With its principal Antler and Javelin projects located in northern Arizona, New World Resources benefits from a jurisdiction marked by excellent security of tenure and support for development. The company's investment proposition is made additionally compelling in that, at 4.1%, it owns one of the highest-grade copper deposits in the world on a copper equivalent basis.

VMS advantage

Managing director and chief executive, Mike Haynes, explained that five years ago the ASX-listed junior had deliberately set about finding a high-grade volcanogenic massive sulphide (VMS) copper deposit that could be taken into production in the second half of the 2020s, anticipating higher copper prices would be kicking in at that juncture. The company is on track to do just that with the now rising spot price providing vindication of its approach.

Historical exploration in the 1970s illustrated the Antler deposit was likely to be part of a much bigger system, and so when New World Resources acquired the rights to it in March 2020, the company sought to confirm that hypothesis. After three years of continuous drilling and two resource updates, a high-grade resource of 11.4Mt at a grade of 2.1% copper, 5.0% zinc, 0.9% lead, 32.9g/t silver and 0.36g/t gold (or 4.1% copper-equivalent) was defined. Mining studies have since illustrated this can translate to an initial 13-year life of mine (LOM).

Haynes emphasised advantages VMS-type deposits like Antler afford juniors like New World Resources, over the big porphyry copper deposits favoured by the majors. VMS deposits are smaller yet higher-grade, so they require less development capital and can be brought to production faster and with higher margins, all of which can be managed by the operator, rather than being dependent on other parties for funding and/or management who may have different corporate objectives and timelines to production, he explained.

Win-win

He described Antler as "underpinning New World Resources' value", and considers that any other high-grade deposits within about a 100km range, including those in the Javelin Project area, as providing scope to enhance the development of Antler.

With a 13-year baseline LOM established, any additional high-grade ore discovered within trucking distance of the processing plant earmarked for Antler would have a material impact on the life and/or the economics of not only the Antler project, but also any satellite project, such as Javelin (which is 75km away). Ore discovered at the latter could be trucked to the plant at Antler, or if defined resources were sufficiently large, a stand-alone processing facility could be established, Haynes indicated.

As to the confidence level regarding Javelin, six past producing very high-grade VMS deposits in close proximity have provided New World Resources with good reason to believe the land position it has built there will lead to the discovery of additional high-grade mineralisation.

Sweet spot

Haynes described Antler as being "about as good as it gets from a local jurisdictional perspective".

With no surface water, very few people, and negligible shared land use in the area, headaches are few. Moreover, the deposit sits on private land the company owns, where all the infrastructure needed to mine Antler will be sited. The operation is set to be very compact, with environmental and social impact minimised by developing only an underground mine, and by using dry stack tailings, which is deemed best practice in Arizona. In addition, 50% of the waste product will be put back underground as paste fill.

Haynes added, "Fortuitously, all of that is happening within 15km of an interstate highway; within 15km of transcontinental rail; 50km from a town of 30,000 people; and within 700m of mains or grid power."

Additionally, thanks to long-established relationships in the US, unlike some of its peers, New World Resources has had no problem recruiting suitably skilled personnel, despite a shrinking labour pool that is lingering in the COVID-infused landscape affecting the wider mining sector.

Milestones

Haynes described one of the company's key objectives on the path to production as having already been satisfied, this being the application for a mining permit from the federal government, which it anticipates will be the permit with the longest lead time before approval. Given that impact on federal lands will extend only to running trucks and a temporary water pipeline across them, approval is set to be a formality.

While this federal permit application is being processed, in parallel the company will be applying for relevant state permits, such that, progressively, through 2024 and 2025, it will have a series of permits approved, thereby de-risking the project from an investor perspective.

Exploration potential

VMS deposits like Antler typically occur in clusters. And 6km distant from Antler is another smaller VMS deposit called Copper World. New World Resources holds all the mineral rights between these two deposits, and within this corridor lie multiple high-quality targets where it is believed additional high-grade mineralisation could be discovered. These are currently all virgin, untested targets. But a new drilling programme has just begun, commencing with the high priority Bullhorn target, and likely to be followed by testing of the Cowhorn, Longhorn, Rattlesnake Ridge, Copper Knob, Insulator and West World prospects.

Maximum value

With over $8 million cash at bank at the end of December 2023, Haynes identified New World Resources as having "good cash reserves". He is nonetheless committed to exercising prudence as the company continues to undertake further exploration and advance Antler into production. He described the approach to financing as "a deliberate balancing act between using the financial resources that we've got to maximise shareholder value and minimise dilution before we go back to the market to raise additional cash".

Importantly, study work to date has illustrated the Antler project has extremely robust financial metrics at prices lower than today's spot price. The takeaway here is that, while higher commodity prices would lead to increased revenues, unlike many of its peers New World Resources need not wait for higher prices before it commences production.

Notwithstanding that, Haynes is very confident that a protracted period of higher copper prices is just around the corner. He pointed out that not only has there been chronic underinvestment in the sector, but that high-profile mine shutdowns combined with it being impossible to build mines quickly enough to address supply shortfalls is creating a perfect storm of market forces. As such, the company is well placed to capitalise.

For Haynes and his team, this imminent window of opportunity is driving its two-pronged strategy to maximise returns for New World Resources' shareholders. Namely, to get Antler into production as soon as possible, while concurrently pursuing additional exploration success to increase the resource base.