Gold gains for third day before US data that may shape rate path
Bullion traded near $2,670 an ounce — touching the highest since mid-December.
Hudbay Minerals (TSX, NYSE: HBM) has upped its stake in Arizona Sonoran Copper Company (TSX: ASCU) with the purchase of approximately 11.85 million shares under a private placement.
Arizona Sonoran shares are priced at C$1.68 each, representing a total investment of about C$19.91 million. The stock opened Thursday’s session 12.6% higher at C$1.61 apiece. Its market capitalization stands at C$219.5 million ($152.4m).
The proceeds will be used by Arizona Sonoran to advance its flagship Cactus project, which comprises three porphyry copper deposits and one stockpile within a 5.5 km trend, including a past-producing mine. The company’s aim is to develop Cactus and become a mid-tier copper producer with low operating costs.
“We are pleased and appreciative to welcome this further endorsement of our project and the go-forward plan, by the team at Hudbay,” Arizona Sonoran CEO George Ogilvie said in a news release. “It is the company’s objective to develop Cactus to be a significant producer of copper cathodes for direct use by industry in the state of Arizona and the larger US supply chain.”
In 2024, Arizona Sonoran released an updated preliminary economic assessment on Cactus that confirmed its potential to become a low-risk copper mine project. It raised the project’s after-tax net present value (at 8% discount) by four-fold to $2 billion, with an increased internal rate of return of 24%.
The PEA was based on a modified mine plan that envisioned a standalone open pit operation with a mine life of 31 years, producing a total of 5.3 billion lb. of copper cathodes. The new mine plan was able to drive down both its cash cost to $1.82 per lb. and all-in sustaining cost to $2.00 per lb. Its initial capital cost is estimated at $668 million, with a payback of about five years.
“There can’t be many lower-risk copper development projects than Arizona Sonoran Copper’s Cactus,” Ogilvie said at the time of the PEA release. “This project is absolutely going into production as a standalone business case.”
In Thursday’s press release, Hudbay CEO Peter Kukielski also labelled Cactus as “an exciting copper development project” in Arizona.
“We see the US as a tier-1 mining jurisdiction and this investment increases our exposure to another high-quality development project in the region as we continue to advance our Copper World project,” he said.
The company recently secured all necessary permits for Copper World.
The Cactus project currently hosts a large-scale porphyry copper resource totalling 632.6 million measured and indicated tonnes grading 0.58% copper for 7.3 billion lb. of metal, and 474 million inferred tonnes at 0.41% copper for 3.8 billion lb.
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