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SV Rating: Bottom-Fish Spec Value - as of December 30, 2022: Northwest Copper Corp is the combination of two former KRO Favorites, Serengeti Resources Inc and Sun Metals Corp, which merged on March 5, 2021 on terms where Serengeti undertook a 2:1 rollback and Sun Metals merged with the resulting company on a 0.215 NWST share for 1 Sun Metals share. Sun Metals was a Bottom-Fish Spec Value rated 2020 Favorite at $0.23 but it was downgraded to Poor Spec Value on Oct 2, 2020 when it became apparent that the Stardust project was not delivering anything new. Serengeti, in contrast, which was started as a Bottom-Fish Spec Value rated 2020 Favorite at $0.185 was upgraded on October 8, 2020 to a Fair Spec Value rated Favorite at $0.355 based on news that the East Niv copper-gold prospect had turned into a compelling porphyry target that would be drilled for the first time in 2021 (see Tracker October 8, 2020). The merger deal was announced on November 30, 2020. Serengeti was continued as a Fair Spec Value rated 2021 Favorite at $0.39 on December 31, 2020 which adjusted to a $0.78 cost base when Serengeti and Sun Metals merged. The merger created synergies in several areas which effective May 17, 2021 justify upgrading Northwest Copper Corp to a Good Spec Value rated 2021 Favorite at $0.80. The first issue was that neither Sun Metals' Stardust nor Serengeti's Kwanika projects in central British Columbia had sufficient critical mass to be developed as standalone mines, Stardust as an underground only high grade copper-gold-silver CRD style mine, and Kwanika as a combination open-pit/underground mine most of whose output would be underground mined. Stardust, which started off with the Canyon Creek resource of 2,970,000 tonnes at 1.27% copper, 1.68 g/t gold and 32.6 g/t silver, spurred excitement in 2018 with the late season discovery of the higher grade 421 Zone. Drilling over the next 2 years connected the 421 Zone to the shallower Canyon Creek zone and revealed that the 421 Zone tapered to a vertical depth of 900 m. Whatever additional zones exist, they will be deep and expensive to find. On May 17, 2021 Northwest Copper published an updated resource estimate which more than doubled the indicated and inferred resource to 7,806,100 tonnes at 0.97% copper, 1.24 g/t gold, and 21.8 g/t silver. The Central Zone at Kwanika has an open-pittable M+I+I resource of 110.3 million tonnes at 0.23% copper, 0.21 g/t gold and 0.77 g/t silver, and an underground mineable M+I+I resource of 203.6 million tonnes of 0.25% copper, 0.31 g/t gold and 0.92 g/t silver. Serengeti had published an updated PEA for a 15,000 tpd scenario in April 2017 that it planned to upgrade to a PFS by Q4 of 2019 with the help of an $8.2 million investment by South Korea's Daewoo (controlled by Posco) to earn 35%. However, the PFS was never delivered and Daewoo, which had vested for 35%, declined to participate in a 2020 expansion drill program. Daewoo was interested in Kwanika becoming the central processing hub for a number of smaller copper mines in the region, but is no longer interested. It is now looking for an exit for its diluting 33% Kwanika stake. The merger allows the Kwanika and Stardust properties to be consolidated into a single project, subject to buying out Daewoo, possibly through a paper deal later this year when NWST is trading at a better price. The two deposits are only 7 km apart. Although Stardust is CRD hosted massive sulphide mineralization while Kwanika's Central zone is disseminated porphyry style mineralization, initial metallurgical studies indicate similar flow-sheets with neither feedstock containing any deleterious elements. The new plan is to redo the 2017 Kwanika PEA as a 15,000 tpd processing facility fed with higher grade underground mined ore trucked from Stardust and blended with ore initially from the open-pitabble portion of the Central zone and ultimately with block-caved ore from the underground portion. NWST is starting a 7,200 m infill drill program costing $4.2 million to upgrade the shallower high grade underground portion of the Central Zone. The program will also test some satellite targets to the south of the Central Zone that Serengeti did not test in 2020. It will also do metallurgical studies to define a flow-sheet for the blended ore feeds. CEO Peter Bell expects it will cost $2 million to deliver a PEA by early 2022. The other main issue has to do with people. The driving force behind Sun Metals was Mark O'Dea, but he lost control of the narrative to Steve Robertson and Don McInnes who adopted a disclosure strategy of reporting only what happened 6 weeks ago and not outlining what was coming up. This alienated the Sun Metals shareholders who learned to sell before any news was due. Robertson and McInnes are not part of the NWST team. David Moore was the driving force behind Serengeti, but while he was excellent at telling the exploration story and executing technical work, he was a toiling geologist who had little stroke with the institutional audience needed to fund a feasibility demonstration project like Kwanika. Serengeti always just barely had enough money to fund its programs and not much success at getting positive market upticks to stick. As part of the merger deal O'Dea secured a $10.35 million bought deal for Sun Metals, and once the 2 companies were merged, he raised another $13 million in March 2021, bringing current working capital to about $21 million with 124.9 million issued and 146.4 million fully diluted. David Moore retired as CEO while remaining on the board, and Peter Bell, a geologist who worked 12 years for Newmont dealing with advanced projects, was brought in as the new CEO. Northwest Copper now has a well rounded management team that covers all aspects to operate a hybrid company engaged in feasibility demonstration for the Kwanika-Stardust project and discovery exploration at projects like East Niv which Dave Moore brought to the drill ready stage in 2020. While Kwanika-Stardust provides the fundamental value which allows Northwest Copper to serve as a proxy for the price of copper and gold, the blue sky resides with the 27,700 hectare East Niv play located about 30-40 km southwest of the Kemess Mine. East Niv, which is a grassroots play that has never been drilled, has a footprint similar to the Red Chris deposit and potential for high grade copper and gold porphyry mineralization. NWST will begin a 2,700 m drill program with a $2.9 million budget that could be dramatically expanded if early drilling yields discovery grades. Drilling can be done until the end of October. Although assay turnaround will likely be terrible, this style of deposit and associated mineralization provides good visual evidence that a discovery has been made. While continuing strength in gold and copper prices should pull NWST into the $1.50-$2.00, lift off related to hints of a discovery at East Niv could start in August. Sun Metals acquired a 49% interest in the Lorraine copper-gold project which sits between Kwanika-Stardust and East Niv when it acquired Lorraine Copper Corp in early 2018 to lock down its Stardust ownership. In late October 2020 Sun Metals secured a deal to acquire Teck's 51% for $1.5 million in cash or stock over 2 years and $7.5 million linked to milestones consisting of PEA, FS and a construction decision. The Lorraine property adjoins the Top Cat project Serengeti had under option and this will now be treated as a single 65,000 ha project. When Teck optioned Lorraine decades ago its exploration strategy was to look for large porphyry systems but the result, 35.2 million tonnes of 0.45-0.61% copper and 0.19-0.23 g/t gold (no longer 43-101 compliant after the ownership changes), was small. The property is prospective for high K calc-alkaline systems similar to Red Chris and Mt Polley which tend to have much smaller lateral than vertical footprints with copper-gold grades often increasing at depth. Lorraine-Top Cat needs to be revisited with a different exploration strategy, but for 2021 NWST is only allocating $800,000 for a re-compilation of existing data to set the stage for exploration in 2022. As far as the other projects in Northwest Copper's portfolio are concerned, the junior plans to get rid of those which do not have obvious size potential or have a sensitive location such as the OK deposit near Tofino. Overall NWST plans to spend $10-$13 million in 2021. Assuming gold and copper hold their current price levels, NWST should trend into the $1.50-$2.00 range as the Kwanika-Stardust PEA approaches in Q1 of 2022 and the market gets a better sense of what the combined mining operation will look like. East Niv has the potential to become a major new copper-gold discovery supporting a $1-$2 price on its own. The combination of these two distinct value creation tracks justifies a Good Spec Value rating at $0.80 which is currently implying a value of only $117 million for the company.
What's Next?
Updated May 18, 2021: Northwest Copper Corp is the result of two former KRO Favorites, Serengeti Resources Inc and Sun Metals Corp, which merged on March 5, 2021 on terms where Serengeti undertook a 2:1 rollback and Sun Metals merged with the resulting company on a 0.215 NWST share for 1 Sun Metals share. Serengeti was continued as a Fair Spec Value rated 2021 Favorite at $0.39 on December 31, 2020 which adjusted to a $0.78 cost base after the merger. Northwest Copper Corp was upgraded to a Good Spec Value rated 2021 Favorite at $0.80 on May 17, 2021 following the publication of an updated resource estimate for the Stardust project which more than doubled the Canyon Creek resource with the help of the 421 Zone discovered in 2018. (See SVR Overview Tracker May 17, 2021 for a description of the synergies created by the merger.) The new Stardust resource of 7,806,100 tonnes of copper, gold and silver mineralization had a rock value of $193/t, much more than needed for underground mining, with an in situ value of USD $1.5 billion which was less than needed for a standalone operation. This contrasts with the adjacent Kwanika project whose copper-gold-silver Central zone has an open pittable resource of 110.3 million tonnes with a rock value of $37/t and an underground mineable zone of 203.6 million tonnes with a rock value of $44/t with a combined in situ value of USD $13 billion. While that is likely worth developing as a standalone mine at current high copper and gold prices, the uncertainty about long term metal prices would be an obstacle. The new strategy is to deliver a PEA in Q1 of 2022 for a 15,000 tpd milling-flotation facility that will be fed high grade Stardust ore initially blended with Central Zone open pit ore and eventually with Central Zone underground block-caved ore. NWST initiated a 7,200 m drill program in May 2021 designed to infill drill the high grade underground core of the Central Zone and test some satellite targets to the south. While the infill drilling will not yield market moving results, discovery of additional near surface copper-gold porphyry mineralization would boost the market by extending the period that the mill can be fed lower cost open pit mined ore. Apart from the PEA which will reveal the cost structure of the combined operation and an optimal schedule for the dual ore feeds, the other milestone in 2021 ahead of the Kwanika-Stardust PEA will be metallurgical confirmation of a single flow-sheet for the processing facility. An additional milestone will be a deal with Daewoo to acquire its diluting 33% interest in Kwanika for cash and/or stock so that NWST owns 100% of both deposits. With $21 million working capital and a $13 million budget proposed for 2021, NWST should be able to achieve a $1.50-$2.00 valuation for the Kwanika-Stardust project based on 146.4 million fully diluted if the PEA clears the hurdles of after-tax NPV exceeding CapEx and a minimum IRR of 20%. While Kwanika-Stardust is an advanced copper-gold project which offers exposure to copper and gold price trends, both of which are positive in Q2 of 2021 with reasons to believe they will remain so well into 2022, the bluesky resides in the drill ready East Niv copper-gold porphyry prospect which has a style and scale similar to the Red Chris deposit owned by Newcrest and Imperial Metals. A 2,700 m drill program will begin in July and can be expanded to operate until the end of October if drilling yields a discovery. Although Sun Metals was headed by Mark O'Dea, he let marketing strategy be set by Steve Robertson and Don McInnes who adopted a rearview disclosure policy where shareholders were only told what happened 6 weeks ago, which in 2020 with covid-related delays turned into 8-12 weeks. When it comes to discovery exploration plays the market wants to know what the drill plan is at the start, and as results are received updates on what is still in the works. If a junior is to spend money on exploration targets it must make the process entertaining to shareholders. Mark O'Dea is in charge of the merged company and Peter Bell is the new CEO, but it remains to be seen if the disclosure strategy for exploration drilling has indeed changed into the form needed to generate anticipatory speculation. The Good Spec Value rating is contingent on Northwest Copper allowing the market to participate as spectators in the wildcat drilling of East Niv and letting the market run if a discovery hole is pulled. A major discovery at East Niv could support a future price target in the $3-$6 range in addition to what is attributable to Kwanika-Stardust. It will likely be August before NWST will be in a position to report how the East Niv drilling is working out, about the time that a $13 million financing done at $0.80-$1.10 comes free trading. This financing included no warrants but $10 million was done as regular flow-thru and charity flow-thru. NWST has $800,000 budgeted for mapping and data compilation at the combined Lorraine-Top Cat project but it will not be drill ready until 2022. NWST has no plans for the other projects because it does not see size potential in their target footprints. That sort of language opens the possibility that Northwest Copper may acquire other advanced BC copper projects to build its geographically focused copper-gold brand.
Corporate Change History
#Old for New
Last Price
Prior Name
Subsequent Name
Details
Mar 5, 2021
Name Change
2:1
$0.49
Serengeti Resources Inc (SIR-V)
Northwest Copper Corp (NWST-V)
Recommendation History
Edition
Date
Price
Recommendation
Gain
BF2000
3/26/2008
$0.58
New BF TP Buy $0.50-$0.75
0%
BF2000
3/31/2008
$1.50
New Spec Cycle Hold 100%
100%
BF2000
12/24/2008
$0.19
BF Cycle Closeout Sell 100%
-75%
BF2009
12/24/2008
$0.19
New BF TP Buy $0.10-$0.19
0%
BF2009
12/30/2011
$0.16
BF Technical Closeout Hold 0%
-18%
BF2014
1/14/2015
$0.06
New BF Buy below $0.10
-40%
BF2014
12/31/2015
$0.02
BF Technical Closeout 100%
-80%
SV2016
8/10/2016
$0.15
Good Relative Spec Value Buy
0%
SV2016
9/22/2016
$0.21
Confirm Good Relative Spec Value Buy @ $0.21
45%
SV2016
12/30/2016
$0.14
SV Edition Rollover Closeout
-3%
SV2017
12/30/2016
$0.14
Good Relative Spec Value Buy @ $0.14
0%
SV2017
10/5/2017
$0.22
Confirm Good Relative Spec Value Buy @ $0.215
54%
SV2017
10/26/2018
$0.42
Confirm Good Relative Spec Value Buy
200%
SV2017
12/11/2018
$0.17
SV Technical Closeout 100%
21%
SVF2019
12/31/2018
$0.25
Fair Spec Value Favorite
0%
SVF2019
12/31/2019
$0.19
Bottom-Fish Spec Value Favorite
-24%
SVF2020
12/31/2019
$0.19
Bottom-Fish Spec Value Favorite
0%
SVF2020
10/8/2020
$0.36
Fair Spec Value Favorite
92%
SVF2020
12/31/2020
$0.39
Fair Spec Value Favorite
111%
SVF2021
12/31/2020
$0.39
Fair Spec Value Favorite
0%
SVF2021
5/17/2021
$0.80
Good Spec Value Favorite
3%
SVF2021
12/31/2021
$0.81
SV Technical Closeout 100%
4%
SVF2022
12/31/2021
$0.81
Fair Spec Value Favorite
0%
SVF2022
12/30/2022
$0.21
SV Technical Closeout 100%
-74%
Charts & Financing Activity
Most recent 43-101 resource estimate Prior resource estimate PEA PFS FS/BFS/DFS
Private Placement Key
less than $500,000
$1,000,000 - $2,000,000
$5,000,000 - $10,000,000
$20,000,000 - $50,000,000
$500,000 - $1,000,000
$2,000,000 - $5,000,000
$10,000,000 - $20,000,000
over $50,000,000
Private placement financing dates and value ranges are based on transactions reported by the TSXV Monthly Review.
Past Insiders and Reported Shareholders - Current Ownership Status unknown - positions may be pre-rollback
Related Party
Occupation
Related Since
Insider Ended
Director Ended
Capacity
Ownership
Farah Alibhai
Investor Relations
1/16/2007
9/24/2019
IR
0
Richard C. Atkinson
Engineer
8/3/2016
Insider
10,269,050
Richard J. Bailes
Geologist
3/5/2021
9/26/2023
9/26/2023
Director
516,385
Peter Bell
Geologist
3/8/2021
4/26/2023
4/26/2023
CEO & President
430,000
BMK Communications Inc
Investor Relations
8/30/2007
9/24/2019
IR
0
Brad Borada
Broker
2/13/2007
Placee
200,000
Ian D. Brown
5/1/1989
4/10/2019
4/10/2019
Director
1,064,100
Richard M. Cohen
Broker
12/30/2004
Placee
65,000
Nancy L. Curry
Investor Relations
2/19/2020
3/5/2021
IR
0
Teodora Dechev
Engineer
4/10/2019
9/26/2023
9/26/2023
Director
63,590
David B. Elliott
Broker
12/30/2004
Placee
33,000
Elsie Emes
Broker
2/13/2007
Placee
10,000
Anthony Fierro
Broker
12/30/2004
Placee
100,000
David L. Hamilton-Smith
Broker
12/29/2005
Placee
100,000
Bernard Hensel
Broker
12/30/2004
Placee
50,000
Scott Hunter
Broker
12/30/2004
Placee
30,000
Braam Jonker
Accountant
9/26/2023
4/30/2024
4/30/2024
Director
0
Howard Katz
Broker
2/13/2007
Placee
25,000
Robert Klassen
Broker
2/13/2007
Placee
25,000
Michael Kosowan
Engineer
8/30/2018
Insider
10,100,000
Peter R. Krag-Hansen
Investor
5/15/2006
Placee
200,000
Kryptonite Communications
Investor Relations
1/16/2007
9/24/2019
IR
0
Larry Latter
Broker
12/29/2005
Placee
100,000
Lewis V. Lawrick
Merchant Banker
1/1/2006
9/26/2023
9/26/2023
Director
3,013,850
Donald A. Lyons
Lawyer
8/1/2006
8/24/2007
8/24/2007
Director
12,833
Terrence A. Lyons
Engineer
8/8/2023
9/26/2023
9/26/2023
Chairman
0
Lisa May
Investor Relations
8/30/2007
9/24/2019
IR
0
John D. McBride
Merchant Banker
2/9/2011
6/20/2013
6/20/2013
Director
0
David W. Moore
Geologist
7/1/2004
9/29/2023
9/29/2023
CEO & President
2,987,750
Al Morishita
Broker
12/30/2004
Placee
30,000
James N. Morton
Lawyer
9/24/2019
3/5/2021
3/5/2021
Director
0
Ian Neill
Geologist
3/5/2021
12/23/2022
VP Exploration
107,500
Mark O'Dea
Geologist
3/5/2021
8/8/2023
8/8/2023
Chairman
2,015,625
James Oleynick
Broker
12/30/2004
Placee
125,000
Myron J. Osatenko
Geologist
7/1/2004
9/24/2019
VP Exploration
0
Renee Patterson
Broker
2/13/2007
Placee
30,000
Alec Peak
Accountant
3/12/2008
9/24/2019
CFO
0
Sheri Rempel
Businessperson
1/1/2018
3/5/2021
CFO
0
Craig A. Roberts
Engineer
2/13/2007
Placee
71,000
David S. Smith
Accountant
3/14/2022
9/26/2023
9/26/2023
Director
75,000
Greg Steers
Broker
2/13/2007
Placee
50,000
Alfred B. Stewart
Broker
10/1/2004
Placee
125,000
Eric Strom
Engineer
4/10/2019
3/5/2021
3/5/2021
Director
0
Monty Sutton
Broker
2/13/2007
Placee
25,000
Stewart Swette
Broker
12/30/2004
Placee
22,000
Victor A. Tanaka
Geologist
7/1/2002
10/2/2013
10/2/2013
Advisory Board
1,028,800
Sean Tetzlaff
Accountant
3/5/2021
9/26/2023
9/26/2023
Director
1,083,600
John Theobald
Consultant
9/26/2023
4/30/2024
4/30/2024
Director
0
George D. Tikkanen
Engineer
7/1/2004
9/24/2019
9/24/2019
Director
1,175,000
Bill Whitehead
Broker
2/13/2007
Placee
74,000
Jeff Willis
Broker
6/27/2011
Placee
30,000
Wendell Zerb
Analyst
12/30/2004
Placee
25,000
Share positions of current insiders based on last AGM circular, ownership % based on current Issued. Share positions of past insiders and shareholders have not been adjusted for rollbacks or splits.
A Spec Value Hunter table allows speculators to identify which projects offer poor, fair or good speculative value according to the rational speculation model. The speculative value depends on the project stage, the project's implied value as calculated by the company's fully diluted, stock price and net project interest, and the dream target deemed appropriate for the project. A dream target is what a project would be worth in discounted cash flow terms once in production.
Poor Speculative Value -
Fair Speculative Value -
Good Speculative Value -
Note: narrow arrows indicate IPV is outside the fair value channel but within 25% of the fair value limits
Color Key for Target Outcome Achievability Ranges in millions ranked from most to least achievable
below $25
Should be Private: Artisanal, Placer, Mom & Pop Shop
$25-$50
Tiny Scale: underground mine or quarry - not worth the bother
$50-$100
Small Scale: junior needs to self-develop
$100-$250
Buyout Target: by Lower Tier Producers
$250-$500
Buyout Target: by Mid-Tier Producers
$500-$1,000
Ideal Target for Junior: Buckhorn, Sleeper
$1,000-$2,000
Almost World Class: Ekati, Red Chris, Brucejack, Juanicipio, Stibnite
$2,000-$5,000
World Class: Eskay Creek, Hemlo, Hermosa-Taylor, Oyu Tolgoi, LaRonde, McArthur
$5,000-$10,000
Giants: Escondida, Sullivan, Carlin Trend, Kidd Creek, Orapa, Kamoa-Kakula
above $10,000
Off the Scale District: Wits 1.0, Araxa, Sudbury Basin, Bayan Obo
The target outcome range required for the current implied project value to represent fair speculative value is based on the upper and lower certainty limits associated with the project stage. The color coding is based on the target outcome using the mid-point of the certainty range.
Active Company Projects
Project
Location
Net Interest
Stage
IPV $ MM
Fair Spec Value Required Target Outcome Range
$100
UPV $500
$2000
Target Metals
Deposit Style
Kwanika
Canada - British Columbia - Central BC
100% WI
5-PEA
$57
$228 - $570
Gold Copper Silver Molybdenum
Porphyry
East Niv
Canada - British Columbia - Northern BC
100% WI
2-Target Drilling
$57
$2,279 - $5,698
Copper Gold Silver
Porphyry
Stardust
Canada - British Columbia - Northern BC
100% WI
4-Infill & Metallurgy
$57
$570 - $1,140
Gold Copper Silver Zinc
Carbonate Replacement
Arjay
Canada - British Columbia - Northern BC
100% WI
2-Target Drilling
$57
$2,279 - $5,698
Copper
Porphyry
Croy Bloom
Canada - British Columbia - Quesnal Trough
100% WI
2-Target Drilling
$57
$2,279 - $5,698
Copper Gold Cobalt
Porphyry
East Copper King
Canada - British Columbia - Northern BC
100% WI
1-Grassroots
$57
$5,698 - $11,396
Copper
Porphyry
ET West
Canada - British Columbia - Northern BC
100% WI
1-Grassroots
$57
$5,698 - $11,396
Copper
Porphyry
Far East - LaForce
Canada - British Columbia - Northern BC
100% WI
1-Grassroots
$57
$5,698 - $11,396
Copper Silver
Jewel
Canada - British Columbia - Central BC
100% WI
2-Target Drilling
$57
$2,279 - $5,698
Copper Gold
Skarn
Lorraine-Top Cat
Canada - British Columbia
100% WI
4-Infill & Metallurgy
$57
$570 - $1,140
Copper Gold Silver
Porphyry
Milligan West
Canada - British Columbia - Quesnal Trough
56.3% WI
2-Target Drilling
$101
$4,048 - $10,121
Copper Gold
Porphyry
Notch
Canada - British Columbia - Northern BC
100% WI
1-Grassroots
$57
$5,698 - $11,396
Copper
OK
Canada - British Columbia
100% WI
4-Infill & Metallurgy
$57
$570 - $1,140
Copper Molybdenum
Porphyry
TrUM
Canada - British Columbia - Northern BC
100% WI
1-Grassroots
$57
$5,698 - $11,396
Nickel Cobalt
Ultramafic Complex
UDS
Canada - British Columbia
100% WI
2-Target Drilling
$57
$2,279 - $5,698
Gold Copper
Porphyry
West Goldway
Canada - British Columbia - Northern BC
100% WI
2-Target Drilling
$57
$2,279 - $5,698
Copper
Porphyry
Project Stage
Flagship
Secondary
Active
Grassroots (1) & Target Testing (2)
Discovery Delineation (3)
Infill Drilling & Metallurgy (4)
PEA (5) or PFS (6)
Feasibility & Permitting (7)
Construction (8) or Production (9)
Clicking on the project icon will display a popup identifying the company project, its stage and target metals, basic facts, a chart, a link to that project within that company's KRO Profile, a link to the most recent news release, and a link to the most recent KRO comment if one exists.
Net Interest: 100% WI Vested: Yes Uncapped NSR/GOR: 0.00%
Ownership Terms: 100% acquired in 2004 by staking. Agreement March 7, 2016 whereby Daewoo Minerals Canada can earn 5% by spending $1.2 million in year one, with an option to earn 35% by financing an additional $7-million over the subsequent two years for aggregate expenditures of $8.2-million over three years to earn an aggregate 35-per-cent project interest. Serengeti remains as project operator, so long as it maintains a majority interest and is entitled to charge a 10-per-cent operator's fee on expenditures beyond the initial $1.2-million investment by DMC. Serengeti, in addition to maintaining its project interest, would be granted a 1-per-cent net-smelter-return royalty if its project interest is diluted below 50 per cent and an additional 0.5-per-cent NSR royalty if its interest is diluted below 33-1/3rd per cent, subject to partial buyback provisions to DMC. DMC will have certain concentrate offtake rights from production on the project, subject to Serengeti's ability to enter into separate streaming arrangements. On proceeding with the second-stage Kwanika earn-in, DMC has the right to select and earn into one of Serengeti's other exploration properties by financing additional expenditures, which property would be nominated at Serengeti's sole discretion. The Kwanika project encompasses the Kwanika, Kwanika East, Smoke, Germansen, Valleau and Rottacker properties. On Dec 29, 2021 Posco agreed to sell its 31.02% interest for $11 million payable in shares in 3 stages over 180 days as $4 million at $0.77 on closing, $4 million at 20-day VWAP 60 days later, and $3 million at VWAP 120 days later.
PEA begins on the higher grade portion of the copper-gold resource to evaluate a 15,000-tonne-per-day, combined open pit and underground operation with a 10- to 15-year mine life. The PEA is expected to be completed in the first quarter of 2012.
Economic Study - PEA
2012 Q1
2012 Q1
PEA expected to be completed for the higher grade portion of the copper-gold resource, evaluating a potential 15,000-tonne-per-day, combined open pit and underground operation with a 10- to 15-year mine life.
Target Testing
2016 Q3 Mid August
2016 Q3 Late September
3 holes drilled in August, one to test IP anomaly, 1 to test north plunge of Central Zone, and 1 to test orientation of mineralization.
Base Case Resource Estimates
Project Resource Estimate - Kwanika - Central Open Pit
Mar 3, 2019
NI 43-101
Sue Bird P.Eng, Moose Mountain Technical Services, Cranbrook, BC
Annual Pre-Tax Cash Flow Base Case and Net CF/FDSH USD:
$155,886,860
$0.57
Pre-Tax Payback:
7.3 y
Annual Pre-Tax Cash Flow Spot and Net CF/FDSH USD:
$220,154,540
$0.83
After-Tax Payback:
Enterprise Value CAD :
$55,748,830
$.22/sh
Share Price:
$0.23
Note:
Comparative Valuations using Life of Mine Averages
Discount Rate:
0%
5%
10%
15%
Base Case Pre-Tax NPV USD:
$1,674,516,040
$1,026,023,016
$644,227,957
$408,287,910
Base Case Pre-Tax Net NPV/Sh USD:
$6.61
$4.05
$2.54
$1.61
Premium BC PT NPV over EV:
$6.45
$3.89
$2.38
$1.45
Spot Pre-Tax NPV USD:
$2,574,263,560
$1,631,892,243
$1,074,627,877
$728,199,882
Spot Pre-Tax Net NPV/Sh:
$10.17
$6.44
$4.24
$2.88
Premium Spot PT NPV over EV USD:
$10.00
$6.28
$4.08
$2.71
The comparative NPV calculations assume constant annual cash flow based on the life of mine average annual payable production and CapEx spent in year one. The operating cost includes the LOM sustaining capital. Due to details such as ore scheduling these NPV figures may differ from those of the 43-101 economic study.
Net Interest: 100% WI Vested: Yes Uncapped NSR/GOR: 0.00%
Ownership Terms: (formerly called Lustdust) Agreement dated May 16, 2016 by Lorraine Copper to acquire 100% from ALQ Gold Corp for 5.5 million shares, $50,000 and $100,000 exploration within 12 months. Agreement June 29, 2017 whereby 1124245 B.C. Ltd. will make a $50,000 cash payment to Lorraine Copper and issue 500,000 shares of 1124245 B.C. Ltd. and will undertake a minimum $500,000 expenditure on the property by December 31, 2017. Thereafter 1124245 B.C. Ltd. will make annual cash payments, share issuances and minimum annual property expenditures until a total of $6,000,000 has been spent on the property before December 31, 2021. At that point 1124245 B.C. Ltd. will issue sufficient shares to Lorraine Copper such that Lorraine will hold a 30% interest in 1124245 B.C. Ltd. Lorraine Copper will also retain a 2% NSR on precious metals and a 1% NSR on base metals which may be bought down by one-half each by the payment of $1,500,000 per royalty to Lorraine Copper.1124235 BC Ltd was acquired by Sun Metals Corp. On Dec 18, 2018 the deal was amended for a 500,000 share payment to Lorraine Coppe by Dec 31, 2018 so that Sun Metals can vest for 100% by issuing 31,529,315 shares by Mar 31, 2019. The agreement became moot after a Feb 4, 2019 decision to acquire Lorraine by plan of arrangement whereby Sun Metals issued 0.54 share for 1 Lorraine share which closed Apr 11, 2019. This gives Sun Metals 100% interest and wipes out the NSR.
Net Interest: 100% WI Vested: Yes Uncapped NSR/GOR: 0.00%
Ownership Terms: 2008 agreement where Newcrest Mining may earn a 51-per-cent joint venture interest in the Croy Bloom/Davie Creek property by financing $10-million in exploration expenditures and making $500,000 in cash payments over four years. Newcrest may then elect to earn an additional 14-per-cent interest by financing an additional $25-million toward a prefeasibility study. Newcrest withdrew in 2008.
Target Metals: Copper Gold Cobalt
Model: Porphyry
Stage: 2-Target Drilling
Notes on Croy Bloom Project
The Croy-Bloom property is located within two kilometres of a logging road spur from the Kemess mine haul road in the Johansson Lake area of the northern Quesnel trough. Prior work by Serengeti and others has outlined a large induced polarization (IP) anomaly coincident with a four-square-kilometre copper-gold-cobalt geochemical anomaly containing values up to 5.5 per cent copper, 9.4 grams per tonne (g/t) gold and 0.075 per cent cobalt in grab samples.
Net Interest: 100% WI Vested: No Uncapped NSR/GOR: 1.00%
Ownership Terms: (formerly called Lorraine-Jajay) Teck Cominco can earn 51% by spending $9 million by Dec 31, 2010 (done), 60% by completing a feasibility study (spending $500,000 annually), and 65% by arranging production financing. If Teck does not make the minimum expenditure for 3 consecutive years it reverts to a 51% interest. In January 2014 Teck elected to form a 51:49 JV with Lorraine. Agreement Oct 29, 2020 to acquire Teck's 51% for $1.5 million over 2 years, $500,000 on PEA, $2 million on FS, and $5 million on construction decision. Teck gets a 1% NSR on claims not burdened with an NSR and 0.25% on those that are. If project sold with 60 months Teck gets 20% of proceeds. Top Cat option from Serengeti: Option dated July 23, 2019 to acquire 100% from the Pinchi Group (Donald Bragg, Peter Fox, Don Mustard, Barry Price) for 1.5 million shares, $340,000 and $1,250,000 exploration over 5 years with $100,000 during Y1. Vendors retain 3% NSR of which 2% can be bought any time before the first anniversary of production for $2 million. The claims include the former Cat Mtn project of Lysander. Property includes the 100% owned Goose claims acquired by staking.
Net Interest: 100% WI Vested: Yes Uncapped NSR/GOR: 0.00%
Ownership Terms: Agreement dated May 16, 2016, between Lorraine Copper Corp. and Eastfield Resources Ltd., whereby the company can acquire the vendor's 40-per-cent interest in the OK (Okeover) property located near Powell River, B.C. The remaining 60 per cent is held by Prophecy Development Corp. The vendor may elect to choose consideration of $40,000 cash or 800,000 shares. The vendor has the right to 20 per cent of any option payments from a third party agreement for a period of three years. The company will assume responsibility to cover its proportionate share of assessment work obligations on the property. The property is subject to an underlying 2.5-per-cent net smelter return (NSR). On Sept 28, 2016 Lorraine acquired the 60% from Prophecy for 2.2 million shares and $19,078.
Net Interest: 100% WI Vested: Yes Uncapped NSR/GOR: 0.00%
Ownership Terms: Acquired by staking in August 2013. On Mar 5, 2018 option to acquire 100% of adjacent Atty claim from Finlay Minerals Ltd and ATY claim Electrum Resource Corp for $625,000 cash, $975,000 in cash or shares and $12 million exploration over 8 years. Y1 is $50,000 cash on signing and $300,000 exploration commitment. Subject to 3% NSR held by Electrum of which can be reduced to 1.5% by paying $500,000 in stages over 8 years. Upon a production decision Serengeti must pay the lesser value of $1 million or 500,000 shares. The ATG claim can be acquired for 200,000 shares and carries a 1.5% NSR. Serengeti has right of first refusal on NSRs. On July 2, 2020 Serengeti terminated the Atty option.
Most recent 43-101 resource estimate 
Prior resource estimate 
PEA 
PFS 
FS/BFS/DFS
Flagship Play
Secondary Plays
Other Plays
