NorthIsle Copper & Gold (NCX) - Ambition, Scale, Timing and Financing
NorthIsle Copper & Gold is a Canada-based mineral exploration company. The Company is engaged in the exploration and development of its North Island Project on Vancouver Island. The North Island Project claims are located on northern Vancouver Island from 15 to 40km southwest of Port Hardy. This project contains various copper-gold porphyry systems. The primary metals in the North Island Project are gold, copper, molybdenum and rhenium.
We caught up with Sam Lee, President & CEO of NorthIsle Copper and Gold which is a new story for us and one which we are keen to understand better.
NorthIsle Copper & Gold is setting out to be the leading sustainable mineral resource company for the future. They own a 50km stretch of a Copper-Gold porphyry trend on Northern Vancouver Island and have just released a PEA that suggests this project has approximately 5Bn lb of Copper equivalent and about 9.3Moz in Gold equivalent. It is approximately a 22-year life-of-mine with 150Mlb of Copper equivalent production per year for 22-years, and 300,000oz of Gold equivalent production per year.
History & Background of NorthIsle
This asset was almost purposely orphaned over the last 9-years as the Copper markets retracted but now that the Copper market is looking exciting, it is the time for NorthIsle to advance this project as quickly as possible. The project is a good project at $3/lb for Copper and a very good project at $3.25/lb Copper, which is what the PEA was established on. Right now, Copper is at about $4.50/lb which is great for the project.
Lots of Potential, so Where's the Disconnect?
The NorthIsle share price has been on the rise and is up around $0.30 which is linked to the rise in the Copper price. Their project is on the northern tip of Vancouver Island where there has been a lot of industrial activity in the past. BHP owned and operated the Island Copper Pit, which is just adjacent to the NorthIsle mine, about 24km away and the deposit has the same signatures, same types of concentrates, same types of mineralisation, very similar size to the plans for the NorthIsle deposit.
The community is very supportive of this mine and Port Hardy is known for mining, fishing, and logging. There are other mines, active mines, in the vicinity that use Port Hardy and Port Alice as part of their focal point. The First Nations have been supportive of the NorthIsle project and of the infrastructure that BHP left and NorthIsle plans to be focused on developing the relationship with all 3 First Nations groups that are involved.
Board & Team Experience, Remuneration, & Shareholding
NorthIsle Copper and Gold has recently recruited Kevin O’Kane who spent almost 40-years at BHP, 37 of those years were spent developing some of the most formative mines in the world, operating and expanding Escondida, Spence, Cerro Colorado, but he was the chief mining engineer for the Island Copper mine that sits adjacent to the NorthIsle deposit. Kevin is on the board of NorthIsle Copper & Gold.
NorthIsle is continuing to grow the team. Nick Van Dyk spent 10-years as an investment banker and publishing analyst. He then became an executive at Polaris. Nick has developed relationships and an understanding of how to do business with First Nations in the region. Community relations with First Nations are absolutely critical in developing this mine for NorthIsle and they now need to focus on the environmental, social, and sustainability factors of this project and the market will shortly see some developments on that front.
The management team owns approximately 19% of the outstanding shares on a fully dilutive basis. Their chairman is the largest shareholder at approximately 13%. It is important to the company that they choose the lowest-cost financing alternatives for every stage gate and have a very disciplined capital allocation programme.
Business Plan, Model, & End Goal: Strategies for Projects
The PEA suggests that at $3.25 Copper, the project is a CAD$1.1Bn project with approximately 19% IRR for a 22-year mine life project. The economics show a low-cost project due to the infrastructure that is in place from the BHP’s Island Copper Pit. The project has low strip ratios and significant factors that make it economical and worthwhile advancing to the PFS.
There is also an exploration element with the Pemberton Hills project and they have just raised $10M for the drill programme there. NorthIsle also plans to enhance their project at the higher-grade, lower-strip portion of the Red Dog project, focusing their drill programme there over the next few months. There are plans to expand out Hushamu, which is very easily expandable to a size that will attract the majors and get them to over 1Bnt of resources.
$10M Raised & Plans for Allocation: Why More Exploration?
NorthIsle Copper & Gold plans to spend approximately half the $10M on exploration at the larger Hushamu deposit and the smaller, higher-grade, lower-strip deposit called Red Dog. They are working to advance the PFS on the project and are progressing it. NorthIsle has a 50km strike length which starts from the Island Copper Pit around unexplored territories on some appealing targets. The exploration will inform how the company moves ahead with the project and the company as a whole.
The step-out drilling will continue the deposit to the southeast and they expect to grow that tonnage to over 1Bnt. Once they have that in place they will make decisions as to where to locate the mill, the tailings facility, etc.
Importance of Sustainability
In BC, NorthIsle has access to 100% Hydro and Wind Power and their project has BC’s largest Wind power farm to the north of their project, which has more than enough capacity to satisfy their requirements. They have the ability to contemplate electrification of haulage trucks, with trolley assist because they’re an open-pit mine. Having access to this clean and cheap power, with the intent of creating a project that has a low footprint which could potentially be Carbon neutral net 0, is something that is in their vision over the next few years.
As NorthIsle is dealing with Copper, they must show their commitment to sustainability as they are feeding into an electric revolution and the whole supply chain needs to deal with CO2 emissions.
NorthIsle believes that their project is one of the most developable projects in Canada and potentially in the world. It’s a project that they are committed to with the highest standards of sustainability, and are committed to the First Nations partners and community partners. The project is going to advance quickly and they are also spending time on the drill bit to ensure that they are adding value immediately for shareholders.