The Feasibility Study establishes the Casino Project as a robust copper-gold project with positive economics at conservative commodity prices. Globally over the past few years, very few projects of the size of Casino have been engineered to a feasibility study level and maintained attractive economics.
The economic analysis of the Casino Project projected an after-tax 8% discounted net present value (NPV) of $1.83 billion dollars, with an internal rate of return (IRR) of 20.1% at long term commodity prices of $3.00/lb copper, $1,400/oz gold, $14/lb molybdenum, and $25/oz silver at a C$:US$ exchange rate of 0.95. Payback under these conditions is only 3.0 years.
The Feasibility Study evaluates the development of the Casino deposit as a conventional open pit mine, concentrator complex, processing ore at nominally 120,000 tonnes per day and heap leach operation processing ore at nominally 25,000 tonnes per day. The initial production will focus on the deposit's oxide cap as a heap leach operation to recover gold and silver in dore form over the first 18 years. The main sulphide deposit will be processed using a conventional concentrator to produce copper-gold-silver and molybdenum concentrates over 22 years.
Most of the Casino Project's revenue is from copper (46%), but gold is a significant contributor to the project (34%), establishing the Casino Project as an attractive project from either a copper or gold perspective.
The Feasibility Study estimates a proven and probable mill ore reserve of 965 million tonnes at 0.204% copper, 0.24 g/t gold, 0.0227% molybdenum, and 1.74 g/t silver and a proven and probable heap leach ore reserve of 157 million tonnes at 0.292 g/t gold, 0.036% copper, and 2.21 g/t silver. Total contained metal in the combined proven and probable mineral reserve is equal to 4.5 billion pounds of copper, 8.9 million ounces of gold, 483 million pounds of molybdenum, and 65 million ounces of silver.
Total initial capital investment in the project is estimated to be $2.46 billion, which represents the total direct and indirect cost for the complete development of the Casino Project, including associated infrastructure and power plant. Sustaining capital for the project is estimated at $362 million.
Baseline data acquisition and other permitting activities continued in 2012. Community meetings were held in Whitehorse and the Village of Carmacks in May, and Western met with the Selkirk and Little Salmon/Carmacks First Nations late in the fourth quarter 2012 and in early 2013. Western has prioritized engagement with communities, First Nations and other governments in preparation for formal submission of its application to the Yukon Environmental and Socio-economic Act Board ("YESAB") - the first step of the Yukon permitting process.
The Company expects to continue its permitting activities in 2013 with the goal of submitting its application to the YESAB in the fourth quarter of 2013.
The Company filed its annual information form ("AIF"), audited financial statements and MD&A for the year ended December 31, 2012 with the appropriate Canadian regulatory bodies on March 22, 2013. These filings are available for viewing on SEDAR at www.sedar.com.
The Company also filed its Form 40-F with the U.S. Securities and Exchange Commission for the year ended December 31, 2012 on March 22, 2013. Western's Form 40-F is available for viewing and retrieval through EDGAR at www.sec.gov/edgar.shtml.
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