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World Copper Limited WCUFF WCU is a junior mining company focused on the exploration and development of two copper-oxide properties, the Escalones Copper-Gold Porphyry-Skarn Project in Chile and the recently acquired Zonia Copper-Oxide Project in Arizona. Management is fast tracking a PEA on the Escalones Main deposit and has plans to expand the resource base at Escalones (via Mancha Amarilla & the East Skarn) and Zonia (NE target). In addition, the company holds an option to earn 100% of the Cristal Project, a prospective copper porphyry property in northern Chile.
Over the last few months, World Copper has internally reviewed the Zonia Project, which confirmed management initial expectations of the acquired property. At Escalones, Phase 1 of a diamond drilling campaign confirmed the presence of copper oxide mineralization at Mancha Amarilla. Drilling results, which will give an indication of the grade of the mineralization, are anticipated to be announced in the second half of 2022. Last but not least, restructuring the royalties at Zonia and the placement of stock have helped finance management's initiatives.
Zonia Copper Oxide Project
In early May 2022, World Copper provided an exploration and development update on the Zonia Copper Oxide Project. Management completed its internal technical review of the Zonia Project, which included evaluating currently available historical surface and subsurface geological, geochemical and geophysical data on the project.
The review confirmed the three main drivers for the acquisition, namely:
1) step-out drilling from the existing resource, along infill drilling between widely spaced mineralized intercepts and drilling to depths below the current constraints of the pit, should provide the opportunity to expand the resource.
2) an update of the 2018 PEA, which would adjust copper price used in the economic base case (US$3.00/lb) and also include any mineralized material beyond the private patented land claims that limited the geographic scope of the resource
3) situated 1.5km north-northeast of the main Zonia resource is a porphyry exploration target (dubbed Zonia Norte). The undrilled target is large (2.5km x 1.5km) and coincides with a copper-molybdenum-manganese geochemical anomaly and further identified by historical geochemical surface rock sampling.
Zonia Royalty Options
In late May 2022, the holder of an option to acquire a 1% net smelter returns royalty on future production from the Zonia Project exercised the option and $1,407,867 in cash was paid to World Copper. Thereafter, World Copper bought the 1% net smelter returns royalty from the new holder of the royalty through the issuance of 7,731,285 common shares of World Copper. Upon closing, World Copper will pay a $50,000 structuring fee to Electric Royalties.
Then, on June 10, 2022, World Copper announced the signing of a binding Letter of Agreement for the sale of a 0.5% gross revenue royalty (GRR) and a royalty option package on the Zonia Project to Electric Royalties Ltd. ELEC ELECF for CAD$1.55 million in cash and 2,000,000 common shares of Electric Royalties. The royalty option package consists of a 15-month option to acquire an additional 0.5% GRR on the Zonia Project for CAD$3.0 million and a 24-month option to acquire a 1.0% GRR on the Zonia Norte deposit for CAD $3.0 million payment.
Zonia Exploration Plans
World Copper is planning additional mapping work and sampling in order to better understand the mineralization at both the Zonia Main Deposit and the Zonia Norte porphyry target. In addition, exploration drill targets are in the process of being determined at the Zonia Main Deposit and at the Zonia Norte porphyry target. Permit applications have been filed for a 5,000m (18 hole) drill program that will test drill for near-surface copper oxide deposits at Zonia Norte.
Management plans to update the 2018 PEA during the second half of 2022. Thereafter, the company aims to complete a Pre-Feasibility Study in 2023.
Escalones Copper Project
On August 11, 2022, an amended NI 43-101-compliant PEA for Escalones Copper Project was filed on SEDAR. The filing was part of a procedural process that added descriptive minor details, particularly about site visits. The only significant change was a better break down of estimated costs for the recommended Phase 1 work program. The only significant change was a better break down of estimated costs for the recommended Phase 1 work program, which total $4.9 million in both PEAs.
In March 2022, the required regulatory approvals were granted for a 5,000m diamond drilling campaign at Escalones. Initially, management had the intention to drill roughly 11 holes in order to test for the continuation of the mineralization to the south into Mancha Amarilla. The Chilean winter curtailed the drilling program; nevertheless, at least seven holes (2,000m) were completed which confirmed the presence of copper oxide mineralization to a depth of at least 250m. Drilling results, which will give an indication of the grade of the mineralization, are anticipated to be announced in the second half of 2022.
Financing
From the end of December 2021 through May 2022, 5,300,705 common share purchase warrants have been exercised, providing the company with $2,767,297.19 in net proceeds.
On June 29, 2022, World Copper announced a non-brokered private placement of up to 8,333,333 Units to be priced at $0.30 per Unit. Each Unit is to consist of one common share of World Copper and one-half of one common share purchase warrant exercisable at $0.60 per share for a period of two years. Net proceeds are intended for exploring and developing the company's Escalones and Zonia projects, along with bolstering working capital.
On July 21, 2022, the company closed the First Tranche of $2.5 million private placement, issuing 4,264,414 Units. Gross proceeds were approximately $1,279,324.
Valuation
Based on our calculation of share value of attributable resources, our target for World Copper's stock is $1.30. Our calculation of share value of attributable resources is primarily based on the ascertained net asset value of the Escalones Project, which is determined by adjusting the value of estimated resources for the expected recovery rate and mining/processing costs using the new information provided by the PEA issued in March 2022, along with the current price of copper.
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