Granite Creek Copper Announces Positive PEA with Net Present Value of $324M on Carmacks Copper-Gold Project in Yukon, Canada

VANCOUVER, BC / ACCESSWIRE / January 19, 2023 / Granite Creek Copper Ltd. (TSXV:GCX)(OTCQB:GCXXF) ( "Granite Creek" or the "Company" ) is pleased to report positive results from its Preliminary Economic Assessment ("PEA") for the Carmacks Copper-Gold-Silver project (the "Project" or "Carmacks Project"), located in the Yukon, Canada's Minto Copper District within the traditional territories of Little Salmon/Carmacks First Nation and Selkirk First Nation.

The PEA demonstrates attractive project economics with significant opportunities for additional mine life expansion, reinforcing the potential of the Minto Copper District to become a top-tier global copper district.

Granite Creek Copper will be hosting a live webinar to review the PEA results on January 24^th , 2023, at 9:00am PT | 12:00PM ET. To register, click here .

PEA Highlights

• Attractive project economics:
  • Base case metal prices of US$3.75/lb Cu, US$1,800/oz Au and US$22/oz Ag:
    Pre-tax NPV _5% of C$324 million and 36% IRR
    After-tax NPV _5% of C$230 million and 29% IRR
  • Case 1 metal prices of US$4.25/lb Cu, US$2,000/oz Au and US$25/oz Ag:
    Pre-tax NPV _5% of C$475 million and 48% IRR
    After-tax NPV _5% of C$330 million and 38% IRR
• Mine life of nine years at 7,000 tonnes per day with clear exploration potential to extend mine life with four target areas within 1km of the current resource.
• Capital cost of C$220m with payback of 2 years from commencement of production.
• Head grade of 1.10% copper equivalent ("CuEq") consisting of 0.90% Cu, 0.30 g/t Au and 3.5 g/t Ag.
• Average cash operating costs of US$1.76/lb CuEq and all-in sustaining costs of US$2.57/lb CuEq.
• Option for tailings treatment: PEA study identifies additional potential cash flow through processing of oxide tailings to increase total copper recovery. Recovery sensitivity shows an additional $180M pre-tax NPV based of a 20% increase in recovery rates.

The Company envisions developing the Carmacks Project into a low-carbon source of copper. A critical mineral, as defined by the Canadian government, copper is key to the transition to a zero-carbon economy through the electrification of transportation and other industries, and the development of renewable energy production. The 2023 PEA clearly demonstrates the viability of the Carmacks Deposit as a robust open pit sulphide and oxide copper-gold-silver project with significant potential upside from both resource expansion and secondary processing of oxide material to further improve oxide recoveries. The Project is to be powered by the Yukon's electrical grid which uses primarily renewable electricity.

"The completion of the PEA is a major accomplishment that doesn't just advance the Project beyond previous studies but completely re-envisions Carmacks as a high-grade, open pit copper, gold and silver producer with excellent expansion potential in a tier one jurisdiction", commented Timothy Johnson, President and CEO. "The inclusion of sulphide alongside oxide ore, either as a blend or a straight sulphide feed, has resulted in significant upside on the Project, with further opportunities recognized in both processing and exploration."

"Potential for near mine resource expansion is demonstrated in new volumetrically significant targets identified by comparison of the geophysical signatures of known mineralization with similar signatures of untested targets near the proposed pits ", continued Mr. Johnson. "These strong geophysical responses have a high correlation with copper sulphide minerals on the Project, giving us high confidence in these new targets, which are a priority for testing in upcoming drill campaigns."

PEA Study Approach

The PEA contemplates open pit mining using a conventional truck and shovel operation in two separate pits. Mining targets the high-grade, near surface oxide material in the 147 pit, then transitions to target sulphide material in the 1213 pit followed by final mining of the deeper oxide and sulphide material in 147. Mined material would be delivered to a crushing and grinding circuit consisting of a primary crusher, SAG mill and ball mill. Both oxide copper ore and sulphide copper ore would be processed via a simplified flow sheet consisting of well-established flotation technology producing a high-quality copper-gold-silver concentrate. Oxide and sulphide ore would be blended and sequenced to provide optimal cash flow and to minimise the environmental footprint with mined-out pits or portions of pits being reclaimed as mining commences in the next area. Both conceptual pits lie within 2km of the proposed mill site.

Tailings from the flotation circuit would be filtered and water recirculated into the flotation circuit. This would improve water management and limit environmental impact, with final tailings placement on a lined dry stack tailings facility at site.

A high-grade, premium copper, gold and silver concentrate would be shipped via deep seaports in Skagway, Alaska or other nearby facilities. Treatment and refining charges terms are within standard market rates.

Average copper recovery during life of mine ("LOM') is calculated to be 64% with approximately 2/3 of material processed being oxide ore and 1/3 being sulphide ore. Metallurgical studies returned 93% copper recovery when processing sulphide ore, 40% copper recovery while processing oxide ore and 82% when processing a 50:50 blend. Metallurgical work highlights the opportunity for further optimization of the Project through more detailed mine sequencing or discovery of near mine sulphide or that could be blended with ore from the 147 pit.

Table 1: PEA Key Parameters

1. Base case metal prices based on 36-month trailing average from January 15, 2022.
2. Recovery includes both oxide and sulphide ore and is based on mining 2/3 oxide and 1/3 sulphide LOM.
3. Total operating costs include mining, processing, tailings, surface infrastructures, transport, and G&A costs.
4. AISC includes cash operating costs, sustaining capital expenses to support the on-going operations, concentrate transport and treatment charges, royalties and closure and rehabilitation costs divided by copper equivalent pounds produced.
5. AISC is a non-IFRS financial performance measures with no standardized definition under IFRS. Refer to note at end of this news release.
6. The copper equivalent grade (CuEq) is determined by (total copper x US$3.75) + (total gold x US$1800) + (total silver x $22)/$3.75)/total resource tonnes.
7. Payback period is from commencement of mining.

Capital Cost

The PEA for the Project outlines an initial (pre-production) capital cost estimate of C$220 million and LOM sustaining capital costs of C$130 million, including overall closure costs of C$5 million. Initial capital costs include the construction of milling and processing facilities, lined dry stack tailings and lined waste rock facilities, on-site infrastructure of 15km of access road and facilities for water capture and treatment. Construction of a powerline (12.8 km, 138 kV) from an existing substation is placed under sustaining capital to allow for construction time of the power grid.

Table 2: Capex Estimates ¹

¹ All values stated are undiscounted.

Operating Costs

Operating costs estimates were developed using first principles methodology, vendor quotes received in Q3 2022, and productivities being derived from benchmarking and industry best practices. Over the LOM, the average operating cost for the Project is estimated at C$3.16/t mined and C$18.30/t processed. Tailings costs are included in processing costs.

The average cash operating costs over the LOM is US$1.76/lb CuEq and the average AISC is US$2.57 /lb CuEq.

Economic Analysis and Sensitivities

The PEA indicates that the potential economic returns from the Project justify advancing to a feasibility study.

The Project generates cumulative cash flow of C$371.2 million on an after-tax basis and C$505.8 million pre-tax at a base case of $3.75/lb Cu based on an average mill throughput of 7,000 t/day over the 9-year life of mine.

Table 3: Summary of Economic Analysis ^1,2

¹ The analysis assumes that the Project is 100% equity financed (unlevered).
² Appropriate deductions are applied to the concentrate produced, including treatment, refining, transport and insurance costs.

The PEA is significantly influenced by copper price assumptions. Using the Case 1 metal price scenario consists of near current prices of US$4.25/lb Cu, US$2000/oz Au and US$25/oz silver, the Project generates an after-tax Net Present Value ("NPV") using an 5% discount rate of $328 million and an after-tax IRR of 38% with a payback period of 1.5 years from the commencement of production. (Table 3), Outlined below in Table 4 is a detailed sensitivity analysis across gold and copper prices with silver kept at $22/ounce. Table 5 below highlights additional sensitivities to foreign exchange, recovery, CAPEX and OPEX.

Table 4: Copper and Gold Metal Price Sensitivity Analysis NPV- Pre-Tax values in Million CDN$