Arizona Sonoran Positioning Itself to Be a Next Mid-Tier Copper Producer in US

• Arizona Sonoran Copper Company has substantially permitted project with existing infrastructure at the Cactus Mine site in Arizona.
• The company recently announced an updated mineral resource estimate of 7.4 billion pounds of copper.
• The prefeasibility study is on track for early 2024, with first copper production potentially by end of 2026.
• Metallurgical test work on leaching recoveries is well advanced and showing good recoveries so far.
• The company is focused on managing initial capital costs to be financeable as a standalone entity.

About Arizona Sonoran Copper Company

Arizona Sonoran Copper Company (TSX:ASCU) has rapidly advanced its 100% owned Cactus Project in Arizona over the past two years, putting itself in prime position to become a mid-tier copper producer in the next copper cycle. With copper demand expected to significantly outstrip supply in the coming decade due to electrification and decarbonization, bringing new copper projects online in mining friendly jurisdictions could prove highly lucrative.

Located in Pima County, Arizona, the Cactus Project benefits from first-rate infrastructure in a premier US mining jurisdiction. The project area has over 50 years of copper mining history, with extensive existing infrastructure already in place from the previous ASARCO mine operations at the site. Crucially, the project is already substantially permitted, de-risking the timeline to production.

Interview with President & CEO, George Ogilvie

In a major milestone announced in early October 2023, the company published an updated mineral resource estimate for the Cactus Project, boosting contained copper by 14% to a substantial 7.4 billion pounds. The global resource used a base case $1.35/lb copper cut-off grade.

Notably, the company has rapidly advanced its geological understanding of the deposit through systematic exploration drilling. This has delineated 5.2 billion pounds of copper mineralization that is amenable to conventional heap leaching and solvent extraction/electrowinning processing. Heap leachable ores provide a distinct advantage, enabling lower capital and operating costs.

The focus now turns to the prefeasibility study, targeted for release in early 2024. This will form the basis for a construction decision and financing. First copper production could potentially commence before the end of 2026, marking the transition to mid-tier producer status.

CEO George Ogilvie outlined an ambitious but achievable timeline, with an 18-24 month construction phase anticipated after project financing is secured in late 2024. The prefeasibility study will be based on a multi-decade mine life with average annual production of 45-50,000 tonnes of copper cathode (100 million lbs).

Metallurgical Test Work Demonstrates High Recoveries

Extensive metallurgical test work over the past two years provides confidence in achieving targeted copper recoveries. Test work on oxide mineralization indicates 90% copper recovery is achievable using heap leaching over a 60-90 day leach cycle.

Transition and enriched mineralized material is expected to achieve copper recoveries in the 75-80% range over a 200-220 day leach cycle. The company has carefully matched metallurgical samples with the mine plan and geological models, providing a robust basis for the prefeasibility study.

The initial mine plan will focus on the leachable near surface oxide and enriched material at Cactus West, Cactus East and the surface stockpile. This provides lower technical risk in the early years. The higher grade Park Salyer underground project will be brought online within the first 7-8 years to extend the mine life.

Innovative Leaching Technology Adds Optionality

In an innovative move, Arizona Sonoran is working with Rio Tinto's startup subsidiary NuWave on testing their proprietary leaching technology. NuWave utilizes a suite of patented chemical recipes and heat to leach copper from sulfide minerals, opening up primary sulfide resources to heap leaching.

Early stage column testing on Cactus primary sulfide mineralization has already demonstrated 61-81% copper recovery after 75-150 days leaching. While still at an early stage, this technology provides future optionality to economically process primary sulfide resources not included in the current mine plan.

Further test work and drilling will be undertaken in 2024 to understand this potential opportunity. But the prefeasibility will take a prudent base case approach relying only on the conventional heap leach resources.

Disciplined Approach to Capital Management

CEO George Ogilvie emphasized the company's disciplined approach to capital management to ensure the Cactus Project is financeable for a company of Arizona Sonoran's size. The prefeasibility mine plan has been optimized to limit initial capital requirements while still generating robust financial returns over an extended mine life.

This should result in manageable initial capital expenditure below $400 million, while creating a platform for future organic growth. The staged ramp up mitigates mining complexity and allows time to optimize operations before expanding production.

Arizona Sonoran ended Q2 2023 well funded, with C$32 million in cash and no debt. Major supporter Tembo Capital owns 31% and is fully aligned with management's strategy and pace of development.

The Investment Thesis for Arizona Sonoran Copper Company

With copper market conditions expected to tighten considerably by the time the Cactus Project enters production, Arizona Sonoran presents an attractive investment proposition. The company offers a combination of:

• Substantial existing mineral resource of 7.4 Blbs Cu with over 5 Blbs amenable to low-cost heap leaching
• Ideally located in Arizona, a premier US mining jurisdiction with infrastructure in place
• Substantially de-risked project that is already well permitted for operations
• Advancing rapidly to PFS in early 2024 and potential production start-up by end 2026
• Disciplined capital management approach to ensure initial CapEx below $400M is financeable
• Exploration upside to continue growing resources to support long mine life
• Innovative technology process with Rio Tinto provides optionality on primary sulfides
• Trading at deep discount to peers with opportunity to re-rate as milestones achieved
• Experienced management team to steer through studies and into production
• Supportive strategic institutional shareholder in Tembo Capital

Trading at only 2c/lb in situ copper value, Arizona Sonoran remains undervalued relative to peers. Advancement through prefeasibility is a key upcoming catalyst in unlocking fundamental value. The current share price presents a favorable entry point for investors positioning for the coming copper boom.