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Faraday Copper (TSX: FDY) on Wednesday reported high-grade drill results from its Copper Creek project in Arizona, expanding near-surface and vein-hosted mineralization.
Faraday’s drilling supports the theme of finding more shallow-depth minerals at the site 150 km southeast of Phoenix, BMO Capital Markets mining analyst Rene Cartier said. Cartier also flagged exploration potential outside the current resource area in his note on Wednesday. He suggested two holes in the American Eagle area, two in the Rum area and one east of last year’s Area 51 discovery showcased scope for growth.
Among the highlights, hole FCD-24-082 delivered 118.3 metres (true width 68 metres) grading 0.3% copper and 1.14 grams silver per tonne from the Prada breccia at 168.9 metres depth. The hole included a higher-grade interval of 22.5 metres (13 metres true width) at 0.5% copper and 1.4 grams silver.
The same hole intersected 109.4 metres (63 metres true width) at 0.4% copper, 0.007% molybdenum and 1.24 grams silver from the Boomerang breccia. This included 40.1 metres (23 metres true width) grading 0.8% copper, 0.02% molybdenum and 2.3 grams silver from 459.1 metres depth.
“This result not only confirms mineralization at depth but also showcases continuity within known breccias,” Cartier said.
The $2.7 billion capex project contains 4.2 billion lb. copper, 74.6 million lb. of molybdenum and 15.5 million oz. of silver, according to a measured and indicated resource in a 2023 preliminary economic assessment (PEA).
The next milestone is an updated technical report, including a resource update to incorporate new drill results, due by June. The latest assays are from the company’s 20,000-metre stage three drill program.
Investors responded to the news, bidding the stock 4% higher at C$0.75 apiece by midday in Toronto. Shares have traded between C$0.455 and C$0.96 over the past 12 months and the company has a market capitalization of C$152 million ($106m).
With a projected copper supply deficit from 2027, demand for electrification and renewable energy is soaring. CEO Paul Harbidge said in a Wednesday press release that Copper Creek is a rare opportunity. It is a nearly shovel-ready copper project in a mining-friendly state.
“Our continued success at Copper Creek demonstrates the enormous potential of this underexplored district,” Harbidge said.
Harbidge’s team has a strong track record. It includes Newmont’s (NYSE: NEM, TSX: NGT, ASX: NEM) 2021 acquisition of GT Gold for $311 million. Faraday aims to turn Copper Creek from a dormant asset into a mineable, advanced exploration project.
The project is in Arizona’s copper mining region. It has access to roads, rail, renewable energy and skilled labour. Copper Creek is near BHP’s (LSE: BHP; NYSE: BHP; ASX: BHP) San Manuel deposit and 40 km from the Hayden smelter. It’s ideal for development, Cartier and Harbidge said.
In the American Eagle area, drill results show hole FCD-24-077 intersected 197.2 metres (197 metres true width) grading 0.2% copper and 0.8 grams silver per tonne from 25.4 metres depth. It encountered a higher-grade interval of 16.1 metres (16 metres) at 0.5% copper and 1.4 grams silver from 86 metres down.
The American Eagle area is 800 by 1,000 metres. It has breccias and porphyries with strong copper signatures, per company documents. It overlies a deep porphyry resource at 500 to 1,100 metres deep and is a key focus for near-surface exploration.
Cartier noted the hole’s importance. It showed vein-hosted mineralization beyond the known breccia.
Meanwhile, the program also drilled east of the January 2024 Area 51 discovery and found good results. Hole FCD-24-079 intersected 58.1 metres (45 metres true width) of 19.1 grams silver per tonne from surface, with localized copper mineralization of 0.3% over 8.9 metres.
“This underscores the underexplored potential of the district and the possibility of discovering additional copper-bearing veins,” Cartier noted.
The 2023 resource estimate, in an updated PEA, shows a measured and indicated resource of 421.9 million tonnes grading 0.45% copper, 0.008% molybdenum and 1.1 grams silver per tonne.
The resource includes 294.8 million tonnes suitable for underground mining and 127.1 million tonnes for open-pit mining. An inferred resource of 83.6 million tonnes, with 0.34% copper and 0.6 grams of silver per tonne, shows more potential.
The PEA outlined a combined open-pit and underground mine with a 32-year life.. It calculated Copper Creek’s after-tax net present value, at a 7% discount rate, at $713 million, with an internal rate of return of 16%.
Faraday Copper secured C$23 million in financing in May last year that covers current plans.
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