It’s been a long time since a copper and gold mine has opened in Wyoming.

The state, renowned for its diverse mineral deposits and unique geology, plays a vital role in supplying raw materials for various industries and energy development. In a nod to the historical Gold Rush era, small miners continue to stake claims on public lands in search of precious minerals, adding a modern chapter to the state’s mining legacy.

Just outside of the state’s capitol, Cheyenne, work is progressing on what could be the state’s first copper and gold mine in decades.

The CK gold project is a large-tonnage, gold-copper deposit featuring some of the best grade mineralization right at surface and a surrounding extensive lower-grade zone with potential for resource expansion. Discovered in 1881, the deposit underwent limited mining but gained attention through various exploration phases.

In 2014, US Gold Corp (NASDAQ:USAU) acquired the project from Energy Fuels and started drilling in 2017. Until 2019, the firm was focused on its exploration assets in Nevada, and with investor reluctance to fund exploration around that time, the executive team was looking at monetizing CK.

Co-founder and executive chairman Luke Norman figured he would run the project by his friend George Bee, a long-time mining and development veteran with experience turning some of Barrick’s projects into operating mines. When Bee took a closer look, he saw a straightforward project, particularly in terms of the simple open-pit mining and copper and gold recovery.

“Open-pit mines, in general, are easier to manage, and the data set, depending on how the ore body behaves, is more reliable to estimate,” Bee explained. “This is a great project – why would you sell it?”

From exploration to development

So US Gold decided to pivot towards development, and Bee joined the company in September 2020. Bee’s qualifications for making this assessment stem from over 40 years of experience in the mining industry. A significant part of his career involved operating and developing mines and advancing projects.

“From my early days at Barrick, working on projects like Goldstrike, to overseeing the final construction and operation of Pierina in Peru, moving on to projects in Chile and Argentina, my expertise spans the entire mining lifecycle,” Bee told Proactive. “I’ve also been involved in the junior sector, starting and selling companies before being invited back to Barrick to take another look at Pascua Lama in Chile/Argentina. Though semi-retired, the opportunity to leverage my experience on a promising project in Wyoming, close to my home in Park City, Utah, was too appealing to pass up.”

The company underwent a significant shift in focus, putting exploration in Nevada on hold to focus on the development of CK. From a prior Preliminary Economic Assessment, they went on to establish a reserve with a Prefeasibility Study in December 2021. The environmental and engineering continued, marking a crucial step in the permitting process for the development of the CK project.

The project is poised for receipt of permit approval and finalization of the Feasibility Study in early 2024, with the new mine anticipated to open as soon as 2025. The initial 10-year life of mine is expected to create over 300 long-term jobs and contribute almost $90 million in tax revenue and in excess of $30 million in royalty payments to the state, earmarked for education.

A new mine in Wyoming

It is a unique position for US Gold, being one of the few with a copper-gold asset in a stable jurisdiction like Wyoming almost ready to meet growing demand. Of course, navigating the challenges in the mining sector is always a complex task.

“Given the current political climate in North America, everyone’s afraid of their own shadows, from a permitting perspective, especially when we’re dealing with any kind of federal agencies,” chairman Norman commented.

The focus on environmentally conscious practices adds an extra layer of caution. However, being in a resource-friendly state like Wyoming allows direct engagement with local authorities, specifically the Department of Environmental Quality’s Land Quality Division in Cheyenne. With the project located just 20 minutes outside Cheyenne and in proximity to an existing open pit quarry operated by an NYSE-listed aggregates and building materials company, US Gold sees this as a significant advantage for the permitting process as the local people understand the industry.

The executive team is expecting to receive its Mine Operating Permit by the end of the first half of 2024. A feasibility study will be finalized around the same timeframe, and, if all goes well, the development project will turn into a producer in due course.

“It’s going to change the opinion of a lot of naysayers around this project,” Norman explained.

“People felt that we were too close to a state park, or that the project wasn’t robust, but we’ve proven through simple engineering an at surface deposit with very, very simple mining extraction, and ultimately, minimal environmental disturbance. We now believe the project is evolving a pathway to be of environmental benefit to the community.”

Simple mining methods – and robust financials: The prefeasibility study indicates a reserve of 1.44 million gold equivalent (AuEq) ounces, with an additional 0.357 million AuEq inferred resources. With an output of 135,300 AuEq ounces per year during the initial three years, the initial capital investment is estimated at $221 million, which means robust economics with a 39.4% internal rate of return (IRR) before tax and pre-tax net present value (NPV) of $323 million. What’s more, those figures use a conservative US$1,625 gold price and $3.25 copper price – both of which have shot higher in the interim.