Orlando Copper-Gold Project Delivers Compelling Economics with $355M NPV
CuFe Limited (ASX: CUF) has announced impressive results from its scoping study on the Orlando open pit project, demonstrating robust economics that position the company as a potential significant player in Australia's copper-gold sector.
Scoping Study Reveals Strong Financial Potential
The study has unveiled compelling economics for CuFe's 55%-owned Orlando open pit cutback project in the Tennant Creek region of Northern Territory. The project shows an NPV(7) of approximately $355 million (100% ownership basis) with an IRR of 59.7% and a payback period of just 1.9 years.
Even more encouraging is the potential upside if current market prices are applied. Using spot prices as of July 1, 2025, the NPV(7) improves to approximately $462 million (100% ownership basis).
"We are excited to have completed the Scoping Study for the Orlando open pit project. The Study confirms the significant potential we have at Tennant Creek," commented CuFe Executive Director Mark Hancock.
Project Scope and Production Profile
The CuFe Orlando project study is based on mining and processing 3.5 million tonnes of resource with average feed grades of 1.33% Cu and 1.8 g/t Au. Importantly, this represents only about one-third of CuFe's total Tennant Creek resource base, which stands at 10.35 million tonnes at 1.53% Cu and 0.92 g/t Au.
Over the projected 5-year mine life, the Orlando project is expected to produce:
- 39,449 tonnes of payable copper
- 167,419 ounces of payable gold
- Total revenue of $1.25 billion
The study assumes construction of a new 850,000 tonne per annum processing plant, with the plant purchase and installation costs of $82 million forming the majority of the estimated $136 million total pre-production capital expenditure.
Capital and Operating Costs
The financial structure of the CuFe Orlando project study includes the following key elements:
| Cost Category | Amount (A$ million) |
|---|---|
| Development Capital | $136 |
| Sustaining Capital | $83 |
| Operating Costs | $373 |
| Royalties | $149 |
| Net Cash Flow (undiscounted, pre-tax) | $516 |
The company is investigating opportunities to reduce capital costs, including the potential sharing of plant capital expenditure with its Tennant Creek alliance partners Emmerson Resources (ASX: ERM) and Tennant Minerals (ASX: TMS) as their projects progress. Another cost-saving avenue being explored is sourcing a second-hand plant more cheaply than a new one.
Understanding IOCG Deposits: The Geology Behind Orlando
The Orlando deposit is classified as an iron oxide copper-gold (IOCG) style of mineralisation. IOCG deposits form when iron-rich hydrothermal fluids deposit minerals in structural traps, such as shear zones. These deposits are characterised by being structurally controlled, with mineralisation often occurring in pipe-like, brecciated bodies within fault zones.
At Orlando, gold-copper mineralisation is predominantly hosted in small to medium-sized lenses within sheared ironstone. The mineralisation includes chalcopyrite as the primary copper mineral, which has undergone oxidation within the weathered horizon, forming secondary copper minerals such as malachite, chalcocite, and covellite.
This deposit type is globally significant, with other famous examples including Olympic Dam in South Australia and Candelaria in Chile. IOCG deposits are valued for their polymetallic nature, often containing valuable by-products beyond the primary copper and gold.
Next Steps and Timeline
Based on the positive CuFe Orlando project study results, CuFe's Board of Directors has endorsed proceeding to a Feasibility Study. Key focus areas for the next phase include:
- Conversion of inferred resources to indicated to facilitate statement of an Ore Reserve
- Geotechnical drilling and assessment of the southern wall cutback
- Groundwater studies and modelling
- Initiation of regulatory approvals
- Traditional owner and pastoralist land access negotiations
- Further flotation test work with an emphasis on fresh sulfide ore types
The company will also investigate options for reducing capital expenditure, including the potential use of second-hand processing equipment.
Strategic Advantages and Growth Potential
CuFe has several strategic advantages that enhance the Orlando project's appeal:
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Location in established mining region: The project is located near Tennant Creek, a well-established mining area with existing infrastructure including roads, rail, airport, and gas pipeline.
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Historical mining data: Orlando was previously mined on both open pit and underground bases, providing valuable data and reducing exploration risk.
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Resource expansion potential: The current CuFe Orlando project study only considers about one-third of CuFe's total resource at Tennant Creek, with significant opportunity to extend mine life.
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Industry interest: The company reports strong inbound inquiries regarding offtake and investment from leading trading houses and strategic investors.
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Rising commodity prices: With copper prices having increased approximately 25% and gold prices around 10% since the historical mining ceased in the late 1990s, the project economics are significantly improved.
Why Investors Should Track CuFe
The Orlando project represents a compelling investment case for several reasons:
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Near-term production potential: With a payback period of less than two years and strong economics, the project has a clear path to generating cash flow.
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Exposure to critical metals: Copper is essential for the global energy transition, with demand expected to significantly outpace supply in coming years.
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Significant upside potential: The current CuFe Orlando project study represents only about one-third of the company's resource base at Tennant Creek.
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Strong industry interest: The company reports increasing interest from strategic players and customers, which could lead to favourable offtake or funding arrangements.
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Experienced management: CuFe has a track record of successful project development and financing, including previous arrangements with major industry players like Glencore.
With the copper market tightening and prices expected to rise as the global energy transition accelerates, CuFe's Orlando project offers investors exposure to a near-term, high-quality copper-gold development opportunity with robust economics and significant growth potential. Furthermore, recent high-grade gold discoveries in the region, such as those at Inca Minerals' Hurricane Project, highlight the promising mineral potential in this part of Australia.
The Orlando project joins a growing list of promising Australian mining developments, including Hammer Metals' recent gold-copper discoveries in North Queensland and Matsa Resources' high-grade gold hits at their Fortitude North Project. In the wider resources sector, other significant developments include Vital Metals securing funding for their rare earth project and CZR Resources receiving a major offer for their Robe River project.
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