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 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. Spot case: US$6.05/lb Cu, US$1.57/lb Zn, US$4,745/oz Au, US$77.48/oz Ag..
Production and mine plan. The project envisions an underground 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 42 projects we track
- NPV after-tax
- $-6M
higher than 0% of 49 projects we track
- Initial capex
- $609M
costlier than 35% of 52 projects we track
- Payback
- 5.5yrs
slower than 90% of 40 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 case: US$6.05/lb Cu, US$1.57/lb Zn, US$4,745/oz Au, US$77.48/oz Ag.
- Spot copper today
- $6.51/lb
A 4.9% after-tax IRR is not a marginal shortfall; it is a number that cannot support a build. Developers typically need roughly 15% to attract project finance, and 20%-plus where the sponsor is a higher-risk junior with little else in the portfolio, which fits this company. Against the 42 copper projects we track, this one ranks above none of them. The after-tax NPV is negative at $-6M, so the study does not pay back its own capital on paper, and payback at 5.5 years sits below most of the peer set. A scoping-level PEA, carrying inferred material and a capital estimate with a plus or minus 50% band, deserves less confidence than a feasibility study, not more. Nothing has moved since the prior filing: NPV, capex, mine life and IRR are all flat, so there is no improving trend to lean on.
The funding arithmetic is the harder problem. Initial capex of $609M against a US$16M market cap means the build dwarfs the company's entire equity value many times over. A company cannot quietly finance a build of that scale; it would require a partner, a sale, or dilution so severe the current share count becomes almost irrelevant. Capex ranks lower than most peers, so the number is not outlandish in absolute terms, but relative to this sponsor it is unbridgeable alone. Arizona is a mining-friendly jurisdiction, which helps on permitting and execution risk, but a good address does not fix a 4.9% return.
The study's base case uses US$4.70/lb copper against a live spot of $6.51/lb, so there is real price upside embedded in today's market that the economics do not capture. Whether that closes the gap is the open question: higher copper, a materially lower capex, or a partner who can carry the build. Absent one of those, this does not get built.
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.
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