Resource and expansion drilling at the Kutcho copper-zinc project in B.C. has extended mineralization down dip of its Main deposit, reports Kutcho Copper Corp.
Mineralization was extended 50 metres down dip from previous drilling and beyond the project’s existing resource model in drill hole KC18-280, which returned a 5.4 metre intercept from 193 metres down hole grading 2.48% copper, 1.0% zinc, 114 grams silver per tonne, and 0.24 gram gold, or 4.0% copper-equivalent.
The Main deposit remains open down-dip in this area and along strike over a distance of 250 metres. The company also reported that 62% of its down dip holes intersected sulphide mineralization at Main.
Highlights from eight other drill holes include 5.58 metres starting from 59.42 metres downhole, grading 1.91% copper, 7.85% zinc, 33.2 grams silver, and 0.60 gram gold for 5.7% copper-equivalent in hole KC18-280, and 10.5 metres from 94.45 metres downhole, averaging 1.89% copper, 0.6% zinc, 33.4 grams silver, and 0.69 grams gold, for 2.9% copper-equivalent in hole KC18-287.
The high-grade copper-zinc-gold-silver volcanogenic massive sulphide (VMS) system at the project is about 100 km east of Dease Lake in northern B.C.
In mid-October the company adopted a shareholder rights plan “to ensure, to the extent possible, that all shareholders of the company are treated fairly and equally in connection with any unsolicited take-over bid or other acquisition of control of the company.”
An updated prefeasibility study completed last year outlined a 12 year mine life with a 2,500-tonne per day production rate for life-of-mine payable production of 378 million pounds of copper and 473 million pounds of zinc.
The Kutcho project is envisioned as an underground mining operation, supplemented by a starter pit on the Main deposit during the construction phase.
Initial capital costs, including a 15% contingency, were forecast to run to $220.7 million with a post-tax payback of three and a half years. Unit operating costs were estimated at US$1.60 per lb. copper excluding by-products, and US$0.59 per lb. copper net of by-products.
The project contains probable reserves of 10.4 million tonnes grading 2.01% copper, 3.19% zinc, 34.61 grams silver per tonne and 0.37 gram gold for a copper-equivalent grade of 2.92%.
Measured and indicated resources stand at 16.85 million tonnes grading 1.89% copper, 2.87% zinc, 32.8 grams silver and 0.36 gram gold for a copper-equivalent grade of 2.71%. Inferred resources add 5.79 million tonnes grading 1.33% copper, 1.64% zinc, 23.2 grams silver and 0.24 gram gold for a 1.79% copper-equivalent.
The Kutcho property lies within the King Salmon Allochthon, a narrow belt of Permo-triassic island arc volcanic rocks and Jurassic sediments, situated between two northerly dipping thrust faults: the Nahlin fault to the north, and the King Salmon fault to the south.
There is a 900-metre gravel airstrip about 10 km from the deposit. At presstime in Toronto, Kutcho Copper was trading at $0.32 per share within a 52-week trading range of $0.27 and $1.04. The junior has about 57.2 million shares outstanding for a market cap of $18 million.
Michael Gray of Macquarie Research has a 12-month price target on the junior of $1.75 per share and an outperform rating.
The mining analyst stated in a research note that he was “encouraged by the progress being made by Kutcho Copper as it sequentially de-risks the Kutcho project and advances it towards a feasibility study in the second quarter of 2019.”
