A positive prefeasibility study combined with a boost in copper pricing has seemingly resulted in Arizona Sonoran Copper (TSX: ASCU) rethinking their priorities for the Cactus project in Arizona. The company this morning indicated that it is in the process of terminating an option for Rio Tinto to enter a joint venture agreement on the brownfield project.
The company early this morning indicated that discussions will take place in January for the early termination of the option agreement. Instead, Arizona Sonoran intends to advance the Cactus project on a standalone basis, with a feasibility study currently targeted to be released in the second half of 2026.
A final investment decision meanwhile could be delivered as early as the fourth quarter of 2026, along with advancement of permitting amendments and project financing.
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Updates on the joint venture arrangement meanwhile will not be provided until a definitive decision has been made.
The decision notably follows Arizona Sonoran in October releasing a prefeasibility study for the Cactus project, which outlined a $2.3 billion net present value (8%) along with an IRR of 22.8% and a payback period of 5.3 years based on $4.25 a pound copper. That valuation climbs to $3.3 billion at $5.00 a pound copper, while the IRR moves up to 28.7%.
The estimate is based on an operation that is expected to produce 99,000 tons of copper annually over a 22 year mine life, at all in sustaining costs of just $1.62 a pound. Initial capital is pegged at $977 million, while sustaining capital over the life of mine is estimated at $1.3 billion.
Arizona Sonoran Copper last traded at $5.08 on the TSX.
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