• Key Performance Indicators:
  • US$2.03B Net Present Value ("NPV") (8% discount, after-tax)
  • 24% Internal rate of return ("IRR")
  • 4.9 years Payback Period
• Life of Mine ("LoM") Gross Revenue of $20.8 billion
• LoM Free Cash Flow ("FCF") of $7.3 billion (unlevered)
• Cash costs (C1) of $1.82 and All in Sustaining Costs ("AISC") of $2.00 per pound of copper
• Financial and operational executability now through transition to Open Pit operation
  • 94% material from open pit mining (Cactus West and Parks/Salyer), 6% from the Stockpile and Cactus East underground
• 232 million pounds ("lbs") (116,052 short tons ("st")) average annual copper cathode production over the first 20 years of operation and a total of 5,339 million lbs (2,669,342 st) of copper cathode produced over the 31-year operating mine life
• Cactus Project is well positioned to add value in a variety of copper price environments
  • Copper Price Assumption
    • $3.90/lb Cu
    • $4.50/lb Cu
  • NPV8 (after-tax)
    • $2,032 million
    • $2,927 million
  • IRR (after-tax)
    • 24%
    • 30%
  • Payback (after-tax)
    • 4.9 Years
    • 4.5 Years
  • Development Capital
    • $668 million
    • $668 million
  • LoM FCF (After Tax)
    • 7,295 million
    • 9,777 million

CASA GRANDE, Ariz. & TORONTO--(BUSINESS WIRE)--$ASCU #Arizona--Arizona Sonoran Copper Company Inc. (TSX:ASCU | OTCQX:ASCUF) ("ASCU" or the "Company") today reports the results from an NI 43-101 Preliminary Economic Assessment ("PEA") on its 100%-owned brownfield Cactus Project in Arizona, USA. The PEA supersedes the previously released Pre-Feasibility Study ("PFS") in all respects, and rescopes Parks/Salyer as an open pit operation resulting from the inclusion of the MainSpring property. The inclusion materially improves the economics and operations of the project, producing a total of 5.3 billion lbs or 2.7 million st of LME Grade A Copper Cathodes over a 31-year operating LoM via heap leaching and solvent extraction and electrowinning ("SXEW"), an established and industry standard hydrometallurgical extraction technology. All dollar amounts referenced herein in US dollars, and all references to tons are imperial or short tons, unless otherwise noted; 1 short ton equals approximately 0.91 metric tonnes. The Company previously issued a news release on JUL 16, 2024 (the "MRE News Release"), disclosing an updated mineral resource estimate (the "2024 MRE") for the Cactus Project which formed the basis for the PEA.

A webinar will be held on August 8, 2024, at 10:30 am ET. Please join George Ogilvie, Nick Nikolakakis, Bernie Loyer, Steve Dixon and Anthony Bottrill in discussion of the PEA and the Company's next steps by registering here .

The PEA is preliminary in nature and it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the project described in the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

TABLE 1: SUMMARY OF KEY METRICS

George Ogilvie, ASCU President and CEO commented, "We achieved, and far surpassed each goal to demonstrate leading NPV, IRR and payback and all other operational and economic metrics from the Cactus Project. The PEA represented herein delivers a highly compelling copper mining operation, on a standalone basis. The project size and top-tier location are complemented by a highly skilled operations and development team already based in Casa Grande and motivated to deliver an executable plan. After completing the MainSpring title transfer in March 2024, and subsequently obtaining the General Plan Arrangement approval, MainSpring's integration to Parks/Salyer positively impacts the operations, lowers mining risks and is overall transformational to the economics.

He continued, "We now look forward to completing metallurgical programs and the infill drilling to support a PFS expected in 1H2025. Clearly, Cactus shows merit on a standalone basis and we will continue to move forward with this mine plan, while continuing to work with our partner, Nuton Technologies, a Rio Tinto Venture. We envisage Cactus, a brownfield Copper Mine as having the size and scale capable of making a meaningful positive impact to the US copper mining industry."

Key Impacts on the NPV:

• Mine plan execution rescopes to 94% open pit
  • Parks/Salyer and Cactus West are open pit operations; changes positively impact annual throughput, mining costs, operating costs and processing costs.
• Mineralized material impacts
  • LoM tonnage processed of 889 million st, including:
    • 659 million st of oxides and enriched material
      • Parks/Salyer: 69%
        • Including: new MainSpring inferred mineral resources of 245 Mst @ 0.39% CuT (PR dated JUL 16, 2024)
      • Cactus West: 23%
      • Cactus East: 6%
      • Stockpile 2%
    • 230 million st of primary sulphides to the leach pads with current recoveries reported at an average of 25% from year 15
      • Parks/Salyer 34%
      • Cactus West: 66%
• Processing cost impacts
  • Processing initial capital expenditure ("capex") of $511 million including contingency (SXEW plant and owner's costs)
  • Processing sustaining capital of $553 million (process plant - average of $18 million per year)
  • Processing operating costs ("opex") of $2.29/st
• Other cost impacts
  • Updated salvage cost, land sales, closure and royalties
• Mining cost impacts
  • Mining opex and capex impacted by Parks/Salyer rescope to an open pit mining operation
  • Initial Capex of $157 million (pre-production stripping)
  • Mining sustaining capital of $544 million, optimizing the per ton mining costs (average of $18 million per year)
  • Operating expenditures of $8.16/t processed

Bernie Loyer, ASCU SVP Projects commented, "The evolution of the MainSpring and Parks/Salyer open pit combination as demonstrated by this PEA presents a profound change to the Cactus Mine business case. That impact can be gauged in the project's robust economics and also in the contribution that this generational asset is expected to make to our local communities for years to come. With the anticipated creation of more than 3,000 direct and indirect jobs and more than $2.2 billion in life of mine federal and state tax revenues, Cactus Mine is anticipated to become a cornerstone business for the local economy. Great copper projects are where you find them and that often translates to remote and sometimes complicated jurisdictions around the world. In contrast, the combined heritage of the Arizona and Pinal County copper mining legacy married to a Casa Grande venue sets an incredible launch platform for this great project."

Nick Nikolakakis, ASCU CFO commented, "The economics at Cactus in the PEA afford us an opportunity to begin seeking project financing. The Company has been in initial discussions with a group of lenders including commercial banks and an export credit agency. Cactus is projected to generate robust cash flows over a 30+ year mine life. The current economic metrics present a unique opportunity for the Company to actively pursue financing alternatives as the project advances towards a pre-feasibility and definitive feasibility study in 2025."

The Company intends to file a technical report (the "Technical Report") in respect of the PEA in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") on SEDAR+ () under the Company's issuer profile and the Company's website within 45 days of the MRE News Release.

Preliminary Economic Assessment Summary
The 2024 PEA supersedes the PFS titled "Cactus Mine Project NI 43-101 Technical Report and Pre-Feasibility Study, Arizona, United States of America", dated March 28, 2024 (with an effective date of February 21, 2024) ("March 2024 PFS") in its entirety. The PEA integrates the new Parks/Salyer additions from the MainSpring property as inferred mineral resources, re-scoped as an open pit. By applying open pit mining costs to the Parks/Salyer mineral resource estimate, it now contributes 531 M tons of feed material grading 0.530% CuT to the total 889 million tons of feed material at 0.46% CuT over the LoM. FIGURE 1 illustrates the cumulative stacked production in this PEA. Overall, the Cactus Project PEA envisages a 31-year mine life with annual average throughput of 29 million tons, for an average of 86 kstpa of copper cathodes produced annually. The result is a lower risk brownfield open pit mining operation with a long life and a streamlined permitting process on private land in Arizona with water rights and access to water from in-situ water wells.

A total of 2,872 million tons will be mined and a total of 889 million tons processed, recovering 5.34 billion pounds of copper cathodes over the LoM or 2,669,000 tons. Copper cathodes will be produced directly onsite via heap leach and SXEW, including a four year ramp up period. Total Copper recoveries are planned at an average of 73%, extracting copper from the oxides, enriched and primary sulphides. See Exhibit 1 and 2 for mine plan, sequencing, costs and economics. Gross acid usage is calculated at 22 lbs per ton at a cost of $160 per ton.

Onsite facilities at the mine site will consist of two open pits, one underground mining operation, a fine crushing plant incorporating all crushing, classification, agglomeration and conveying systems, heap leach pad, water supply and distribution systems, technical and operational support offices, additional electrical substation, warehousing and an SXEW process plant. Onsite supporting infrastructure will include site power distribution, access roads, mine operations infrastructure, and heap leach facilities, of which the power and roads are already in use.

Current onsite and nearby infrastructure includes:

• Onsite administration buildings, geology, core storage, completed earthworks, substation, parking lot and access roads
• Clean power via onsite substation for $0.07/kWh
• Paved access roads and easy access to interstate highways I-8 and I-10
• Union Pacific railroad line adjacent to the property
• Casa Grande, Maricopa and Phoenix are all located nearby to supply materials/consumables in addition to a skilled labour pool
• Permitted water available onsite, and additional water may be available through the city
• Flat land and low altitude
• Located within the City of Casa Grande industrial park

TABLE 2: Report Sensitivities to the Copper Price

Mining and Processing Operations
Mineralized material will be sourced mainly from the two open pits with an overall LoM strip ratio of 2.3:1. The Cactus West pit (1.0:1 strip ratio) and new Parks/Salyer pit (3.2:1 strip ratio) comprise 94% of the total material to the leach pads. The remaining 5% of material will be sourced from the Cactus East underground deposit utilizing sub-level cave from the 1,200 ft (366 m) level, and 1% from the Stockpile.

Both Parks/Salyer and Cactus West will be mined using 40 ft (12.1 m) single benches, with ramps sized to allow 320-ton class haul trucks. At Parks/Salyer, all walls have been designed with 45-degree inter-ramp slopes, while geotechnical step-outs are employed to reduce the overall slope to approximately 40 degrees. At Cactus West, inter-ramp slopes range from 45–50 degrees depending on material type, with typical overall slope angles of 41-43 degrees. Gila conglomerate and alluvium constitute the large majority of the waste in the pits.

The mine schedule for open pit mining at Parks/Salyer consists of 531 million tons of feed material grading 0.530% CuT, including 453 million tons of oxide and enriched leach feed material grading 0.55% CuT and 78 million tons of primary sulphide leach feed material grading 0.41% CuT. Open pit mining will initiate in Parks/Salyer in Year -1 and operate continuously for 23 years over seven pit phases. Total waste mined in Parks/Salyer is 1,680 million tons.

The mine schedule for open pit mining at Cactus West consists of 306 million tons of feed material grading 0.29% CuT, including 154 million tons of oxide/enriched leach feed material grading 0.26% CuT and 152 million tons of primary leach feed material grading 0.32% CuT. Open pit mining will take place at Cactus West in the years of 7-11, 15, 19, and 23-31. Phase 1 Cactus West is used to smooth stripping requirements of Parks/Salyer in the middle-years of the mine plan, while Phase 2-3 are mined in the later years and predominantly supply primary feed material. Total waste mined from Cactus West is 299 million tons.

The Stockpile project contributes 9.8 million tons of conventional leach feed material grading 0.24% CuT which will be used for project commissioning in Year 1 of processing.

After a comprehensive review of Cactus East ̧ sub-level caving ("SLC") was selected as the preferred underground mining method. A sublevel cave underground mine is planned for Cactus East with development beginning in Year 8 and mining completed in Year 22, peaking at 3.9 million tons per year. Total Cactus East feed material mined is projected to be 42 million tons grading 0.83% CuT. The initial Cactus East SLC level will begin at 1,325 ft (404 m) below the surface over 7 sublevels, to a final depth of 1,845 ft (562 m). Access will be via a single decline with a portal located within the existing Cactus West pit. Haulage of mineralized material to surface will be via a vertical conveyor which can be supplemented with truck haulage to surface via the open pit if necessary.

The Cactus Project heap leaching process design includes crushing of all material types for leaching to a minus 3⁄4" P80 size. All material types, oxides, enriched and primary are to be leached in on a single pad with an initial leaching cycle of 180 days. A maximum 3-year leaching cycle has been assumed (3 lifts) as the practical limit for effective recovery based on experience and hydrodynamic analysis of the materials by HydroGeoScience Inc. (HGS). The copper leaching metallurgical test data has been extrapolated from the testing data at one year based on the rates prevailing after one year using a logarithmic curve fit projection that considers the decaying rate of copper extraction.

Average annual water consumption is planned at approximately 1,200 gallons per minute, the equivalent of 1,935 acre feet per year, well within ASCU's permitted 3,600 acre feet per year industrial use allocation, using in place onsite wells.

The PEA envisages that overall tonnage will comprise approximately 25% oxide material, 50% enriched (secondary sulphides) and 25% primary sulphides within the LoM. From year 15 to 22 placed tons will consist of approximately 25% primary, whereas from year 23, will comprise 100% of the operation. Overall copper extraction is impacted by the lower rates from primary sulphides. In the PEA, ASCU includes a conservative 25% extraction rate.

The total LoM costs, operating costs per ton ($/st) of processed material, and dollars per pound ($/lb) of cathode produced are summarized in the three tables below. Project operating costs include mine operating, process plant operating, and general and administrative costs ("G&A"). Total production costs include royalty expense. The AISC additionally includes initial Capex, sustaining Capex, reclamation & closure.

Mining operating cost estimates, prepared by AGP Mining Consultants Inc., are based on a small owner's team managing mining activities using an owner-operator model. Process operating cost estimates were prepared by Samuel Engineering and G&A cost estimates were prepared by M3 Engineering with input from ASCU, as summarized in TABLES 3-5 below (note numbers may not add due to rounding). Sequencing of operations and annual cash flows are detailed in Exhibit 1 and 2, at the end of this release.

The capital cost estimates for the PEA were developed with a -25% to +30% accuracy. The Company uses an estimated overall mining contingency of approximately 18% and according to the Association of the Advancement of Cost Engineering International (AACE) Class 5 estimate requirements.

The PEA is based on the updated 2024 MRE, as published in the MRE News Release on JUL 16, 2024, showing a 41% increase of Measured and Indicated ("M&I") pounds and an 89% increase of the inferred pounds. The Mineral Resources for the Cactus Project are shown in TABLE 6 and illustrated in FIGURE 2 below. For more details relating to the 2024 MRE, please refer to the MRE News Release, a copy of which is available on SEDAR+ () under the Company's issuer profile and the Company's website ().

TABLE 6: Cactus Project Mineral Resource Estimate

Alison Dwoskin, Director, Investor Relations
647-233-4348
adwoskin@arizonasonoran.com

George Ogilvie, President, CEO and Director
416-723-0458
gogilvie@arizonasonoran.com