Kay Mine Project PEA: $-6M NPV, 4.9% IRR
Arizona Metals Corp.'s Kay Mine Project in Arizona, USA (74 km north of Phoenix) has a Preliminary Economic Assessment (PEA) outlining an after-tax NPV of $-6M, an after-tax IRR of 4.9%, and initial capital of $609M. The proposed mine plan runs 10 years.
Arizona Metals Corp.'s Kay Mine Project has reported Preliminary Economic Assessment (PEA) results for the copper-gold-zinc project in Arizona, USA (74 km north of Phoenix). The study headlines an after-tax net present value of $-6M at a 5% discount rate. It reflects Arizona Metals Corp.'s (AMC.TO) latest disclosed economics for the asset.
Economics. The after-tax NPV is $-6M using a 5% discount rate. After-tax IRR is 4.9%. Initial capital expenditure is estimated at $609M, with life-of-mine sustaining capital of $87M. The study models a payback period of 5.5 years. Economics are based on Base Case: US$4.70/lb Cu, US$1.27/lb Zn, US$3,100/oz Au, US$38/oz Ag.
Production and mine plan. The project envisions an underground (longhole stoping) operation. Life of mine is 10 years.
Resources and ownership. The company holds a 100% interest in the project. Royalties and streams: NO Royalties.
These figures are extracted from Arizona Metals Corp.'s technical disclosures and reflect the most recent PEA on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Reserves & Resources
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Indicated | 9.28 Mt | 1.39 g/t Au, 27.6 g/t Ag, 0.97% Cu, 0.33% Pb, 2.39% Zn, 3.18% CuEq | 415 koz Au, 8,253 koz Ag, 197.9 Mlbs Cu, 67.3 Mlbs Pb, 490.1 Mlbs Zn, 650.6 Mlbs CuEq |
| Inferred | 0.86 Mt | 1.06 g/t Au, 15.4 g/t Ag, 0.87% Cu, 0.2% Pb, 1.68% Zn, 2.44% CuEq | 29 koz Au, 423 koz Ag, 16.4 Mlbs Cu, 3.8 Mlbs Pb, 31.8 Mlbs Zn, 46.1 Mlbs CuEq |
Our Analysis
- IRR after-tax
- 4.9%
higher than 0% of 355 projects we track
- NPV after-tax
- $-6M
higher than 0% of 454 projects we track
- Initial capex
- $609M
costlier than 69% of 455 projects we track
- Payback
- 5.5yrs
slower than 94% of 288 projects we track
- Mine life
- 10yrs
- Discount rate
- 5%
- Study price assumption
- Base Case: US$4.70/lb Cu, US$1.27/lb Zn, US$3,100/oz Au, US$38/oz Ag
- Spot copper today
- $6.54/lb
A PEA that returns a negative after-tax NPV and a 4.9% IRR does not describe a mine that gets built on these numbers. It describes an option on higher copper. The study's base case assumes US$4.70/lb copper; spot today is $6.54/lb. That gap is the entire investment case, and it is the only reason to keep reading. At the assumed price the project does not pay back its own capital, and a 4.9% after-tax return ranks above 0% of the 355 projects we track: it sits at the very bottom of the peer set. Developers typically need roughly 15% after-tax to attract project finance, and 20%+ for a junior with little else in the portfolio, which fits this company. No financing structure bridges that gap.
The funding arithmetic is worse than the return. Initial capex is $609M against a company market cap of US$18M, so the build costs several times the entire equity. A nano-cap cannot quietly fund a project of that size; it needs a partner, a sale, or a re-rating large enough to make an equity contribution meaningful. The PEA stage compounds this: scoping-level work, potentially including inferred resources, with a capital estimate that typically carries a plus or minus 50% band. The mine life is short for the capital involved, and the payback ranks below 6% of the 288 projects we track.
Arizona is a mining-friendly jurisdiction with established permitting and infrastructure, and that is a genuine positive: it lowers execution risk and makes the asset easier to advance or sell. But jurisdiction cannot fix a return that fails at the study's own price. Everything here turns on one question: does copper hold near spot long enough for a reworked study at higher prices to clear the financing hurdle, or does this stay a stranded option on a nano-cap balance sheet?
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.