en.Wedoany.com Reported - Faraday Copper (TSX: FDY; US-OTC: CPPKF) expects its total copper resources in Arizona to exceed 18 billion pounds following confirmation drilling at BHP's (NYSE, LSE, ASX: BHP) former San Manuel mine, with the acquisition expected to close this month.

Upon completion of the transaction, Faraday will own the historic copper mine, approximately 109 square kilometers of prospective private land, water supply agreements, and infrastructure adjacent to its former flagship project, Copper Creek. The assets are located about two hours' drive southeast of Phoenix. As planned, at least 23,000 meters of drilling will be undertaken at San Manuel in the fourth quarter, with combined resource estimates expected around mid-2027.

Chief Executive Officer Paul Harbidge told The Northern Miner that copper resources are expected to exceed 18 billion pounds, ranking among the largest undeveloped copper resources in the United States. Following the acquisition, Faraday will transition from a single-project explorer to a mine district developer, building two open-pit mines and two underground mines around shared infrastructure.

San Manuel's remaining copper resources are still based on historical estimates, old drill cores have been discarded, and a combined mine plan has not yet been studied, making new drilling a top priority. Faraday must confirm resources through new drilling before San Manuel can be included in current technical studies. Driven by surging copper prices, as of August 11, Faraday's Toronto-listed shares had risen more than fourfold over the past 12 months, closing at C$5.50 per share, within a range of C$1.15 to C$6.69, giving the company a market capitalization of C$1.6 billion (US$1.15 billion).

The San Manuel mine began underground production in 1955, later adding open-pit mining and in-situ leaching, processing approximately 800 million tonnes of ore at 0.66% copper and producing more than 4.5 million tonnes of copper metal until it was shut down in 1999 due to low copper prices. BHP completed site remediation in 2003. Faraday holds historical drilling, assay, and geological records covering approximately 440,000 meters of drilling information, but BHP discarded the drill cores, requiring the company to re-drill in order to classify the old estimates under current disclosure standards.

The Copper Creek project already has an established resource base. According to a preliminary economic assessment released in May 2023, Copper Creek has measured and indicated resources of 421.9 million tonnes at 0.45% copper, containing 4.2 billion pounds of metal; plus inferred resources of 83.6 million tonnes at 0.34% copper, containing 628 million pounds of metal. Faraday recently completed 88 drill holes totaling 22,510 meters at Copper Creek, paused in June due to the acquisition and Arizona summer storms, with assay results still pending.

The company plans to locate shared facilities on the former San Manuel mine site rather than at Copper Creek, to take advantage of local road, rail, natural gas, and power access. Harbidge said he hopes to first process San Manuel's oxide material, then develop the Copper Creek open pit, and use project cash flow to fund a sulfide ore concentrator, with underground production subsequently ramping up from the Copper Creek and San Manuel-Kalamazoo systems. He noted that there is no need to write a C$5 billion check for initial capital, and the combined project has the potential to produce approximately 150,000 tonnes of copper per year for more than four decades—a judgment that still requires confirmation drilling, resource verification, and detailed engineering design to validate.

In terms of cash reserves, as of June 30, Faraday held C$94.2 million in cash and C$32 million in term deposits. Harbidge said these funds are sufficient to sustain operations into early 2028, covering the acquisition, San Manuel drilling, combined resource assessment, and first-phase studies.

Upon completion of the transaction, BHP will hold a 30% stake in Faraday on a fully diluted basis, with the right to nominate one director; the Lundin family trusts will hold approximately 18%, and both participated in Faraday's C$100 million financing in March. Haywood Securities maintains a "Buy" rating and a C$7 target price, viewing the combined resource and mine studies as Faraday's primary catalysts. The stock rose 34% in the second quarter, among the top performers in Haywood's coverage universe, while the developer sector average declined 9% over the same period.

Harbidge revealed that Faraday has no immediate plans for another acquisition, and the current challenge lies in proving the scale of the integration. "By combining San Manuel with Copper Creek, we've grabbed the tiger by the tail," he said.