Barksdale Resources Corp. (TSX-V: BRO) (OTCQX: BRKCF) is pleased to announce the positive results of a Preliminary Economic Assessment completed on the San Javier oxide copper-gold project located in Sonora, Mexico. The PEA envisions a modest capital cost project utilizing conventional open-pit mining with a solvent-extraction and electrowinning plant to produce LME-grade copper cathodes on-site. A copy of the PEA, prepared in accordance with the requirements set forth in Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects will be filed under the Company’s SEDAR+ profile within 45 days of this news release. All currency references in the PEA and this news release are in U.S. Dollars.

PEA Highlights

• San Javier PEA shows robust economics using a conservative base case copper price of $4.00 per pound.

• • 13-year mine life producing 209 million pounds of cathode copper via an on-site SXEW;
  • Conventional open pit mining with a very low waste to ore ratio of 0.66 to 1;
  • Life of mine average cash costs of $2.16/lb copper produced;
  • Pre-tax NPV (7%) of $111.8 million, with an IRR of 26.3% and payback of 3.8 years;
  • After-tax NPV (7%) of $61.5 million, with an IRR of 18.1% and payback of 5.3 years;
  • At $4.50/lb copper, the after-tax NPV (7%) increases significantly to $103.3 million, with an IRR of 24.8% and a payback of four years;
  • Low initial capital costs of $116.8 million; and
  • Excellent growth opportunities including resource expansion, assessing the potential for gold recovery, and run of mine processing.

Rick Trotman, President and CEO of Barksdale, states, “The results of our PEA on San Javier outline a very simple operation with compelling economics. This base-case provides the foundation from which additional economic upside can be unlocked, such as the significant resource expansion opportunities at the Cerro Verde orebody, exploration upside at Mesa Grande and La Trinidad, and additional metallurgical testing to recover gold. In today’s market it’s rare to find a simple development project with such low upfront capital costs.”

PEA Summary

The PEA, led by Tetra Tech Canada, was initiated in early 2023 and is based on the mineral resource estimate completed by Independent Mining Consultants Inc. in 2022. The PEA was completed in accordance with NI 43-101 and represents a significant milestone in the advancement of the project. The Company is currently earning a 100% interest in the San Javier project from Tusk Exploration Inc., a private British Columbia company.

Project Overview

The San Javier project is accessible from Hermosillo by a well-maintained paved two-land highway near the town of San Javier. The project consists of multiple showings of surface copper outcrops including the Cerro Verde resource area and the La Trinidad and Mesa Grande prospects.

The San Javier project will be a truck and shovel operation at the Cerro Verde resource area and will operate at a processing rate of approximately 10,000 metric tons per day for a 13-year mine life. Mined material will be crushed and transported to a heap leach pad. Copper will be recovered via an SXEW plant producing LME-grade copper cathodes on site.

Mineral Resource Estimate

The Mineral Resource Estimate for the San Javier project is based on a $4.00/lb copper price and the sum of tonnage and grades within the pit shell utilize a cutoff grade for soluble copper (acid-soluble plus cyanide-soluble copper), which varies depending on the oxidization type of each tonne of material. The table below highlights the Cerro Verde resource at San Javier:

Figure 1. San Javier Mineral Resource (Cerro Verde Deposit); effective date October 31, 2022

Recovery Methods

The mineralized material from the Cerro Verde deposit will be crushed using a three-stage crushing and screening system to produce a -12.5 mm material which will be stockpiled and then transported to a lined heap leach pad. The material on the heap leach pad will be irrigated with a sulfuric acid solution to extract soluble copper and the pregnant leach solution will be stored in a pond and pumped to a solvent extraction circuit to purify and concentrate copper in a strong electrolyte solution. The electrolyte will be fed to a semi-automatic electrowinning (EW) circuit to produce copper cathodes with a >99.99% purity.

The processing plant has been designed to process leach feed at a nominal throughput of 10,000 t/d to produce market-grade copper cathodes at site. The average LOM leach feed grade will be 0.34% total copper and the anticipated overall recovery will be 63.5% of total copper. The recovery estimate is based on metallurgical column test work that showed recovery of soluble copper of 85% in the leach cap and oxide zones, 75% in the mixed oxide/sulfide and 60% recovery in the sulfide zone.

Capital and Operating Costs

The estimated initial capital cost for the project’s design, construction, installation, and commissioning is $116.8 million. This figure includes all direct, indirect and owner’s costs as well as a contingency factor. The capital cost estimate is consistent with an Association for the Advancement of Cost Engineering (AACE) Class 5 estimate with an expected accuracy of plus/minus 35%. A summary breakdown of the capital cost is provided in the table below.

Figure 2. Capital cost summary

Sustaining capital costs are all required from Year 1 of operations to sustain the mining and processing operation for the life of mine and are estimated to be $17.22 million. The project operating cost estimate consists of mining, processing and general and administrative (G&A) costs and are summarized in the table below. The average life-of-mine operating cost is $10.17/t material processed, or $2.16/lb copper produced.

Figure 3. Operating cost summary

Financial Analysis

The project has been evaluated using a constant copper market price of US$4.00/lb. The base case pre-tax cash flow highlights a net present value at a 7% discount rate of $111.8 million, an internal rate of return of 26.3% and a 3.8 year payback period. On an after tax basis, the project an NPV of $61.6 million with an IRR of 18.1% with a payback period of 5.3 years. At a copper price of US$4.50/lb, the Project post-tax NPV increases to $103.3 million after tax with an IRR of 24.8% and the payback period is shortened to four years.

Figure 4. Sensitivity analysis of post-tax economics based on various long-term copper prices

Qualified Persons and Data Verification

Scientific and technical information in this news release has been reviewed and approved by independent ‘Qualified Persons’ as defined under NI 43-101, including:

Hassan Ghaffari, P. Eng. M.A. Sc
Herbert E. Welhener, SME-RM, MMSA
Maureen Marks, P. Eng.
Jiahui Huang, P. Eng., PhD

The QPs responsible for the preparation of the PEA have verified the data disclosed in this news release. The technical report in respect of the PEA, when filed under the Company’s profile on SEDAR+, will contain more detailed information concerning individual responsibilities, associated quality assurance and quality control, and other data verification matters, and the key assumptions, parameters and methods used by the Company.

Barksdale Resources Corp., a 2023 OTCQX BEST 50 Company, is a base metal exploration company headquartered in Vancouver, B.C., that is focused on the acquisition, exploration and advancement of highly prospective base metal projects in North America. Barksdale is currently advancing the Sunnyside copper-zinc-lead-silver and San Antonio copper projects, both of which are in the Patagonia mining district of southern Arizona, as well as the San Javier copper-gold project in central Sonora, Mexico.