New World Resources (NWC.AX) has released an updated resource calculation on its flagship Antler copper-zinc-lead project in Arizona. The new resource contains 48% more tonnes and 44% more metals compared to the previous resource calculation and currently stands at 11.4 million tonnes containing 2.1% copper, 4.97% zinc, 0.99% lead, 32.9 g/t silver and 0.36 g/t gold using a cut-off grade of 1% copper-equivalent.
Reducing the cut-off grade to 0.8% would increase the tonnage by 3% but reduce the copper and zinc grade by a similar percentage so not a whole lot of tonnes and pounds would be added by lowering the cut-off grade.
The expanded resource should have a positive impact on both the mine life and the NPV of the project. As a reminder, the scoping study, which was completed last summer, outlined a pre-tax NPV7% of US$525M based on an initial capex of US$201M and a negative C1 cash cost of minus $0.31 per produced pound of copper. New World will now update the mine plan based on the new resource and this should result in an updated scoping study followed by a pre-feasibility study by the end of this year. This should increase the pre-tax NPV by approximately 20-25%. The image above shows some potential development scenarios and how the NPV and IRR may be impacted.
Disclosure: The author has no position in New World Resources. Please read our disclaimer.
