CEO.CA's Inside The Boardroom: Arizona Sonoran on Building America's Next Copper Mine with Hudbay and Royal Gold Backing

Arizona Sonoran Copper Company Inc. (TSX:ASCU | OTCQX:ASCUF) is poised to become a significant player in the US copper mining industry, with the backing of established mining companies Hudbay Minerals Inc. (TSX:HBM | NYSE:HBM) and Royal Gold Inc. (NASDAQ:RGLD). In an interview with CEO.CA, Arizona Sonoran's CEO, George Ogilvie, discussed the strategic partnerships and the company's plans to develop the Cactus Project into America's next copper mine.

Arizona Sonoran's Cactus Project is a brownfield site with a rich history of copper mining. The company acquired the asset from the Arizona Department of Environmental Quality in 2020 and has since been working to advance the project towards production. In 2022, Arizona Sonoran announced a strategic partnership with Hudbay, a well-established mining company with a strong track record in mine development and construction. Hudbay invested C$20.1 million in Arizona Sonoran through a private placement, acquiring a 9.99% ownership stake in the company (January 31, 2025 PR).



In addition to Hudbay's investment, Arizona Sonoran also secured a streaming agreement with Royal Gold, a leading precious metals royalty and streaming company. Royal Gold provided US$100 million in upfront cash in exchange for a 2.5% net smelter return (NSR) on the Cactus Project (November 17, 2022 PR). These strategic partnerships have significantly enhanced Arizona Sonoran's financial stability and accelerated the project development timeline.

The Cactus Project is expected to produce 86,000 short t/y of cathode production, which is equivalent to 172 million lb/y of copper, totaling 5.3 billion pounds of copper over a 31-year life of mine (LOM). The project's economic viability is supported by a post-tax NPV of US$2.03 billion and an IRR of 24% using a copper price of US$3.90/lb (August 2024 PEA).

Arizona Sonoran's strategic partnerships with Hudbay and Royal Gold have not only provided the company with significant financial support but also brought valuable expertise and experience in mine development and construction. These partnerships have helped Arizona Sonoran navigate the permitting process more effectively and build strong community support for the Cactus Project.

In conclusion, Arizona Sonoran Copper Company is well-positioned to become a key player in the US copper mining industry, with the backing of established mining companies Hudbay and Royal Gold. The company's Cactus Project is expected to make a significant contribution to the US copper supply chain, supporting the energy transition and the growing demand for copper in electric vehicles, solar panels, and wind turbines. With a strong financial foundation and the expertise of its strategic partners, Arizona Sonoran is well-equipped to bring the Cactus Project into production and generate significant value for its shareholders.

Rating: Buy.