Faraday Copper jumps on BLM exploration plan approval

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Drilling at Copper Creek, Arizona. Credit: Faraday Copper

Faraday Copper (TSX: FDY) got the go-ahead from the Bureau of Land Management for the next phase of exploration at its Copper Creek project in Arizona. That pushed the stock to a 12-month high.

The approval unlocks 67 drill pads for testing open-pit and oxide targets, the company said in a press release. This comes from a ‘finding of no significant impact’ on the record of decision dated June 30. The Copper Creek approval was expedited under the current administration, Canaccord Genuity analyst Dalton Baretto said in a note.

“[It’s] reflective of momentum building in the US to secure domestic critical metal supplies,” a dynamic that “bodes well for future permitting efforts at Copper Creek as well,” Baretto said.

Faraday plans to design its next drill phase around these newly approved pads and target both sulphide and oxide mineralization in a program now free of permitting hold-ups, the company said.

Other critical-metal projects have won similar fast-track reviews under the Trump administration. On Jan. 15, 2021, five days before President Biden took office, the BLM issued a record of decision for Lithium Americas’ (TSX: LAC; NYSE: LAC) Thacker Pass lithium mine in Nevada. This followed Executive Order 13817, which directed agencies in December 2017 to streamline permitting for critical minerals.

Earlier this year, Trump used emergency powers to increase domestic lithium and nickel processing. He also ordered agencies to find US mines and lands for fast-tracked approval.

Last month, the US Forest Service posted a final environmental impact statement and draft record of decision for the in-state Resolution Copper mine, a joint venture between Rio Tinto (ASX, LON, NYSE: RIO) and BHP (NYSE, LSE, ASX: BHP). The move, dated June 16, advances the 2015 land-exchange mandate.

Drilling flexibility

The Copper Creek approval includes 48 pads in the American Eagle area and 19 in other locations. This gives management flexibility in planning future exploration programs, the company said. Faraday aims to define near-surface resources and explore potential oxide zones.

“This approval enables the drilling of numerous untested breccias within the American Eagle area, where recent drilling intersected many mineralized breccias and highlighted the potential for a large, near-surface resource to be defined,” Faraday president and CEO Paul Harbidge said.

Faraday expects to release an updated resource estimate and preliminary economic assessment by September. It will incorporate about 40,000 metres of drilling completed during earlier exploration phases.

Shares of Faraday jumped about 10% in Toronto Wednesday to a fresh 12-month high of C$1.00, taking their climb since January to more than 32%. The company has a market capitalization of C$203.5 million.

Big resource

Copper Creek holds a measured and indicated resource of 421.9 million tonnes grading 0.45% copper, 0.008% molybdenum and 1.1 grams silver per tonne for 4.2 billion lb. copper, 74.6 million lb. molybdenum and 15.5 million oz. silver. On a copper‐equivalent basis, the grade is 0.48% representing 4.5 billion lb. of combined metals.

Faraday holds 100% interest and controls a 78 sq. km land package that includes patented claims, unpatented claims, state prospecting permits and a 105.2 sq. km ranch with surface rights.

The project lies within Arizona copper country and links to road, rail and power infrastructure, including a 40 km rail link to Asarco’s Hayden Smelter. Asarco is a subsidiary of Grupo México.

Discovery upside

Copper Creek also holds discovery potential. Faraday discovered the Area 51 breccia in January last year and the Banjo breccia at American Eagle in August. Exploration upside includes over 320 breccias at surface, of which fewer than 15% have been drilled. Only 17 are defined in the current resource model.