World Copper Ltd. (WCU:TSX.V; WCUFF:OTCQB) released an updated mineral resource estimate for its Zonia copper oxide project in central Arizona, reported Red Cloud Securities analyst Taylor Combaluzier in a Feb. 24 research note. Red Cloud incorporated the new data into its model on the copper explorer-developer, and this resulted in an increased target price of CA$2.20 per share, up from CA$2.15.
"We view this update positively, as we believe there is further room to upgrade and grow the resource with future drilling," Combaluzier wrote.
Given the new target price of CA$2.20 per share and World Copper's current price of CA$0.20 per share, the difference between these figures represents significant potential gains for investors. Combaluzier also pointed out World Copper is trading at a discount to its peers. Red Cloud rates it Buy.
In his report, Combaluzier also presented key points about the updated resource and the primary differences between the new and historical (2017) versions.
Billion Pounds of Copper
Now, Zonia's total Indicated and Inferred (I&I) resources total 1,030,000,000 pounds (1.03 Blb) of copper.
This reflects a 90% increase in tons to about 198,000,000 tons (198 Mt) from 104 Mt. Despite this change, Zonia's strip ratio remains low at 0.8:1.
However, Combaluzier noted, the new I&I resources were arrived at using a lower cutoff grade than was used previously: 0.125–0.130% versus 0.20% copper.
"If compared on [an] apples-to-apples basis using a cutoff of 0.20%, total resources increased by 26% to about ~839,000,000 pounds (839 Mlb) copper.
Also with the latest update, a higher long-term copper price of US$3.60 per pound was used. This compares to the US$2.50 per pound price employed in 2017.
Differences in Results
In the updated resource estimate, the Indicated resource, which was categorized in 2017 as Measured & Indicated, is about 12% lower. It now amounts to 450.5 Mlb copper.
The Inferred resource, on the other hand, is 272% higher than before, and now totals 575.4 Mlb copper.
Grades are "slightly lower," at 0.26% rather than 0.32% copper.
Company's New Focus
Next, World Copper intends to explore another target near the Zonia deposit called Zonia Norte, Combaluzier wrote. It is a large, 2.5-by-1.5 kilometer copper-molybdenum-manganese porphyry anomaly. Current plans call for a 5,000 meter drill program. Pending drill permits are expected to be received in H1/23.
Zonia Norte "could potentially be twice as large as the Zonia deposit," added Combaluzier, and "could potentially help increase the size and scale of the project."
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Red Cloud Securities, World Copper Ltd., February 24, 2023
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