Granite Creek Copper Ltd. (GCX:TSX; GCXXF:OTCQB) boosted the copper resource by 43% at its 100%-owned Carmacks copper-gold-silver deposit in Yukon to 651 million lb copper (651 Mlb Cu), up from 457 Mlb in the 2018 resource.
The marked increase stems mostly from more than 8,200 meters of infill and expansion drilling in 25 holes since Granite Creek acquired the high-grade Carmacks deposit, about 220 km north of Whitehorse, in 2020.
Granite Creek President and CEO Timothy Johnson says drilling hit significant copper mineralization in 23 of the 25 holes and the upgraded resource is the first phase in what will be a big year for the company.
“What we're starting to deliver to the market is really a seed change in the understanding and development path of the Carmacks project. Taking it from a small oxide play; finding a way to bring both the oxides and sulphides into view; and develop a preliminary economic assessment (PEA) that looks at all the resources in an open pit configuration as opposed to really a small portion that was looked at in the 2017 PEA,” Johnson told Streetwise.
Granite Creek has not yet secured a contractor to produce the Carmacks PEA but Johnson says the RFP process is well in hand and the lucky bidder will be announced soon. The junior has sufficient cash to fund the PEA, plus enough for some geophysical exploration work in the upcoming season.
Normally it would take roughly a year to complete a PEA but given that one was done by the previous owner in 2017, Johnson reckons this one should be finished in about half the time. He expects to publish the PEA in Q3.
'We're not mine builders... we're explorers'
“We're not mine builders and we're not operators, we're explorers. We need to show strong economics to ultimately attract a large copper producer, whether it's the guys up the road from us, at Minto, or someone else,” Johnson said.
Minto Metals Corp. (MNTO:TSX.V) produces copper “up the road” at its namesake Minto underground mine, about 35 km from Carmacks.
Minto’s 4,000-tonne-per-day mill produces a copper-gold concentrate that is shipped to a refinery in Japan via deep-water port in Skagway, Alaska.
Johnson estimates that Carmacks ore would likely be significantly cheaper to mine than Minto’s current cost of $2.60/lb copper, based on it being contemplated as open pit versus underground.
As far as any near-term arrangements, Johnson says, “There may be some synergies there. But there's nothing in the works yet.”
Official National Instrument 43-101 Resource
The new official National Instrument 43-101 resource at Carmacks reads: 36.2 million measured and indicated tonnes (36.2 Mt) grading 1.07% copper equivalent (1.07% CuEq) (0.81% Cu, 0.26 g/t gold, 3.23g/t silver and 0.011% molybdenum) for a total of 651 Mlb copper. There is also an inferred resource of 38 Mlb Cu.
In terms of precious metals, measured and indicated gold ounces improved by 24% to 302,000 oz, from 243,000; while the amount of contained silver shot up to 3.79 million ounces (3.79 Moz), from 2.684 Moz — a 41% bump.
Granite Creek also added molybdenum (Mo) to its resource (it had been left out of the previous resource estimate). So far, Carmacks has 8.5 Mlb Mo, with 93% in the measured and indicated category (about 7.9 Mlb), and 7% in the inferred (about 600,000 lb).
Contractor SGS Geological Services modelled the resource using three conceptual open pits and metal prices of $3.60/lb Cu, $1,750/Au, $22/oz Ag, $14/lb Mo.
Metallurgical Testing Demonstrates High Recoveries
Test work showed metallurgical recoveries from oxide mineralization at Carmacks averaged 85% Cu, 85% Au, 65% Ag, whereas copper recoveries improved to 90% in the sulphides. Silver recoveries from sulphides were roughly the same, while gold recoveries dropped to about 75%.
Further testing showed that a 25% copper concentrate could be produced with recoveries of up to 95% of copper and 85% for gold. Ongoing metallurgical test work will determine recoveries for silver and molybdenum, as well as further testing to confirm the copper and gold recoveries.
“We have looked at recoveries in the sulphide versus the oxides we're getting much better recoveries in the sulphides and the reason for that is when you're in the oxide a portion of it is still sulphide and that hadn't been addressed previously. That tends to give you poor recoveries, maybe 80 to 85% in the oxide ore, but we're seeing up to 95 in the sulphide. Your sulphide ore is probably going to be worth, I'd say, 10-15% more just because of recoveries,” Johnson told Streetwise.
Johnson says the previous operators had modeled roughly a seven-year mine life based on production solely from oxide ore, despite knowing that the sulphides were there.
Granite Creek, with its early-stage Stu copper-gold project, acquired Copper North and its PEA-stage Carmacks project in 2020. The deal created a 17,580-hectare land package in Yukon’s Minto Copper Belt. Stu remains largely undeveloped.
“When we took the (Carmacks) project over the real potential was the sulphide. We feel that could be at least two to three times larger than the overlying oxide (resource),” Johnson said.
In a research report that pre-dates the new resource estimate, Vancouver-based Couloir Capital had a 12-month target price of CA$0.26 on Granite Creek. The company trades in a 52-week range of CA$0.285 and $0.165.
Granite Creek Copper is one of of three publicly traded mining exploration companies in the Vancouver-based Metallic Group. The others are: Group Ten Metals Inc. (PGE:TSX; PGEZF:OTCQB; 5D32:FSE), a growth stage nickel and platinum group elements explorer with a recently announced inaugural resource estimate on its Montana asset; and Metallic Minerals Corp. (MMG:TSX.V; MMNGF:OTCQB), which is developing a high-grade silver play in Yukon’s Keno district, as well as a silver-gold-copper project in Colorado that is closing in on its first resource estimate.
1) Brian Sylvester compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He and members of his household are paid by the following companies mentioned in this article: None. His company has a financial relationship with the following companies referred to in this article: None.
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