has both meaningful scale and manageable capex, benefits from existing

infrastructure, has access to renewable power and is in a Tier 1 jurisdiction making it rare and highly

valuable. We look forward to working collaboratively with First Nations to advance the project as part of

BC and Canada’s push for critical Canadian copper production.”

The Company will host a conference call and webcast on Thursday, January 5, 2023 at 11:30 AM Eastern

time (8:30 AM Pacific time). Details to access the call can be found below.

Mineral Resources

Mineral Resources for Kwanika have been updated with parameters from the 202 3 PEA. Stardust is also

updated to reflect refined operating and capital costs. Mineral Resources at Kwanika Central are 95% in

the Measured and Indicated categories, reflecting the amount of drilling and geological data that have

been completed in this area. Kwanika South and Stardust represent areas for both further growth of

Mineral Resources as well as conversion of Inferred Resources to Measured and Indicated Resources. The

quantity of mineralized material was estimated and included in the mine plan using a Net Smelter Return

(“NSR”) threshold approach, alternately called economic cut off, rather than a copper cut-off grade.

10 CuEq (lbs) = Cu (lbs) + (Au (koz) * Au ($/oz)) / Cu ($/lb) /1000 + (Ag (koz) * Ag ($/oz)) / Cu ($/lb) / 1000, US$3.63 Cu, US$1,650 Au, US$21.50 Ag

11 Operational after tax cash flow (“ATCF”) is defined as Total Revenue – Site Operating Costs - Treatment, Refining, Transport Costs - Sustaining Capital -Growth

Capital - Closure Costs - Taxes + Salvage Value ) , Total Revenue = C$5,068.04M, Site Operating Costs = C$ 2,202.87M, Treatment, Refining, Transport Costs =

C$286.96M, Sustaining Capital = C$282.46M, Growth Capital = $493.27M, Closure Costs = C$41.90M, Taxes = C$438.06M, Salvage Value = C$2.46M.

Page 4 of 23

Table 2: Combined summary resource estimate12

Kwanika Central

Open Pit

Economic

Cut-Off US$/t Classification Tonnes (Mt) Cu (%) Au

(g/t)

(Mlbs)

(koz)

8.21

Measured 30.7 0.31 0.31 1.05 210.8 310.5 1,041.7

Indicated 35.9 0.22 0.19 0.80 174.9 222.0 923.9

M&I 66.6 0.26 0.25 0.92 385.7 532.5 1,965.6

Inferred 4.1 0.15 0.15 0.58 13.8 20.1 77.3

Underground

Economic

Cut-Off US$/t Classification Tonnes (Mt) Cu (%) Au

(g/t)

(Mlbs)

(koz)

16.41

Measured 25.6 0.50 0.61 1.62 284.4 501.3 1,332.6

Indicated 11.3 0.51 0.65 1.56 126.2 236.7 565.1

M&I 36.8 0.51 0.62 1.60 410.6 738.0 1,897.8

Inferred - - - - - - -

Kwanika South

Open Pit

Economic

Cut-Off US$/t Classification Tonnes (Mt) Cu (%) Au

(g/t)

(Mlbs)

(koz)

8.21 Inferred 25.4 0.28 0.06 1.68 155.0 52.4 1,373.9

Stardust

Underground

Economic

Cut-Off US$/t Class Tonnes (Mt) %Cu g/t Au g/t Ag Cu

(Mlbs)

(koz)

88.00 Indicated 1.6 1.49 1.63 30.1 52.2 83.1 1,536.4

Inferred 4.1 1.00 1.38 22.8 90.0 181.1 3,004.3

2023 PEA Summary

The 2023 PEA includes capital and operating costs for a potential Kwanika-Stardust mine; as well as

recovery assumptions, metal prices and a mine plan for the combined Project. The 2023 PEA was

developed in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects

(“NI 43-101”) by Ausenco and Mining Plus, using historical and the latest 2022 metallurgical testing data

performed by SGS Minerals, ALS Metallurgy, Bureau Veritas Commodities, and Base Metallurgical

Laboratories Ltd (“Base Met”), with further details on the historic data used shown in the Database section

below. The Company plans to file the complete 2023 PEA NI 43-101 technical report under the Company’s

SEDAR profile at www.sedar.com within 45 days of this news release.

The 2023 PEA will supersede the previous PEA on the Kwanika deposit13 and updates the previous Mineral

Resource estimate on the Kwanika deposit14. The 2023 PEA also updates the prev ious Mineral Resource

estimate on the Stardust deposit15. The table below summarizes the key findings of the 2023 PEA.

12 Please see end of the release for notes to the Mineral Resource Estimate . Mineral Resources that are not Mineral Reserves do not have demonstrated economic

viability

13 See NI 43-101 technical report titled “NI 43-101 Technical Report for the Kwanika Project Preliminary Economic Assessment Update 2017,” dated April 28, 2017

with an effective date of April 3, 2017, filed under the Company’s SEDAR profile at www.sedar.com.

14 See NI 43-101 technical report titled “NI 43-101 Technical Report for the Kwanika Project Resource Estimate Update 2019,” dated April 17, 2019, filed under the

Company’s SEDAR profile at www.sedar.com.

15 See NI 43-101 technical report titled “Stardust Project Updated Mineral Resource Estimate NI 43 -101 Technical Report Omineca Mining Division, British

Columbia,” dated July 2, 2021 with an effective date of May 17, 2021, filed under the Company’s SEDAR profile at www.sedar.com.

Page 5 of 23

Table 3: 2022 PEA Economic Highlights

Base Case Economics Units Pre-Tax After-tax

NPV (7%) C$M $440.10 $215.04

NPV (7%) US$M $339.83 $166.05

IRR % 17.1% 12.7%

Initial Capital C$M $567.90

Sustaining Capital C$M $282.43

Growth Capital16 C$M $493.27

Economic Assumptions Units Base Case

Copper US$/lb $3.63

Gold US$/oz $1,650.00

Silver US$/oz $21.50

Financial Metrics Units LOM

Average Annual Revenue C$M $425.70

Average Annual Operating Costs C$M $185.03

Avg. Ann. Free Cash Flow (after tax) C$M $111.29

The 2023 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 Project described in the 2023 PEA will

be realized. Table 4 provides a summary of key operating metrics from the 2023 PEA:

Table 4: 2023 PEA Operating Highlights

Operating Statistics Units Avg. LOM

Mine Life Years 11.9

Tonnes Processed ktpa 7,967.3

Strip Ratio17 W:O 1.79

Production (per year)

Copper Mlbs 58.31

Gold koz 67.43

Silver koz 269.12

CuEq Mlbs 90.56

Recoveries – Open Pit

Copper % 84.3

Gold % 60.0

Silver % 57.8

Recoveries – Underground

16 Growth Capital is capital associated with brining new areas of mineralized material into production – namely Kwanika underground block cave and Stardust

underground

17 Strip Ratio only accounts for the mineralized material and waste mined from the Kwanika Central open pit and the Kwanika South open pit. The strip ratios

including mineralized material mined from underground is 0.91.

Page 6 of 23

Operating Statistics Units Avg. LOM

Copper % 89.7

Gold % 71.4

Silver % 70.3

Operating Costs

Cash Cost – Cu with by-products US$/lb $0.44

Cash Cost – CuEq US$/lb $1.58

AISC – Cu with by-products US$/lb $1.12

AISC – CuEq US$/lb $2.01

Economic Sensitivity

Tables 5 and 5a below summarizes the pre-tax and after-tax sensitivities of NPV and IRR to metal prices:

Table 5 – Economic Sensitivity to Metal Prices (C$M, pre-tax)18

Metal Prices NPV (5%) NPV (7%) NPV (10%) IRR (%)

Spot $860.83 $665.55 $439.95 21.7%

52 Week high $1,490.45 $1,207.90 $878.64 31.9%

Base Case + 20% $1,281.04 $1,027.91 $733.40 28.6%

Base Case + 10% $940.35 $734.01 $495.28 23.0%

Base Case $599.67 $440.10 $257.16 17.1%

Base Case – 10% $258.99 $146.19 $19.04 10.6%

Base Case – 20% -$81.70 -$147.72 -$219.08 3.1%

Table 5a – Economic Sensitivity to Metal Prices (C$M, after tax)

Metal Prices NPV (5%) NPV (7%) NPV (10%) IRR (%)

Spot $499.11 $363.32 $207.06 16.4%

52 Week high $904.75 $715.05 $494.60 24.7%

Base Case + 20% $769.84 $598.31 $399.37 22.0%

Base Case + 10% $550.47 $407.87 $243.51 17.5%

Base Case $329.13 $215.04 $84.88 12.7%

Base Case – 10% $104.23 $18.12 -$78.27 7.5%

Base Case – 20% -$129.04 -$187.15 -$249.39 1.9%

Sustainability

Advancement of the Kwanika -Stardust Project is aligned with supplying critical mineral production,

especially copper, in Canada. Collaboration with First Nations is a key part of our effort. The Project would

be designed to have meaningful metal production while minimizing the Project’s environmental footprint.

The Project is in an area of British Columbia with existing infrastructure, hydroelectric power and a local

workforce supporting our programs. Environmental, social and governance (ESG) performance is core to

NorthWest’s longer-term goal to contribute to sustainable econo mies and encourage and promote

18 Base Case Prices US$ 3.63 Cu, US$1,650 Au, US$21.50 Ag, Spot Prices as at January 3, 2023 (US$3.83 Cu, US$1,840 Au, US$23.97 Ag), 52 Week Cu price high

(US$4.94 Cu, US$ 1,790 Au, US$ 23.27 Ag)

Page 7 of 23

cultural and environmental stewardship. The Company has taken a step towards our goals by completing

a comprehensive 2021 ESG report 19 in 2022 , which gives NorthWest a strong baseline to track and

demonstrate ESG progress.

Development of the Project may create many opportunities to bring needed resources to meet the

demands of society and the changing economy. However, development of the Project will also impact the

environment, First Nations and local communities . There are opportunities to build on traditional and

local knowledge to manage these potential impacts and to put systems in place that support a better

understanding of the land, and to encourage and support stewardship. In addition, by working

collaboratively with First Nation communities and leadership we see opportunities to build and support

the development of stronger local economies.

NorthWest envisions a future of shared values, where partnerships with local communities drive a new

kind of mining where the rights of First Nations are recognized and stewardship of the environment and

cultural heritage form the foundation of future development. As a Company we will strive to pursue best

practices as we advance the Project beyond the 2023 PEA.

Next Steps

With completion of the 2023 PEA, NorthWest intends to continue to advance its portfolio of projects. Key

next steps are expected to include:

• Conducting the necessary studies at both Kwanika-Stardust and Lorraine to ascertain whether the

projects could potentially be combined. This will require further work, including metallurgical test

work, transportation studies, general engineering and geological modeling before the Lorraine

Project could be considered for combination with the Project . The Company anticipates

completing metallurgical test work on both the Kwanika-Stardust and Lorraine projects, including:

o Work at Kwanika -Stardust to optimize recovery with a focus on improving recovery of

gold and silver; and

o Work at the nearby Lorraine Project will focus on determining recovery and exploring the

possibility of processing mineralized material from Lorraine at the proposed Kwanika -

Stardust process facility;

• Exploration with a focus on Lorraine, including areas around the current resource area and on the

larger property;

• Exploration at Kwanika-Stardust to test high-grade drill targets;

• NorthWest will continue to proactively engage with First Nations in our geographic area in support

of the responsible development of the Project;

• Develop plans:

o For baseline environmental testing and scoping work in advance of a potential future

environmental assessment (EA) submission; and

o To conduct an energy audit to ensure that the Project is employing current available

technologies and best practices to drive lower carbon emissions. Items studied are

19 The Company’s 2021 ESG Report can be found here: https://northwestcopper.ca/investors/annual-esg-report/

Page 8 of 23

expected to include electrification of the mine fleet and equipment, alternative methods

of haulage and more energy efficient process plant operation.

Opportunities

In addition, to the next steps noted above, the Company is actively exploring several additional

opportunities which the Company hopes will enhance Project value. These include:

• Potentially adding additional mineralized material to the mine plan at Kwanika-Stardust through

additional exploration and drilling;

• Further metallurgical test work on mineralized material from Kwanika -Stardust to optimize

metallurgical recoveries;

• Further engineering and trade -off studies on Kwanika -Stardust to reduce capital and operating

costs and improve operating efficiency;

• Further analysis with respect to optimizing shipping and transportation costs;

• The Company anticipates relying, to the extent feasible, on clean electricity . Further studies

exploring the potential for a ‘net-zero’ emissions mine at Kwanika -Stardust, resulting in a

differentiated project with regulators, investors and local stakeholders;

• Molybdenum is present at Kwanika South at elevated concentrations20. Further study is required

to determine if the addition of a molybdenum circuit could add value to the Project.

Webcast Details

The Company will host a conference call on Thursday, January 5, 2023 at 11:30 AM Eastern time (8:30 AM

Pacific time).

• Via telephone, by calling 1-604-638-5340 or 1-800-319-4610

• Via webcast at: https://services.choruscall.ca/links/northwestcopper202301.html

The webcast will be archived for 90 days following the call at the above-noted link.

Mining

Preliminary mine designs have been developed for the Project based upon the Mineral R esource

estimates for Kwanika-Stardust. Resource models were imported to Minesight® mine planning software

where a Lerch Grossman algorithm was applied to a NSR model to determine possible open pit limits.

The mine plan was developed to mine 95.6 Mt of mineralized material and 86.9 Mt of waste over the LOM

(shown in Figure 1). Mineralized material will be mined from four areas: Kwanika Central open pit (years

1-4), Stardust underground (years 4-9), Kwanika Central underground block cave (years 4-12) and Kwanika

South open pit (years 9-12). Further detail on the Kwanika Central open pit and underground is shown in

Figures 2 and 3, the underground development plan at Stardust is shown in Figure 4, and detail on the

Kwanika South open pit is shown in Figure 5.

20 See NI 43-101 technical report titled “NI 43-101 Technical Report for the Kwanika Project Res ource Estimate Update 2019,” dated April 17, 2019, filed under the

Company’s SEDAR profile at www.sedar.com.

← Back to feed