World Copper Announces Compelling Results for Escalones PEA; US$1.5 Billion Post-Tax NPV8 and 46.2% IRR
#2710 - 200 Granville Street
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NR 22-07 February 15, 2022
World Copper Announces Compelling Results for Escalones PEA;
US$1.5 Billion Post-Tax NPV8 and 46.2% IRR
Webcast & conference call March 22, 2022, 8:00AM PST
FOR IMMEDIATE RELEASE...Vancouver, British Columbia: World Copper Ltd. (" World Copper" or
the "Company"; TSXV: WCU, OTCQB: WCUFF), announces the results of the independent Preliminary
Economic Assessment ( "PEA") for its flagship Escalones project in Central Chile ("Escalones" or
the "Project"). All values in this news release are reported in U.S. dollars unless otherwise noted.
PEA HIGHLIGHTS:
• $1,499.6 million Post-Tax NPV8 at $3.60 /lb. Life of Mine ("LOM") (20 years) copper price
o Post-Tax IRR of 46.2% and Payback of 2.18 years
o $2,279.1 million pre-tax NPV8, Pre-Tax IRR of 63.9%
• $1,822.4 million Post-Tax NPV8 at US$4.00 /lb. LOM copper price
o Post-Tax IRR of 53.6% and Payback of 1.95 years
o $2,769.8 million pre-tax NPV8, Pre-Tax IRR of 75.0%
• Initial Capital (CAPEX) cost of $438.4 million (from construction decision)
o Profitability Index (NPV / CAPEX) at $3.60 /lb. of 3.44X
o Capital Intensity Index (Initial CAPEX / Cu production in tonnes); First 5-years $7,756 /t
Cu; LOM $8,416 /t Cu
• First 5 years average annual copper production of 124.7 Mlbs. (56,520 tonnes); LOM average 114.9
Mlbs. (52,131 tonnes)
o 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
• LOM Sustaining Capital of $192.5 million
o First 5-years average All-In Sustaining Cost (AISC) of $1.28 /lb. Cu; LOM average AISC
of $1.42 /lb. Cu
• 365.8 Mt of heap leach tonnes mined and processed over a 20-year LOM in a conventional open
pit mining operation
o First 5-years average grade 0.49% Cu; LOM average grade 0.38% Cu
o LOM strip ratio of 1.12 of waste to heap leach tonnes
o LOM cutoff grade of 0.17% Cu
World Copper Ltd. - 2 - February 15, 2022
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• Conventional heap leach, SX -EW processing facilities, targeting 50,000 tonnes of heap leach
tonnes placed per day
o Estimated average heap leach recoveries of 72.5%
• Recommendations for work that may lead to potential for further improvements to the P roject
including:
o Expansion and improvement of the existing Escalones Mineral Resource Estimate through
further exploration of the total 16,189-hectare land package
o Improvement and refinement of metallurgical recoveries and processes through further
metallurgical testwork
o Continued evaluation of different project sizes ( "right sizing") and optimization of mine
plans
o Evaluation and incorporation of existing technologies to improve sustainability and reduce
environmental impact
The PEA summarized in this news release is considered preliminary in nature, contains numerous
assumptions 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 results of the PEA will be realized. No Mineral Reserves have been
estimated for Escalones. Mineral Resources are not Mineral Reserves and do not have demonstrated
economic viability. Inferred Mineral Resources are that part of the M ineral Resource for which quantity
and gra de 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 M ineral 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. Mineral
Resources are captured within an optimized pit shell and meet the test of reasonable prospects for economic
extraction.
The effective date of the PEA is February 15, 2022 , and a National Instrument 43- 101 Standards of
Disclosure for Mineral Projects ("NI 43-101") technical report to support the PEA will be filed on SEDAR
within 45 days of this news release.
Nolan Peterson, CEO and President of World Copper commented on the results:
"The exceptional results of the Escalones PEA confirm what we at World Copper hav e always believed –
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 . These factors combine leading
to a profitability index in the top quartile of peer group companies with a capital intensity in the bottom
quartile. Furthermore, the Project’s lowest quartile position on the global cash cost curve indicates
profitability in even the weakest copper market scenarios. The results of the PEA, combined with Escalones'
large land package and resource expansion potential, make it a truly outstanding project.
Embracing the oxide potential of Escalones resulted in unlocking the value of an asset that others have
overlooked. The results of the PEA are a testament to our skill at understanding and identifying the key
value drivers of copper deposits. As an oxide heap leach Escalones is positioned well to benefit from global
decarbonization efforts and the evolving global economy, where reducing environmental impacts and
contributions to preventing climate change are increasingly important. It is our goal to work hand in hand
with our local partners and com munities, to begin proving that more sustainable mining projects are not
only possible but can also yield economic benefits to all stakeholders.
World Copper Ltd. - 3 - February 15, 2022
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The PEA is the culmination of years of hard work by the team at World Copper, our partners , and our
stakeholders. I personally thank all for their efforts and support . While the PEA is the most significant
milestone to date for Escalones, our work does not end here . We intend to advance the P roject through
development and permitting while continuing expl oration drilling to upgrade and expand the resource as
we work to unlock the full potential of the Project."
SUMMARY OF PRELIMINARY ECONOMIC ASSESSMENT
The PEA was prepared by Global Resources Engineering ( "GRE") with contributions from other firms ,
including Hard Rock Consulting, LLC ("HRC"). The PEA was prepared in accordance with the
requirements of NI 43-101 and is based on the Mineral Resource Estimate for Escalones with an effective
date of June 25, 2021, prepared by HRC (see "Geology and Mineral Resource Estimate" below).
The PEA confirms that the Escalones estimated Inferred Mineral Resources are amenable to a large scale,
bulk high-tonnage, open pit, mining operation. An optimized PEA mine plan has been developed from the
mineral resources available to the Project. For the PEA study a leased mining fleet, operated by the owner,
was assumed, in order to minimize initial CAPEX requirements – categorizing the expenditure, as
appropriate, into operating costs.
Escalones production would focus on the oxide heap -leachable material processed using a conventional
heap leach operation with sul furic acid and fresh water. The pregnant leach solution is further processed
via solvent extraction and electrowinning to produce an average 52,000 tonnes (approximately 114 million
lbs.) of copper in cathodes per year, over a full 20-year LOM. Copper recoveries are estimated to average
approximately 72.5% of total copper placed.
Capital and operating c ost estimates were prepared based on current and expected long -term pricing
assumptions and to a PEA level +/- 35% level of accuracy.
Table 1: Summary of PEA Economic Results and Assumptions
PEA Economic Model Results and Assumptions
Copper Price Assumed $3.60/lb Cu
Pre-Tax NPV8 & IRR $2.28 billion / 63.9%
Post-Tax NPV8 & IRR1 $1.50 billion / 46.2%
Undiscounted Post-Tax Cashflow (LOM) $3.13 billion
Payback Period (from first production) 2.18 years
Initial Capital $438.4 million
LOM Sustaining Capital $192.5 million
LOM C1 Cash Costs $1.19 / lb Cu
LOM All-In Sustaining Cash Costs (AISC) $1.42 / lb Cu
Average Annual Copper Production 52,000 kt
LOM ~20 years
Estimated Process Recovery LOM 72.5%
(1) All figures are reported in 2022 U .S. dollars and on a 100% equity owned basis. Copper price used was based on past 3 -years
historical prices and forward 2-years LME copper prices. Copper prices exclude a $80/t Cu (or $0.0364 / lb. Cu) Cathode premium
which was included into overall economics. Taxes were calculated assuming Chilean Mining Royalty Tax rates as of January 2022
and a 27% First Order Corporate tax rate.
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Table 2: Economic and Sensitivity Analysis
Copper Price
$US/lb
Post-Tax NPV8
Base Case
$US Millions
Base Case
IRR
(%)
Post-Tax NPV8
CAPEX (±10%)
$US Millions
Post-Tax NPV8
OPEX (±10%)
$US Millions
Post-Tax NPV8
Grade (±10%)
$US Millions
3.00 1,009 34.7% 971 / 1,046 898 / 1,119 1,252 / 761
3.60 1,500 46.2% 1,463 / 1,535 1,392 / 1,605 1,781 / 1,210
4.00 1,822 53.6% 1,786 / 1,857 1,717 / 1,927 2,130 / 1,507
Static sensitivities are presented in Table 2 above. A dynamic sensitivity analysis was conducted using
Monte Carlo statistical modeling techniques . The sensitivity to dynamic variations in model assumptions
are presented below in Table 3.
Table 3: Dynamic Sensitivity Analysis
Monte Carlo Dynamic Modeling Results1 P90
Post – Tax NPV8 - $US million $1,098 million
Post – Tax IRR - % 34.2%
C1 Cash Costs - $/lb Cu $1.46 / lb Cu
*Note:
(1) Monte Carlo results are displayed as P 90 the result where 90% of the 20,000 generated outcomes of the dynamic statistical
modeling exceeded (or did not exceed) the result. Probability distributions for Monte Carlo Analysis inputs were:
• Copper Price: $3.00 to $4.20 – Triangular Distribution
• CAPEX: 65% to 135% – Beta General Distribution
• OPEX: 65% to 135% – Beta General Distribution
• Copper Recovery: 67.5% to 77.5% - Beta General Distribution
• Copper Head Grade (Payable Copper): 90% to 110% - Beta General Distribution
GEOLOGY AND MINERAL RESOURCE ESTIMATE
Escalones has estimated Inferred Mineral 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% for the purposes of resource modeling. HRC completed an
updated resource estimate for Escalones with an effective date of June 25, 2021 (see technical report dated
October 6, 2021 (effective August 15, 2021) entitled National Instrument 43-101 Technical Report:
Mineral Resource Estimate for the Escalones Copper Project Santiago Metropolitan Region, Chile).
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Table 4: Oxide Mineral Resource Statement for Escalones
Class Density Tonnes Grade Metal Content
Tonne/m3 (x1000) Total Cu% x1000 Ib Cu
Inferred 2.69 426,198 0.367 3,446,982
*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 leached materi al costs of US$6.50/t (process, general and
administrative and mining taxes); refining & transportation costs of $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 o ptimized pit shell and meet the test of reasonable prospects for
economic extraction, the optimization used the same mining costs of $2.50/t mined and a 50º pit slope.
(4) Rounding may result in apparent differences when summing tonnes, grade and contained metal content.
The estimated Inferred Mineral Resources sit within a four square-kilometre area of hydrothermal alteration
comprising quartz -sericite, potassic, and calc- silicate alteration assemblages, mostly hosted by central
porphyritic intrusive rocks with porphyry-style (fracture-fill and disseminated) mineralization. Calcareous
sedimentary rocks flanking the central zone host replacement -style "skarn" and disseminated sandstone -
hosted mineralization.
Copper mineralization at Escalones occurs as secondary copper oxides, sulphates and carbonates that have
replaced sulphides comprising chalcopyrite, bornite, and covellite to depths averaging about 300m. This
replacement has led to higher grades at shallower depths, and, since the mineralization sits wi thin a high-
standing ridge, makes it ideal for surface mining.
The estimated Inferred Mineral Resources are reported within an optimized pit shell and are considered to
have a reasonable potential for economic extraction. A 0.13% total Cu cut -off grade was selected for
reporting the mineral resource (bolded) while the sensitivity to various cut-off grades is also demonstrated
(Table 5). The cut-off grade was calculated based on the following assumptions: a long-term copper price
of US$3.50/lb Cu, assumed combined operating leached material 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 cut -off represent a
15% increase over the three-year historical average as of June 30, 2021.
The Inferred Mineral Resources have currently only been prepared and reported above the base of the
oxide/secondary sulphide – primary sulphide boundary to define material that can be recovered via leach.
There is sulphide material below this surface that has been successfully tested for flotation recovery in the
past but has been excluded from the current estimate of Inferred Mineral Resources.
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Table 5: Resource Sensitivity Within Escalones 2021 Resource Pit
Cut-off Grade
(% Cu) Strip Ratio
Inferred
Tonnes (x ‘000) Copper (%)
Contained Acid
Soluble Copper
(millions lbs)
0.10 0.77 463,472 0.347 3,541
0.13 0.93 426,198 0.367 3,447
0.15 0.99 412,643 0.374 3,405
0.20 1.21 371,385 0.396 3,245
0.25 1.63 312,692 0.428 2,952
MINING
Mine plans for the resource area were designed and planned using conventional open pit mining methods.
The open pit is suitable for phased designs. The design pit phases use triple-benching of 10-metre benches
at an overall pit wall slope of 50°. In-pit haul roads were designed to be 34-metres wide, allowing for two-
way traffic using 227-tonne haul trucks.
A PEA mining schedule was generated from the Mineral Resource Estimate within the base case pit,
which was set at a cut-off grade of 0.17% Cu. The PEA mining schedule includes four distinct phases of
pit development and was developed assuming the following:
• Mining Production Rate: 50,000 tonnes per day (tpd)
• Mine Operating Days per Week: 7
• Mine Operating Weeks per Year: 52
• Mine Operating Shifts per Day: 2
• Mine Operating Hours per Shift: 12 (10 productive hours per shift)
• Utilization: 85%
• Availability: 90%
A summary of the reported resources for each pit phase are shown in (Table 6). In some cases, out-of-pit
haul roads needed to access pit areas on the steep banks of the property were included in the resource
reporting.
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Table 6: Escalones Resources by Pit Phase
Pit Phase
Mineralized
Material
(million tonnes)
Rock Waste
Material (million
tonnes)
Till Waste
Material
(million
tonnes)
Contained
Copper
(millions
lbs)
Copper
Grade
(%)
Stripping
Ratio
1 42.4 20.3 15.5 533.6 0.570 0.84
2 94.0 50.8 33.9 811.9 0.392 0.90
3 67.3 124.1 11.4 565.9 0.382 2.02
4 162.2 140.3 12.3 1,186.8 0.332 0.94
Total 365.8 335.6 73.1 3,098.1 0.384 1.12
*Notes:
(1) The block model was created by HRC.
(2) GRE used HRC’s Whittle pit shells to create phases as a guide for phase design and the ultimate final pit design.
(3) GRE used 50° inter-ramp angle pit slopes for the pit design, with 34-metre-wide haul roads at 10% grade.
(4) Resources in this table are reported at a 0.17% Cu cut-off grade.
RECOVERY METHODS
The production process for Escalones is comprised of conventional sulfuric acid heap leaching followed by
solvent extraction and electrowinning to produce cathode copper. The target production rate is 50,000
tonnes per day of mineralized material producing an average of 52,000 annual tonnes (115 million pounds)
of Grade -A copper cathode. The estimated average copper extraction from the mineralized material is
72.5%, with 75% recovery of the recoverable copper during the first year, 20% during the second year, and
5% thereafter.
Run of mine (ROM) material would be trucked to a primary jaw crusher located close to the proposed open
pit, then conveyed to a secondary crushing circuit, and finally delivered to the heap via a series of overland
conveyors. The pregnant leach solution (P LS) from the heap leach would be processed directly in the
solvent extraction plant (SX), diverted to a dedicated pond, or recirculated to the heap.
The SX circuit consists of a series of extraction stages and a stripping stage using a conventional
mixer/settler arrangement. The loaded organic from the extraction stage would be transferred to the stripper
vessel, producing a rich electrolyte solution for subsequent electrowinning (EW). The copper -depleted
raffinate from the extraction circuit would be recycled to the raffinate pond. Prior to electrowinning, the
rich electrolyte would be purified to remove entrained organic through column flotation and filtration. The
depleted "raffinate" solution would report to the heap leach raffinate pond/tank and be recirculated back to
the heap after having the reagent levels adjusted (free acid).
The electrowinning circuit consists of a series of electrowinning cells equipped with cathodes and anodes.
The copper depleted lean electrolyte would report back to the SX stripping circuit. The plated copper
cathodes would be stripped using a mechanized stripping system after being washed. Grade -A copper
cathodes would then be sampled and bundled for shipment and sale. No concentrate is produced from SX-
EW processing.
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INFRASTRUCTURE
Escalones will require the following infrastructure for operations:
• Process water supply
• Power supply
• Access and haul roads
• Cathode storage and transport system
• Mine and plant infrastructure
• Ground material transport
• Upgraded or expanded camp
The Project is accessible from Queltehues via gravel road. Additional access and haul roads will be needed
within the Project area to access mining and process facilities, crushers, and pits. The costs for development
of these and other necessary infrastructure components are included in the cost estimate. The conceptual
design includes locating all project infrastructure facilities within the immediate vicinity of the mine.
The power requirements for the Project are approximately 150 GWh. per annum. Power is assumed to come
from the grid connection at the Queltehues hydroelectric plant, approximately 53 km downstream. High-
voltage transmission lines are included in the project estimate, to provide power from the Queltehues plant
to the Project.
Process makeup water consumption assumes 0.06 cubic metres of water evaporated per stacked tonne,
including a 5% evaporation loss from irrigation flows, with an additional 0.15 cubic metres per stacked
tonne stored in the heap. This results in a makeup usage estimate of approximately 2.6 million cubic metres
per year (5,000 litres per minute (lpm) or 1,300 gallons per minute (gpm)). Mine process and camp water
will require an additional 379 lpm (100 gpm).
GRE has assumed water would be available from the Rio Pangal Valley near El Teniente, Costs to construct
an 85 km long pipeline to bring water from this area to the project site are included in the cost estimate .
World Copper currently has no water rights for Escalones ; however, active discussions are ongoing to
secure water from sources that may include seawater pipeline tie-ins.
A camp suitable for housing up to 230 persons will need to be constructed. A suitable location down valley
towards Queltehues is assumed to be available.
CAPITAL AND OPERATING COST ESTIMATES
GRE prepared the capital and operating cost estimates under the assumption of processing of open pit mined
material at a rate of 50,000 tpd. Capital costs include, process plant and facilities, process mobile equipment,
site and ancillary infrastructure, G&A, sustaining capital, working capital and a 25% contingency on
general capital it ems for a total initial capital of $438.4 million and a total sustaining capital of
$192.5 million for a total of $630.9 million for the LOM. (See Table 7).
An existing 2% net smelter returns royalty exists on the Escalones resource exploitation concessions, in
favour of the previous option holder on the Project . The royalty can be re -purchased for a cost of
US$3 million within the first 5-years of production from Escalones. For the capital cost estimate prepared
by GRE it is assumed that the royalty is re-purchased.