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PolarX study predicts US$53m a year in free cash

Updated: May 20


PolarX has released a scoping study for its Alaska Range project. Credit: File

An updated scoping study by PolarX for its Alaska Range copper-gold project shows a total EBITDA of US$573 million (AU$882 million) over a 9.5-year mine life at a post-construction average annual free cash flow of US$53 million (AU$82 million).


And glaring out from the newly-revealed numbers is an anticipated pre-tax internal rate of return of 38 per cent that the company says will allow it to pay back its costs in just 2.75 years.


The positive study shows mining and processing are scheduled to begin with an open-pit operation at the company’s Caribou Dome site, followed by underground mining at its Zackly deposit.


PolarX expects a total revenue of US$1.375 billion (AU$2.115 billion) during the life of the project. The latest figures are based on a mineral resource at Caribou Dome of 7.2 million tonnes going 3.1 per cent copper and 6.5 grams per tonne silver, while Zackly holds 4 million tonnes at 1.1 per cent copper, 1.6g/t gold and 12.6g/t silver.


It gives the company 11.2 million tonnes containing 269,000 tonnes of copper, 213,000 ounces of gold and 3.131 million ounces of silver across both deposits, with 83 per cent of the proposed mining material in the measured and indicated categories.


Importantly, PolarX believes there is strong potential for a significant resource expansion – especially at Caribou Dome where the most recent drilling returned a 19m hit at an impressive 7 per cent copper from about 45m that remains open at depth and along strike.


Mineralisation at the site is currently modelled from surface to a depth of just 300m. However, the company says drilling has revealed mineralisation to a depth of 450m from surface and additional exploration may significantly extend the resource. Zackly also shows potential upside as it remains open at depth and immediately east along strike from the mineral resource.


The updated scoping study is based on the company’s recently-released resource upgrade at Caribou Dome that showed a bump of 160 per cent when compared to its 2017 estimate. A previous scoping study released last year showed the Alaskan venture could generate $1.16 billion in revenue over a mine life of 6.5 years and an average annual free cash flow of $53 million.


The latest study shows metallurgical recoveries of 90 per cent copper and 79 per cent gold from flotation at Zackly, with 78 per cent copper recovery from flotation at Caribou Dome and 80 per cent silver at both deposits. The company is planning additional metallurgical testwork during the next few months in a bid to optimise recovery rates.


Caribou Dome sits about 250km north-east of Anchorage in the North American State of Alaska. Copper was first discovered at the site in 1963 and the period up to 1970 saw 95 diamond drillholes plunged into the system to delineate the mineralisation.


In early 2015, PolarX secured the option for an 80 per cent interest in the project through meeting expenditure obligations and annual cash payments.


The company’s 100 per cent-owned Zackly deposit was discovered in 1979 and drilled in 1981 and 1982. Little further work was undertaken until 2017 and 2018 when PolarX drilled more than 30 new holes to validate and extend the deposit.


It then released a maiden JORC resource of 3.4 million tonnes at 2.g/t gold and 1.2 per cent copper. Its latest resource was announced in October last year.


With plans for open-pit mining at Caribou Dome before heading underground at Zackly, it appears the work of PolarX at its Alaska Range project has paid off – especially with the strong potential for an increased resource through further exploration.


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