Arizona Sonoran's Strategic Drilling Advances Position Cactus Project as a High-Conviction Copper Play

The global copper market is entering a critical inflection point, driven by decarbonization mandates, electric vehicle (EV) adoption, and renewable energy infrastructure. In this environment, Arizona Sonoran Copper Company (ASCU) has positioned its Cactus Project as a standout opportunity, leveraging aggressive drilling campaigns and strategic resource upgrades to de-risk a long-life, low-cost copper project in a Tier 1 jurisdiction. With the Pre-Feasibility Study (PFS) and Definitive Feasibility Study (DFS) advancing in parallel, the Cactus Project is emerging as a high-conviction play for investors seeking exposure to the next generation of U.S. copper supply.

Resource Upgrade Potential: From Inferred to Measured

The Cactus Project's 2025 drilling program has delivered transformative results, with 232,000 feet of drilling across Parks/Salyer, Cactus East, and Cactus West. The focus on upgrading Inferred resources to Indicated and Measured classifications has yielded exceptional continuity in mineralization. For instance, the Parks/Salyer deposit saw 1,048 feet of continuous mineralization at 0.80% CuT in drill hole ECM-293, including a 333-foot enriched zone at 1.16% CuT. Similarly, Cactus East's ECE-305 intersected 761 feet of mineralization at 0.98% CuT, with a standout 48-foot interval grading 2.37% CuT. These results suggest a near-complete conversion of Inferred resources to higher-confidence categories, a critical step for bankability.

The implications are profound. By upgrading resources, Arizona Sonoran is not only enhancing the project's economic viability but also aligning with investor expectations for transparency and reliability. The 2024 Preliminary Economic Assessment (PEA) already projected a 31-year mine life with 86,000 stpa of copper cathode production, but the 2025 drilling data strengthens the foundation for these metrics.

De-Risking Through DFS Drilling: A Path to Bankable Feasibility

While the PFS is nearing completion, the DFS program is equally pivotal. With two rigs currently operating at Parks/Salyer, the DFS aims to reduce drill spacing to 125 feet (38 meters), targeting a Measured classification for the mineral resource. This level of detail is essential for securing financing and finalizing engineering designs. The DFS will also incorporate geotechnical and hydrogeological data, addressing key risks such as slope stability and water management.

The DFS's focus on primary sulfide leaching—supported by Rio Tinto's Nuton™ technology—adds another layer of de-risking. Column leach tests have already demonstrated 72% recovery from primary sulfides, a conservative estimate that could improve with further optimization. This aligns with the PEA's 73% total copper recovery rate, which includes 92% for oxides and 85% for enriched material. By validating these recovery rates, Arizona Sonoran is building a robust case for a heap leach-SX/EW operation with minimal capital intensity.

PFS Outcomes and Valuation Implications

The PFS, expected in H2 2025, will build on the 2024 PEA's $2.77 billion pre-tax NPV and 24% IRR at $3.90/lb copper. However, the 2025 drilling results and DFS data are likely to refine these metrics, potentially increasing the NPV by reducing capital and operating costs. For example, the PEA's $1.82/lb cash cost is already competitive with global peers, but further optimization of the heap leach flowsheet could drive costs lower.

The project's valuation is also bolstered by its brownfield status and streamlined permitting. Located on private land in Arizona, the Cactus Project avoids federal regulatory hurdles and benefits from existing infrastructure, including rail access and power from Arizona Public Service. This contrasts sharply with greenfield projects in politically volatile regions, where permitting delays and cost overruns are common.

Investment Thesis: A Tier 1 Jurisdiction Play

Arizona Sonoran's Cactus Project checks all the boxes for a high-conviction copper investment:
1. Scalable Resource Base: 2.87 billion tons of mineralized material with 0.46% CuT, expandable through ongoing drilling.
2. Low-Cost Production: $1.82/lb cash costs and $2.00/lb AISC, among the lowest in the industry.
3. Strong Economics: A 31-year mine life with $2.77 billion NPV and 24% IRR at $3.90/lb copper.
4. De-Risked Timeline: DFS completion by early 2026 and a shovel-ready project by 2027.

For investors, the key catalysts are the PFS release in late 2025 and the DFS in early 2026. These milestones will determine the project's path to construction and provide clarity on financing needs. Given the current copper price environment and the project's low-risk profile, Arizona Sonoran is well-positioned to attract strategic partners or debt financing.

Conclusion: A Copper Supply Chain Anchor

As the world transitions to a low-carbon economy, copper demand is projected to grow by 400% by 2050. Arizona Sonoran's Cactus Project, with its Tier 1 jurisdiction, scalable resource, and de-risked development path, is uniquely positioned to meet this demand. The company's disciplined approach to resource upgrading and DFS-driven de-risking makes it a compelling long-term investment. For those seeking exposure to the copper boom without the volatility of junior explorers, Arizona Sonoran offers a rare combination of technical rigor and strategic clarity.

In a market where certainty is a premium asset, the Cactus Project's progress in 2025 has transformed it from a speculative play to a high-conviction opportunity. Investors who act now stand to benefit from a project that could redefine U.S. copper production in the 2030s.