Arizona Sonoran Copper Company Inc. (TSX:ASCU) has announced a strategic move to enhance the value of its Cactus Project by completing a buyback of 1 per cent of the Bronco Creek Exploration (BCE) net smelter royalty (NSR) for US$500,000.
This action reduces the NSR from 1.5 per cent to 0.5 per cent on the BCE parcel, which is part of the Parks/Salyer deposit within the Cactus Project.
The Cactus Project, located in Arizona’s Copper Belt, is ASCU’s flagship asset and has shown promising potential.
A recent 2024 Preliminary Economic Assessment (PEA) for the project reported robust economics, including a post-tax NPV8 of US$2.03 billion and an IRR of 24 per cent.
The PEA outlines a 31-year mine life with an average annual production of 86,000 tonnes of copper cathodes.
Nick Nikolakakis, ASCU’s CFO and VP Finance, commented on the royalty buyback: “Leading into 2025 and post-2024 Preliminary Economic Assessment, ASCU has a strong balance sheet to advance its programs and optimise the Company’s assets.
“The finance team is now acting on a previously identified program to leverage the copper price on future copper production and deliver copper price and production upside back to shareholders through efficient capital allocation.”
The Cactus Project benefits from several advantages:
- Brownfield development on private land
- Established infrastructure, including water rights and access
- Proximity to highways and rail networks
- A streamlined permitting process
ASCU aims to develop Cactus into a mid-tier copper producer with low operating costs.
The project is expected to produce a total of 2.4 billion kilograms of LME Grade A Copper Cathodes over its life.
The company’s focus on sustainability is evident in its commitment to ensuring “Net Zero Carbon Emission” from future operations.
This aligns with the growing demand for responsibly sourced copper in the renewable energy sector.
As ASCU moves forward with the Cactus Project, it continues to explore opportunities for optimisation and value creation.
The recent royalty buyback demonstrates the company’s proactive approach to maximising shareholder returns as it progresses towards becoming a significant player in the US copper mining industry.
