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 (TSXV: KC; US-OTC: KCCFF).
The high-grade copper-zinc-gold-silver volcanogenic massive sulphide (VMS) system at the project is 100 km east of Dease Lake in northern British Columbia.
Mineralization was extended 50 metres down dip from previous drilling and beyond the project’s existing resource model in drill hole 18-280, which returned a 5.4-metre intercept from 193 metres downhole grading 2.48% copper, 1% zinc, 114 grams silver per tonne, and 0.24 gram gold, or 4% copper-equivalent.
The Main deposit is open down-dip in this area and along strike over a distance of 250 metres.
The company also reported that 62% of its downdip holes intersected sulphide mineralization at Main.
Highlights from eight other drill holes include 5.6 metres starting from 59 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 18-280, and 10.5 metres from 94 metres downhole, averaging 1.89% copper, 0.6% zinc, 33.4 grams silver and 0.69 gram gold, for 2.9% copper-equivalent in hole 18-287.
In 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 takeover 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 lb. copper and 473 million lb. 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 $221 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 US59¢ per lb. copper net of by-products.
The project has 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 2.92% copper-equivalent grade.
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 2.71% copper-equivalent grade. 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 north-dipping thrust faults: the Nahlin fault to the north, and the King Salmon fault to the south.
There is a 900-metre gravel airstrip, 10 km from the deposit.
At press time, Kutcho Copper traded at 32¢ per share within a 52-week trading range of 27¢ to $1.04.
The junior has 57.2 million shares outstanding for an $18-million market capitalization.
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.”