For resource companies, it can be hard to keep investors interested during the lull between discovery and development. During those years the story shifts from exciting exploration results to endless studies of metallurgy, hydrography, power supply options and the like. This work is essential to mine development, but the news it produces rarely moves markets.

Investors remain nonplussed until those studies become major project advancements, like a feasibility study or a development permit those few and far between project milestones that often remind investors why mining projects are worth the wait.

Such was the case when Western Copper and Gold (WRN-T, WRN-X) announced completing a feasibility study for its Casino copper-gold-molybdenum project in the Yukon.

Western Copper’s share price, which languished near 70� in the later months of 2012, jumped 63% in the week leading up to the release. On the big day it gained another 13� to reach USD 1.45. It’s a far cry from the USD 4 peak that Western Copper shares were worth in early 2011 but still a major improvement and it’s one Western Copper’s management earned.

Casino is a huge porphyry copper, gold moly deposit 380 kilometers northwest of Whitehorse. There are billions of pounds of copper and millions of ounces of gold in the ground at Casino but the isolated project presents serious infrastructure challenges that Western Copper has addressed head-on in the new feasibility study.

The company improved the economics of recovering gold from the oxide cap by switching from a run of mine dump leach to a coarse crush and conveyor stack operation that boosts gold recoveries to 66% from 50%. This increase almost doubles the reserve tonnes of gold oxide ore.

And in addressing the biggest infrastructure challenge, Western Copper’s new plan for Casino includes USD 209 million natural gas power plant. Previous plans incorporated a coal fired power plant at a cost of USD 550 million. A mine at Casino has to be self-powered, because the project is a long ways from the Yukon grid and would use more power than the entire territory uses today.

Big mines simply use a lot of power and Casino would be a big mine. The project is planned as an open pit operation with a concentrator processing 120,000 tonnes per day, plus a gold heap leach facility processing 25,000 tonnes per day.

Costs are expected to total USD 2.5 billion, which would be repaid in three years due to a 20.1% after tax internal rate of return. Casino carries an after tax net present value of USD 1.8 billion, using an 8% discount rate. These numbers are based on long-term metal price projections of USD 3 per lb. copper, USD 14 per lb. moly, USD 1,400 per oz. gold and USD 25 per oz. silver.

The deposit at Casino is a large porphyry. The upper oxide layer bears only gold and silver, its copper having been leached out and redeposited in a supergene layer just above the main body of sulphide mineralization. Oxide reserves stand at 157.4 million proven and probable tonnes grading 0.292 gram gold per tonne and 2.21 grams silver per tonne, which is enough to feed the leaching operation for 18 years. Sulphide reserves total 965.2 million proven and probable tonnes enough to feed the mill for 22 years.

Positive operating economics make Casino’s initial capital costs more palatable. The USD 2.46 billion outlay has to cover mining equipment, milling and heap leach infrastructure, a camp and airstrip, the aforementioned power plant and a 132 kilometers all weather road. The road alone is expected to cost USD 99 million.