Gunnison Copper Corporation press release

Gunnison Copper Announces Updated Preliminary Economic Assessment of Its Flagship Gunnison Copper Project Reporting Post-Tax NPV8 of US$2.0 Billion

2026-02-26

TSX - Toronto Stock Exchange · Copper · Limestone · Molybdenum · United States · Technical Studies

Gunnison Copper Announces Updated Preliminary Economic Assessment of Its Flagship Gunnison Copper Project Reporting Post-Tax NPV8 of US$2.0 Billion

Phoenix, Arizona--(Newsfile Corp. - February 25, 2026) - Gunnison Copper Corp. (TSX: GCU) (OTCQB: GCUMF) (FSE: 3XS0) ("Gunnison" or the "Company") is pleased to announce the results of an updated NI 43-101 Preliminary Economic Assessment ("PEA" or "2026 PEA") on its 100%-owned Gunnison Copper Project in the Cochise Mining District, Arizona, United States ("Gunnison Project"). The PEA supersedes the previous PEA on the Gunnison Project released in December 2024 (the "2024 PEA") in all respects. All dollar amounts are in US dollars and "tons" refer to U.S. short tons (1 short ton equals approximately 0.91 metric tonnes or 2000 lbs).

Highlights:

Conventional open pit, heap leach, SX/EW operation producing 99.999% pure copper cathode intended to supply United States energy, data center, manufacturing, and defense supply chains

Straightforward mine plan consists primarily of oxide copper mineralized material with a life of mine material placed on the leach pad of 541 million tons at 0.43% total copper grade, including 25 million tons at 0.85% total copper grade from the Strong & Harris satellite deposit

Primary crushing on all, and secondary crushing on some material to improve copper recoveries

Average annual copper cathode production of 174 million pounds ("lbs") (87 thousand tons) for the first 15 years; enough to potentially supply over 11% of the current United States domestic refined copper metal production from mineralized material1. Total copper produced 3.2 billion lbs over a 21 year mine life.

Cash costs of $1.69, Sustaining Cash Costs of $2.00, and All-In Sustaining Cash Costs of $2.06 per pound of copper produced are in the lower half of the cost curve for copper mines globally.

Robust project economics in a variety of copper price environments, including $4.60/lb base case:

Copper Price Assumption: $4.60/lb Cu Consensus$5.75/lb Cu SPOT2

NPV8 (after-tax)$M 1,952 3,219

IRR (after-tax)%22.7%32.0%

Payback (after-tax)#Years 3.9 2.6

Avg Annual Free Cash Flow (Y1-Y15)$M366 514

High purity limestone overburden, previously treated as waste, is now used to produce a cement co-product to alleviate the regional cement supply deficit adding $130M NPV8%

Significant economic impact to Cochise County, State of Arizona, and the United States nationally through creation of over 53,000 jobs, $544 million in state and local county taxes, $1.37 billion in federal taxes, and $14.6 billion in total economic output3

The PEA is preliminary in nature and 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 conclusions reached in the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Dr. Stephen Twyerould, CEO, commented, "The updated PEA underscores the scale and compelling economics of the Gunnison Copper Project, positioning it as a significant future supplier to the American copper market and a key contributor to the domestic supply shortfall. At a consensus copper price of $4.60 per pound, the Project delivers an after-tax NPV8 of approximately US$2.0 billion, a 23% IRR, and an attractive 3.9 year payback, positioning Gunnison as one of the most financially compelling copper development projects in the United States. Importantly, 83% of the $692 million increase in NPV8% versus our 2024 preliminary economic assessment study is driven by operational enhancements within our control, including the addition of the high-grade Strong & Harris satellite deposit, material sorting, cement and limestone co-products, and optimization initiatives. With average annual production of 174 million pounds of 99.999% pure copper cathode in the first 15 years, lower-half-of-the-cost-curve operating metrics, and significant leverage to copper prices, we believe Gunnison offers shareholders meaningful exposure to a large-scale, long-life U.S. copper asset as we advance toward Pre-Feasibility, permitting, and project financing."

Table 1: Key Valuation Metrics at $4.60/lb Copper Price Base Case

Valuation Metrics (Unlevered)Unit2026 PEA

Net Present Value @ 8% (after-tax)$ millions 1,952

Net Present Value @ 10% (after-tax)$ millions 1,419

Internal Rate of return (after-tax)%22.7

Payback Period # years 3.9

EBITDA1 (annual average Y1-Y15)$ millions 488

EBITDA1 (annual average Y1-Y21)$ millions 435

Free Cash Flow1 (annual average Y1-Y15)$ millions 366

Free Cash Flow1 (annual average Y1-Y21)$ millions 329

Non-IFRS financial measure; see "Non-IFRS Financial Measures".

Table 2: Key Project Metrics

Project MetricsUnit2026 PEA

Construction Period# months24

Life of Mine# years21

Strip RatioWaste : Feed 2.56

Mineralized Material Minedmillion tons 641

High Purity Limestone Minedmillion tons 133

Alluvium-Gravel Waste Minedmillion tons 1,007

Hard-Rock Waste Minedmillion tons 501

Copper Grade of Material Placed on Leach Pad% CuT0.43%

Annual Crusher Throughput (max)million tons40

Copper Recovery - Global% CuT68.0%

Oxide / Enriched Recoveries% CuTSol90.2%

Primary Sulfide Recoveries (years 10 to 21)% CuSu59.9%

Recovered Copper Cathodemillion lbs3,187

Average Annual Copper Production (years 1-15)million lbs

000's tons174

87

Initial Capital (including contingency)$ millions1,544

Initial Capital Excluding Acid Plant$ millions1,261

Capital Intensity Excluding Acid Plant1$/ton Cu Capacity14,278

Profitability RatioNPV8% / Initial Capex1.3

Expansion Capital (including contingency)2$ millions682

Sustaining Capital3$ millions613

Cash Cost (C1)4$/lb Cu1.69

Sustaining Cash Cost5$/lb Cu2.00

All-In Sustaining Cash Cost6$/lb Cu2.06

Capital intensity is calculated as initial capital excluding acid plant, $1,261M, divided by maximum annual copper cathode plant capacity 88.3 Ktons

Expansion capital is expenditures to either build new facilities, for example the cement plant built in years 4-5, or to expand the capacity of initial facilities, for example increased capacity of leach pad

Sustaining Capital are expenditures to maintain initial facilities. Includes $186 million in deferred stripping costs. Includes sustaining capital for both the copper plant and the cement plant

Cash Cost includes mine operating, crushing and leaching, process plant operating, and general and administrative costs ("G&A")

Sustaining Cost includes Cash Cost, Sustaining Capex, Deferred Stripping, and Royalties

All-In Sustaining Cost (AISC) includes Sustaining Cost, Property Taxes, Severance Taxes, and Closure Costs. It excludes expansion and initial capital, and income taxes

The PEA was completed by M3 Engineering & Technology Corporation ("M3") of Tucson, AZ and is effective as of February 22, 2026. The Technical Report (the "Report") summarizing the results of the PEA and prepared in accordance with National Instrument ("NI") 43-101, will be filed on SEDAR+ and GCC's website within 45 days of this news release.

Updated Preliminary Economic Assessment Summary

The Project is in Cochise County, Arizona, approximately 65 miles east of Tucson and is held or controlled 100% by GCC. GCC has a successful track record of permitting and community relations. This, along with the fact that the Gunnison open pit has no federal permitting nexus, on flat ground with no identified endangered or threatened species or habitat, and no historical, archaeological, or Native American artefacts identified in prior studies, indicates the Company's prior permitting track record can be maintained.

Key Changes Versus the 2024 PEA

Key changes versus the 2024 PEA include various price deck changes beyond the control of management, such as the change in long-term copper price and various operating and capital cost escalation from 2024 to 2026, as well as non-price deck changes, including improvements such as mining the high-grade Strong & Harris satellite deposit.

Net Present Value at 8.00% discount rate is the selected metric to explain the changes since the previous PEA as this metric best captures the total economic return to the Company of the Gunnison Project.

Refer to the chart and text below for explanations of the change in valuation versus the 2024 PEA.

Chart 1: Change in Net Present Value 8.00% (NPV8%) - 2026 PEA versus 2024 PEA ($M)

To view an enhanced version of this graphic, please visit:

https://images.newsfilecorp.com/files/2744/285349_efb2444044252ba4_002full.jpg

Note: NPV8% variance bars should be considered approximations and include an element of estimation and interpretation. Cross correlations between variable changes may not be fully captured in each bar due to the sequence of applying changes in the financial model and other supplementary calculations performed for variables not directly changeable in the financial model.

The 2026 PEA NPV8% of $1,952M is an increase of $692M (+55%) from the 2024 PEA NPV8% of $1,260M. The increase is comprised of Price Deck changes of $117M, 17% of the increase, and Non-Price Deck changes of $576M, the remaining 83% of the increase. The following explains the key changes in more detail:

Price Deck Changes $117M - The main driver is the increase in long-term consensus copper price from $4.10/lb in the 2024 study to $4.60/lb in the 2026 study. Management uses analyst consensus given the extensive knowledge and expertise of the institutions involved and the overall reliance of the market and investors on consensus pricing. Acid, Sulfur, and Diesel prices were calculated on a delivered basis to site based on data purchased from leading industry consultants, actual delivered to site pricing, and direct discussions with logistics and commodity producers in the region. Mining opex, plant opex, and mining fleet escalation is based on inflation and other factors to escalate pricing from 2024 to 2026 real dollars and includes direct quotes from equipment manufacturers and service providers. Mining opex escalation also includes the impact of mining additional more costly blocks, due primarily to increased stripping requirements, from the bigger Gunnison main pit shell that the higher copper price makes economic to mine versus the smaller pit shell in the 2024 study.

Strong & Harris Satellite Deposit $189M - This satellite deposit, located only 1.9 miles from the processing plant, adds over 25 Mtons of high-grade material to the leach pad at 0.85% total copper grade to the processing plan over three years (Y11-Y13). Given the mining fleet and plant costs are fully supported already by the Gunnison Open Pit economics, the addition of the Strong & Harris material results in a significant NPV8% increase, extension of mine life, and increase in the leach pad head grade. No credits for zinc or silver are included in the new Strong and Harris mine and processing plan but could be considered an opportunity for later with additional processing infrastructure. As Strong & Harris is now included within the PEA, the prior technical report filed on SEDAR+ at www.sedarplus.ca entitled: "Estimated Mineral Resources and Preliminary Economic Analysis, Strong and Harris Copper-Zinc-Silver Project, Cochise County, Arizona" dated effective of September 9, 2021 has been superseded and is no longer a current technical report.

Material Sorter $84M - The mineralized Material Sorting equipment uses optical sensors to detect non-mineralized material amongst the crushed material prior to stacking on the leach pad and diverts it to waste. This reduces significantly the inclusion of non-mineralized material on the leach pad, thereby increasing the leached head grade and reducing acid consumption. In total, 97.7 Mtons of oxide material and 3.1Mtons of sulfide material is sorted to the waste stream over the life of mine, reducing mineralized material stacked and leached from 641.5 Mtons mined to 540.7 Mtons leached. The direct costs in initial capital for the equipment is $205.4M and the operating costs are $0.86/ton of mineralized material sorted and leached. Only the Martin and similar formations are included in the Material Sorting profile.

Geotechnical & Pit Slope $41M - Samples were collected in 2025 of the alluvium/conglomerate overburden at Gunnison as part of the HVA program. Their strength and geotechnical characters were analyzed and interpreted resulting in steeper pit walls than the previous study in 2024. In the alluvial overburden in 2024 the pit wall angles were determined to be 42 degrees, however the weakly cemented conglomerate component was determined to range from 45 to 49 degrees increasing in steepness with depth.

Acid Plant $19M - Due to reductions in total acid consumption in the 2026 PEA versus the 2024 PEA, the acid plant capacity was reduced by 10%, from 3,000 to 2,700 tons per day of acid production, along with other beneficial design modifications resulted in savings of $73M in initial capex. A decrease in profit per unit on third party acid sales partially offsets this improvement, due to higher operating costs.

Autonomous Haul Trucks $14M - Autonomous Haulage Systems (AHS) have become an accepted mining tool for modern mines. The effect of lowering operating costs is greater than the additional capital required for AHS. The trucks last longer, require less maintenance and are more efficient in delivering expected production rates.

Cement $130M and Limestone $21M Coproducts - In 2025, drilling and lab testing confirmed the limestone overburden on top of the Gunnison Pit to be a very high purity limestone suitable for producing several saleable products. Based on the specifications of the limestone determined by the lab testing, and market studies conducted by third party consultant firm Burgex, it was determined the highest and best use of the limestone is to process it into cement for sale into local and regional markets up to the annual amount the market is in deficit. Local market studies indicate a current deficit of over 1M tons of cement that is currently filled by foreign Mexican production with high freight costs and tariffs. As a result, a cement plant can be constructed with an output capacity of 1M tons of cement per year at an initial capital cost of $326M and it will sell cement for $157.21/ton. The plant will be constructed in Years 4 and 5 after full payback on initial capex has been reached and cumulative free cash flow is sufficient to pay for the cement plant capex. The rail facility included in the capex has a dedicated outbound capacity of 3M tons per year. Given 1M tons of cement will be sold per year, 2M tons of unrefined high grade limestone will also be sold to third parties at a price of $4.80/ton. The overall limestone overburden, at 133M tons, is a very large and special discovery and will continue to operate post Y21, the final year of copper production, until the resource is completely depleted in Y70. Opportunity exists for future expansion of the cement plant.

Tax Depreciation Rule Changes $30M - The One Big Beautiful Bill Act of 2025 permanently extended the Bonus Depreciation tax rule that permits 100% deduction of tangible property with a recovery period of 20 years or less, and other qualified improvement property, in the year of expenditure. This accelerated depreciation reduces cash income taxes paid in the earlier years of the project, improving NPV8%. The same total cash taxes are paid over the life of the mine but now are been paid later due to the accelerated deductions.

Mining Fleet Leasing $23M - The initial mining fleet is now assumed to be capital leased with interest only payments during the construction period that increases the NPV, partially offset by a 125 bps higher lease rate premium included in the lease for this feature. Mining fleet purchases included in sustaining capex are now also assumed to be leased with regular payment terms.

Other Non-Price Deck Changes $23M - All other changes

Financial Analysis

The PEA base case generates an after-tax Net Present Value of approximately $2.0 billion (at a discount rate of 8%) and an Internal Rate of Return (IRR) of 22.7%. This financial analysis is based on a non-levered cash flow model, revenues and costs priced in 2026 real US dollars, mid period discounting, and a valuation date set at the start of Project construction. The following tables detail key financial model inputs.

Table 3: Price Deck

Price Deck InputsUnit2026 PEA

Copper Price$/lb4.60

Net Copper Premium$/lb0.04

Molten Sulfur Delivered - Purchases$/ton160.00

Sulfuric Acid Delivered - Purchases$/ton210.00

Sulfuric Acid Delivered - Sales$/ton190.00

Diesel Delivered$/gallon2.96

Propane Delivered$/gallon2.00

Cement - Sales$/ton157.21

Limestone - Sales$/ton4.80

Power - Purchases & Sales$/kWh0.079

Price Deck Notes:

Copper price of $4.60/lb is based on analyst consensus pricing as of February 3, 2026

Net copper premium of $0.04/lb (metal premium $0.115/lb, or 2.5% of copper price, less freight to customer of $0.0725/lb)

Acid buying price of $210/ton if acid is required above the acid plant's capacity, and an acid selling price of $190/ton if excess acid is produced in any specific year. The acid selling price includes the cost of truck delivery from the Gunnison site to assumed local purchasers

The acid plant generates electricity equivalent to a 26 MW power plant. The power generated during the life of the copper mine is completely used in the operation of the mine and process plant. Following the closure of the copper mine, power generation will be completely used by the cement plant

Table 4: Capital Expenditures

The capital cost estimates for this PEA, shown in table below, were developed with a -25% to +30% accuracy. The Company has used an overall contingency of 20% in accordance with Association of the Advancement of Cost Engineering International (AACE) Class 5 estimate guidelines.

Capital Expenditures InputsUnitInitialExpansionSustaining

Direct Costs - Mine Costs$ million 294.0 - 77.7

Direct Costs - Deferred Stripping$ million

- 185.7

Direct Costs - Leach Pad$ million 76.1 201.2 -

Direct Costs - Crusher$ million 53.3 - -

Direct Costs - Ore Sorting$ million 205.4 - -

Direct Costs - SX-EX$ million 186.0 - -

Direct Costs - Freight$ million 52.4 16.0 -

Direct Costs - Subtotal$ million 867.0 217.3 263.4

Indirect Costs$ million 148.0 32.9 -

Owner's Costs$ million 65.6 - -

Contingency$ million 127.5 39.2

Subtotal$ million 1,208.1 289.4 263.4

Acid Plant$ million 282.3 - -

Infrastructure$ million 53.2 10.8 -

Sulfide Plant$ million - 56.6 -

Cement Plant$ million - 325.5 349.5

Total CAPEX$ million 1,543.7 682.3 612.9

Capital Expenditures Notes:

The cement plant is built over years 4 and 5, following payback on initial capex investment. Sufficient free cash flow is generated in year 4 post-payback to fully pay for the cement plant capex

Table 5: Operating Expenditures - Copper

Operating Expenditures - Copper Inputs$ Millions Total$/lb Cu Produced$/Ton

Mining - Before Deferred Stripping 4,179 1.31 $/ton mined

$/ton mined

$/ton mined1.83

Mining - Limestone Credits (231) (0.07)(0.10)

Mining - Deferred Stripping (186) (0.06)(0.08)

Mining - Subtotal 3,762 1.18 $/ton mined 1.65

Processing - Heap Leach 1,146 0.36 $/ton leached 2.12

Processing - Material Sorting 218 0.07 $/ton sorted 0.86

Processing - SX/EW 636 0.20 $/ton leached 1.18

Processing - Subtotal 2,000 0.63 $/ton leached 3.70

G&A - Onsite 142 0.04 $/ton mined 0.22

G&A - Limestone Credits (6) (0.00) $/ton mined (0.01)

Byproduct Credits - Acid Sales (503) (0.16) $/ton mined (0.78)

Cash Cost (C1) 5,396 1.69 $/ton mined 8.41

Sustaining Capex - Mining 78 0.02 $/ton mined 0.12

Sustaining Capex - Deferred Stripping 186 0.06 $/ton mined 0.29

Sustaining Capex - Subtotal 263 0.08 $/ton mined 0.41

Royalties 715 0.22 $/ton mined 1.11

Sustaining Cash Cost 6,374 2.00 $/ton mined 9.94

Taxes - Property Tax 64 0.02 $/ton mined 0.10

Taxes - Severance Tax 109 0.03 $/ton mined 0.17

Taxes - Subtotal 173 0.05 $/ton mined 0.27

Closure - Reclamation (Inc. Surety Bond) 72 0.02 $/ton mined 0.11