Hello and welcome to Virtual Investor Conferences on behalf of OTC Markets. We're very pleased you joined us for our two day Metals and Mining conference. Our next live presentation is from Arizona Sonoran Copper Company. Please note, you may submit questions for the presenter in the box to the left of the slides and you can also view a company's availability for one- one meetings by clicking Book a Meeting in the top toolbar. At this point I'm very pleased to welcome George Ogilvie. He's the President and Chief Executive Officer of Arizona Sonoran Copper Company which trades on the OTCQX Best Market under the symbol ASCUF and on the TSX under the symbol ASCU. Welcome back George.
Thank you, John, and thank you to the OTC for the opportunity to present here today. It's American Copper Cathode for American industry and we're advancing the Cactus Project in Arizona. We do make some forward-looking statements in the presentation, so I'll draw your attention to the cautionary language. This presentation is on our website, so please feel free to review the cautionary language at your own leisure. Copper Cathode in the U.S. is quite relevant obviously given all the talk of tariffs and obviously it's a critical metal at the right time for expanding demand and we believe further supply constraints. We think as time progresses, copper is going to become even more to the fore for investors.
The nice thing about this project is it's looking at two large open pits, one of them a completely new greenfield development on private land and the other one a layback of a former producing mine which was known as the Sacaton Mine in the 1970s and 1980s when it was in production. Today, we call that Cactus West. We put out a preliminary economic assessment last year in August. We used a $3.90 copper price flat throughout the model and we realized an NPV8 after-tax of $2 billion and an IRR of 24%. Bear in mind today that the LME copper price is around $4.40 and on COMEX with the arbitrage and the premium being paid, we're looking at prices that are in and around $5.80. The nice thing about this project is it's state permitting only, there is no federal nexus when it comes to the permitting.
That really gives us defined timelines and a procedure to follow when we get the permits amended and we're in the midst of completing a pre-feasibility study. We anticipate that the high-level results in a press release will come to market in the next couple of months. We have 45 days to file the technical report on SEDAR. As you may know, Hudbay is a 9.9% shareholder in the company. They got involved last year, August, after we put that PEA out, they asked us if they could come into our data room to conduct due diligence with a mind to putting a strategic investment into the company. They completed four months of due diligence and then in December of last year, I was contacted by their CEO Peter Kukielski to discuss putting in a strategic investment at that time.
In January, they put in CAD 20 million at $1.68, which was conducted at a 15% premium to the five-day VWAP. Today we're trading at around CAD 2.50 . They've already made a sizable uplift in their investment. Hudbay is really known as a very good mine- operator and a mine- builder, and we believe this gives the project a lot of confidence. Their investment in the company, Royal Gold got involved last year in the fourth quarter when Tembo Capital, a private equity group who were involved with the company very early on when we required seed money, took a 2.5% NSR. They ultimately bought that 2.5% for $55 million .
I think the key message here again is that royalty companies of the ilk of Royal Gold will not invest in projects if they don't have a high degree of confidence that they're going to realize cash flows. It's another big vote of confidence for the project and the management team when top quality companies like Royal Gold are involved. We have our investment from several years ago with Rio Tinto and potentially utilizing their NEWTON technology on our primary sulfides. They still remain strong supportive shareholders of the company and the management team today. Some more KPIs that came out of the PEA last August was a five-year payback, over $7 billion of unlevered free cash flow. The upfront capital on this project is extremely low because we're situated in an area that really is supported by world-class infrastructure.
$668 million inclusive of 15% contingency, which gives us a very healthy NPV to CapEx of 3 to 1. You'll notice as well that with every $0.50 increment in the copper price, the NPV moves by $700 million and the IRR by 5%. At $4.50 we're looking at a project that approaches $3 billion and an IRR after - tax of a very healthy 30% and close to $10 billion in unleavened free cash flow. The PFS is currently 80% complete. Our goal within the PFS is really, in the first 20 years, to mirror the same production profile that we saw within the PEA. If we're able to achieve that, and I suspect the PFS will go out probably with a $4.25, we expect that the economics will be in line with what we saw within the PEA some eight, nine months ago.
As we touched on earlier, we're on private land. There's no federal nexus. The way it works then with the permits is that when we apply for an amendment to a permit, once the application is administratively accepted, and that can take a few weeks to a couple of months, but once it is, it basically starts a clock ticking and within six months the state regulator or the municipality must give us by law a response to our permit. The mine is fully permitted today as per a PEA from 2021. That was part of a qualifying document for the IPO and at that time it was only an 18 year mine life and 28,000 tons of cathode production a year. Obviously, the mine has significantly grown in size and scale since then.
We have been amending the permits over the last three years. We have amended the aquifer protection permit and the industrial air permit. In both cases, once we made the application, the industrial air permit took four months and the aquifer protection permit amendment only took five months to complete. We are close to a community of Casa Grande and we get a very strong social license and lots of support from the local community. After the PEA went out last August, we waited two to three months until the news of the PFS had been disseminated into the local community. We then went out and did our third perception survey within the community and Pinal County where the mine is located.
We found the favorable rating went up from an already very high 83% in actual fact up to 87%, which is very, very good news for the shareholders of the company. A little bit more about the attributes that the project has. We have water rights to the year 2070. There is an abundance of water naturally in the ground in a natural aquifer on the basement fault. Importantly, the basement fault sits below all of the mineralization and we have wells in the basement fault that actually date back to the 1970s and 1980s. Because this was a ASARCO water source, pumps and piezometer's are in those wells. We measure the volume and the flow rate of all the water and we're able to see that we have more than enough water for all of our business needs based on the PEA.
We expect the same to be true for the PFS. The other thing to note is that that water source is only permitted for industrial use, meaning that farmers and ranchers, unless they treat the water first, are not able to bore into that and use it for livestock or farming purposes given we don't want it going into the food chain. We also have a main power line running through the site, 69 kV. We already have a substation there, we're tied into the line. That power comes from the Palo Verde Nuclear Generating Station in Phoenix, about west of Phoenix. These are attributes that we won't have to actually build and put that upfront capital into. There's also a rail line in on the property because ASARCO actually shipped out concentrate from here in the 1970s and 1980s.
We've got the ability to eventually bring in all of our supplies, including sulfuric acid via rail, and take our cathode out to market via rail, which will help minimize the carbon footprint and the greenhouse gas emissions from the project. It's a state-led process. Private land, brownfield site, permitting on this project is not going to be a challenge. A little bit about the schedule and plans going forward. We would anticipate that sometime towards the end of August we will come out with a mineral resource estimate. All of the infill drilling to the indicated category was completed in June of this year, and we're in the process now of receiving the final assays. MRE goes out in late August. We would anticipate the press release for the PFS goes out in September, and then in October we file the technical report.
Upon the completion of the PFS, we immediately go into a bankable feasibility study, and we're anticipating that that'll take between nine to twelve months to complete. It's going to take us to the third quarter of 2026. Now on the permits, once the PFS is completed, we will make the applications for the final amended permits that we actually intend to build the mine upon. If we assume those applications go in in late October and they're administratively accepted in January of 2026, the six-month clock starts ticking. You can see that in the summer, early third quarter of 2026, we'd be in possession of the final permits required to build the mine. We've also announced to the market that we've engaged Hahn & Partners as our project financial advisors out of London and the U. K. .
Just last week we were meeting with ECAs, commercial banks, and some of the secondary tier lenders who would be very interested in providing project financing, particularly on the debt side. We really see that process starting up in earnest. After the PFS is out, groups will come into our data room under NDAs and then in the first half of next year we'll have a much smaller group, we'll engage an independent engineer and our goal is to announce project financing ahead of the bankable feasibility study in the third quarter next year.
The capital intensity of this project, if we're doing 100,000 tons of cathode production a year and we're under $1 billion of upfront capital, you can see the capital intensity would be under $10,000 a ton of cathode, which puts us at the leading edge of all copper projects in North America and probably around the world. If you look at the rhomboid on that chart in front of you, you can see the production profile is in the upper half compared to other projects in North America. A CapEx of sub $1 billion again is very light compared to what we see in the markets. We've seen great share price performance really since the beginning of this year. The stock is up some 70, 80%. If you think about the market cap of the company today, we're still only valued at around $320 million.
That's against an NPV on the PEA of a $2 billion NPV after tax. By my math that means that we are trading still at under 0.2 times price to NAV. Now when you look at the analysts report, given they use a higher discount factor, they normally inflate the capital, they inflate the operating costs, they push out production by one to two years. They have us on an NPV of $1 billion - $1.5 billion, which gives us a sort of price to NAV of around 0.3 times. When we look at our peers, we see our peers trading at anywhere between 0.4 up to 0.9 times price to NAV.
I believe on the back of the PFS results, provided we can hold results similar to what we saw in the PEA, then I'm expecting once the market gets this news, management has the time to promote the information and it disseminates throughout the market. I'm expecting a further big rewrite of this stock over the next three to 12 months. Very tight share capital structure. Still only 178 million shares issued. Importantly, no debt, no warrants, fully diluted $188 million, $62 million cash in the bank, in excess of CAD 80 million . We are fully funded throughout the entirety of 2026 and as I described with the schedule, we anticipate announcing bankable feasibility study project financing permits in hand in the third quarter of next year. We're fully funded all the way through to final investment decision.
We have eight analysts covering the company and the target price over the next 12 months is around CAD 3.93 , which obviously is still a significant uplift from the $2.50 that we're trading today. As you've heard me say before, it's important that management have some real skin in the game. I participated in the last bought deal and since the IPO I've invested CAD 3 million of my own money at a weighted average price of CAD 2 . Just to finalize, it's a high value proposition. It's a large copper porphyry system. You've got a management team here with a proven track record of delivering exceptional results for shareholders in prior projects, prior companies. I think Arizona is a tier- one location. We will have future exploration success given what we've seen from prior drilling that ASARCO had in the property some 40 years ago.
The PFS is trying or attempting to mirror the production profile of the PEA, which was extremely robust. The economics look very attractive and we believe this project is project financeable and it's a low risk project. It's a brownfield site, a known entity. There was a formerly operating mine there. It's open pit mining with low execution risk. Substantial permitting is in place and of course, as we touched on, we have a very strong social license from the county of Pinal County and the city of Casa Grande. That completes the formal part of the presentation today and I'm going to now switch over to some of the Q&A and I'm going to go through some of the questions that we have here.
We have a question here as to how do you see that spread of copper price between LME and COMEX to play out going forward? It's a very difficult one. Obviously COMEX pricing is higher today because of all the physical metal being moved physically onto COMEX. It's uncertain whether we would see that in the next couple of years when this mine starts to come into production. We would see first Copper Cathode. I think my response to that would be that if this project looks very, very robust and generates significant returns at $4.25 long term copper, if we were fortunate enough to see anything north of $5.50, then obviously the economics are going to be completely off the chart. That would be extremely good news for us and the shareholders. We can't bank on that. We have to take a much more conservative view going forward.
There was a second part to that question: will that influence development plans for the mine? No, it won't. As I said at this early stage, we're using very conservative numbers. If we can justify doing project financing and building the mine with those conservative numbers and we see something much higher, then obviously that's the cherry on the cake, that's the gravy that we'll be looking for going forward. Got a question here. Is there any potential financial assistance from any level of government? There certainly is. I mean obviously we've been speaking to various groups like the Department of Energy, Department of Defense, USX, and over the last couple of years there is some ability to tap into federal monies.
The one thing I would say we have to be careful with on this project, and those groups could not answer that question, was that given we're on federal land and there's no federal nexus, if we tap into federal money, does that therefore mean that we have to go under some form of federal review? We haven't received any clear answer on that at the moment. I'd hate to take $20 million or $30 million of government money and then get, you know, trapped in a sort of one to two year federal process and opened up Pandora's box. I think the beauty of this project is it's all on private land, there's no federal nexus and the permitting in my opinion really is a negligible risk. Why jeopardize that? In saying that, we will pursue those avenues to see if that could be part of a further larger project financing.
I've got another question here saying is the high cost inflation we are seeing lately affecting the CapEx. We've gone out for requests for proposals. We're about 80% complete with the PFS. A lot of the quotes have come in. We have seen some marginal increase in the CapEx numbers and some of the operating costs. Nothing that really we should be concerned about. As I sort of touched on earlier, we anticipate that we won't use table $3.90 long term. Copper price, we think probably $4.25. Long term copper price is something that the market would support. We've seen other groups go out with technical reports recently and use numbers in and around that range.
I think what we're likely to see is some of the inflationary pressures we're seeing as we get these quotes in is going to be offset by the $4.20 copper price that we're likely to use in our modeling, which I think is more than fair and probably gives us a very good outcome still for the shareholders of the company. We've got a question here, kind of follow on from what I've just described. The PFS will be valued at $4.25 and we have understood that the NPV will be very similar to $2 billion and the at PEA. Why would they get worse if their copper price was the same as in the PEA? As I said, we have to go out for quotes on all of the equipment and some of our large operating costs like sulfuric acid. We are seeing inflationary pressures.
That's fairly typical when you go from a PEA to a PFS and then further the bankable feasibility study as you do more detailed engineering. Even if there weren't inflationary pressures, you always find that the costs escalate. As I said, in this scenario we still believe that we can come out with a very good result for the PFS, for the shareholders of the company. I've got another question here that would you consider selling the company if the right offer comes in? I'd have to say at this juncture in time, no. The company is significantly undervalued and we really need the opportunity to get the PFS out and hopefully get a re-rate on the back of that. We've got some further opportunities. I think that we'll be able to show in the opportunity section of the PFS so that there could be further upside on this project.
Obviously one of them would be if the primary sulfide technology with NEWTON, if that were to be successful, that could add further accretion to what is already going to be a very robust business plan. We've got a question here which I think I touched on in the presentation, but it's asking what about the milestones over the next 18 months. Just to recap, we anticipate that in August we'll come out with a mineral resource estimate update. We'll put out the high level PFS press release in late September. October we'll file the technical report. We'll move into bankable feasibility study. That's nine to 12 months. That'll come out in the third quarter, second half of 2026. At that time we'll be announcing that we have the final permits in hand with that application process starting up late this year.
We will also be announcing in the third quarter of next year that the project financing, particularly the debt side of the equation with the commitment letters, is in place. It is going to be an extremely busy six - 18 months for the company. If we can continue to execute on our goals and objectives, there is a big re-rate coming on this company in the short-t erm. Given we're only valued at $320 million today on a $2 billion NPV project with Copper Cathodes and the United States of America. I've got another question here just asking on the status of the NEWTON technology. The phase two column tests are currently underway down in Bandura in Australia. They started up in the fourth quarter of last year. We've seen some of the preliminary results and some of the columns look very encouraging.
These columns are 20 foot in height and mirror more of the leach pad design. Considering we're looking at a 20 - 30 foot stack height, we won't get the final results of the columns until the end of this calendar year. Therefore, the PFS that comes out will be a pure standalone PFS. If the results from the columns look very encouraging, then at NEWTON's request we could conduct a NEWTON integrated PFS, which is essentially where we take the results from the NEWTON recovery extraction rates. NEWTON provides us with the additional capital and any additional operating costs that would be required in order to use their technology on the primary chalcopyrite, and we would then layer in on top of our standalone PFS.
As I said, we believe if the technology works then it's going to add further accretion and further value for the shareholders of the company. Lastly, I've got a question here just saying about NEWTON's shareholding has remained stable at the last capital raised? Yes, NEWTON maintains their investor rights agreement if they maintain a 5% equity shareholding or above in the company. Prior to the last raise they were at 7%. They did participate prior to that to maintain their 7% position. On this last raise they didn't participate. They were diluted down to 6%. Given it was final money in the door and they maintained their investor rights agreement, I don't think anybody should read too much into that, perhaps they're not supportive of the project Copper Cathode in the U.S. at over 100,000 tons of cathode production a year with at least a minimum of 20- year mine life is going to be very, very attractive not just for the mid tiers but also the seniors, particularly with what's going on from a geopolitical perspective not just in the U.S. but around the entire world. We're trying to gain access to critical minerals, of which copper is one of those. I see that we're out of time. I'd like to thank OTC again for giving us this platform and opportunity to present today. I'd like to thank everybody for coming in and giving us some of your valuable time in following the company. If you have any further questions, please don't hesitate to reach out to myself and Alison. As you can see, our contact details are on the last slide of this presentation. I'd like to thank everybody.
Details are on the last slide of this presentation. Have a great day. Thank you.