Cactus Mine Project – Overview

The mineralized domains are consistent with domaining for porphyry copper systems. Mineralized domains represent combinations of rock type and copper mineral zonation associated with secondary copper enrichment weathering processes. The main mineral zones being leached, oxide, enriched, and primary. Mineral zones are determined by logging and the assay attributes of sequential copper analyses.

Mineral reserve estimates are derived from the Measured and Indicated mineral resource estimate (MRE) prepared by ALS Geo Resources (see Company’s press release dated SEPT 16, 2025). Measured and Indicated mineral resources were converted to Proven and Probable mineral reserves based on design guidelines and applicable modifying factors and are shown in the tables below. For more details relating to the 2025 mineral reserves and mineral resource estimates, please refer to the press release dated October 20, 2025, a copy of which is available on SEDAR+ (www.sedarplus.ca) under the Company’s issuer profile and the Company’s website (www.arizonasonoran.com).

Mineral Reserve Estimate

NOTES:
1.    Mineral Reserves have an effective date of September 17, 2025. The Qualified Person for the open pit estimates of Parks/Salyer and Cactus West is Gordon Zurowski of AGP Mining Consultants Inc.
2.    The Mineral Reserves were estimated in accordance with the CIM Definition Standards for Mineral Resources and Reserves;
3.    The Mineral Reserves are supported by an open pit mine plan, based on designs and schedules, guided by relevant optimization procedures. Inputs to that process are: 
4.    Metal prices of Cu $4.20/lb
a.    Processing costs which are variable and based upon material type, processing destination, copper grade, and copper recovery. Processing costs include a fixed unit cost component of $1.50/t, a net acid consumption cost, and a $0.33/lb cost for refining and selling copper cathode.  
b.    General and administration cost of $0.40/t processed.
c.    Spatially variable royalty costs of 2.50%, 2.54% and 0.00% for Parks/Salyer and 2.54% for Cactus West
d.    Process recoveries which are variable based upon total soluble copper grade (CU-AS + CU-CN).
e.    Open pit geotechnical design criteria from Call and Nicholas Inc.
f.    Open pit mining costs including an escalation factor with pit depth and variable base costs by material type to reflect differing blasting requirements.
5.    No allowance for mining dilution or ore loss has been provided in the open pit mining inventories.
6.    Ore/Waste delineation in open pit areas was based on a Block Value cut-off of $0/t considering metal prices, recoveries, royalties, process, and G&A costs as per LG shell parameters stated above.  
7.    The life-of-mine (LoM) stripping ratio in tons is 3.3.1.
8.    All figures are rounded to reflect the relative accuracy of the estimate.   Totals may not sum due to rounding as required by reporting guidelines.

Mineral Resource Estimate

NOTES:
1.    Mineral Resources are inclusive of Mineral Reserves.
2.    Total soluble copper grades (Cu TSol) are reported using sequential assaying to calculate the soluble copper grade. Leachable material includes oxide and secondary enriched material types. Primary includes Primary Sulfide material. Tons are reported as short tons.
3.    Stockpile mineral resource estimates have an effective date of March 1, 2022, Cactus and Parks/Salyer mineral resource estimates have an effective date of September 16, 2025. All mineral resource estimates use a copper price of US$4.20/lb.
4.    Technical and economic parameters defining mineral resource conceptual pit shells: mining cost US$2.43/t; G&A US$0.55/t, 10% dilution, and 44°-46° pit slope angle.
5.    Technical and economic parameters defining underground mineral resource estimates: mining cost US$27.62/t, G&A US$0.55/t, and 5% dilution. Underground mineral resource estimates are only reported for material located outside of the conceptual open pit mineral resource estimate shells. Designation as open pit or underground mineral resources are conceptual and not indicative of the mining method that may be employed at the mine design stage.
6.    Technical and economic parameters defining processing: Oxide heap leach (HL) processing cost of US$2.24/t assuming 86.3% recoveries, enriched HL processing cost of US$2.13/t assuming 90.5% recoveries, sulphide mill processing cost of US$8.50/t assuming 92% recoveries. HL selling cost of US$0.27/lb; Mill selling cost of US$0.62/lb.
7.    Royalties of 2.54% applies to the Cactus private lands and an assumed 2.50% applies to state lands. No royalties apply to the Parks/Salyer South (formerly, the MainSpring property).
8.    Variable cut-off grades were reported depending on material type, conceptual mining method, potential processing method, and applicable royalties. For Cactus private lands and state lands - Oxide conceptual open pit or underground material = 0.087% or 0.483% TSol respectively; conceptual enriched open pit or underground material = 0.081% or 0.459% TSol respectively; conceptual Primary Sulphide open pit or underground material = 0.197% or 0.600% CuT respectively. For Parks/Salyer South – conceptual Oxide open pit or underground material = 0.085% or 0.471% TSol respectively; enriched open pit or underground material = 0.079% or 0.447% TSol respectively; conceptual Primary Sulphide open pit or underground material = 0.192% or 0.585% CuT respectively. Stockpile cutoff = 0.095% TSol.
9.    Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, sociopolitical, marketing, or other relevant factors. See also more detailed Cautionary Statements at the end of this press release.
10.    The quantity and grade of reported Inferred mineral resources in this estimate are uncertain in nature and there is insufficient exploration to define these Inferred mineral resources as an Indicated or Measured mineral resource estimate; it is uncertain if further exploration will result in upgrading Inferred mineral resources to an Indicated or Measured classification. See also more detailed Cautionary Statements at the end of this press release.
11.    Totals may not add up due to rounding.

FIGURE 4: Cactus Project Mineral Resources 
 

Cactus PFS Summary:

Notes:
*Non-IFRS financial measure; see “Non-IFRS Financial Measures”. 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. AIC additionally includes taxes and initial capital.
(1) Life of mine excludes years 21 and 22, during which operations consist solely of SXEW processing

The capital cost estimates for this PFS were developed with a -/+20% accuracy and an estimated development contingency of 18% for plant and site and 5% mining equipment, according to the Association of the Advancement of Cost Engineering International (AACE) Class 4 estimate requirements. The estimates include the cost to complete the design, engineering, procurement, construction, and commissioning of all process plant facilities. The Company expects to produce LME Grade A copper cathodes directly onsite. 

The mine plan establishes onsite copper cathode production from conventional heap leach and SXEW processing of the oxide and enriched material. Mine operations are expected to use conventional truck and shovel and two-stage crushing. Truck loading of the heap leach pad in the first three years then pivoting to conventional stacking. The tank house will start with a 70,000 ton per year facility with the addition of a second facility of same size, ready for use between years three and four.  Production from the heap will reach 140,000 tons per year from year five. Average annual cathode production for the first 10 years is expected to be 113,000 tons. A total of 2,210 million tons is expected to be mined (waste + ore), including a total of 513 million tons processed, resulting in the recovery of 3,988 million pounds or 1,994,000 tons of copper cathodes over the LoM.

Feed to the heap leach pad will be oxide and enriched ore from the Parks/Salyer and Cactus West open pits.

NPV and IRR Sensitivities⁽¹⁾

^{Revenue, NPV8% and IRR Sensitivity Based on Copper Price}

(1) No COMEX premium applied to the Base Case study 
(2) COMEX Spot pricing assumed at $5.00 

Conventional Mining and Processing Operations
For the PFS, the basis of the design for material handling equipment is forecasted at an annual operating throughput of 28,000,000 dry tons of ore per year placed on the heap leach pad. The Parks/Salyer and Cactus West open pits will provide ore feed to the leach pad from year 1 through year 20 at variable rates not less than an estimated 18 million tons and not more than 28 million tons per annum. Crushing rates are variable to accommodate constraints in the electrowinning circuit and avoid building large inventories on the leach pad. The mining sequence has been designed to balance stripping requirements under this constraint for efficient plant operations.  

The Cactus Project process plant will consist of a two-stage crushing and screening plant ahead of heap leach. The pregnant leach solution (PLS) will be processed in a solvent extraction (SX) and electrowinning (EW) plant. The SXEW plant process design will include three extraction settlers, one strip settler, a tank house, and initial electrowinning cathode capacity of 70,000 tons per year followed by an expansion that would double capacity to 140,000 tons per year between years three and four.

A total of 1,839.6 million tons of material is projected to be mined from the Parks/Salyer pit, including 373.8 million tons of proven and probable mineral reserve leach ore at a 0.59% total copper grade and a strip ratio of 3.9:1. A total of 368.9 Mt of material is projected to be mined from the Cactus West pit, including 139.1 Mt of proven and probable mineral reserve leach ore at a 0.33% total copper grade and a strip ratio of 1.7:1. The LoM strip ratio is 3.3:1 combined.

The Parks/Salyer open pit is planned to be mined in seven phases (0-6), while the Cactus West open pit is planned to be mined in two phases (1-2). The detailed designs for the Parks/Salyer and Cactus West open pits are based on wall slope parameters received from Call and Nicholas Inc. (CNI) in June 2025. Equipment sizing for ramps and working benches are based on the use of 320-ton rigid frame trucks. The road width design is 140 feet (42.6 m) with a maximum ramp gradient of 10%. Working benches are designed at 40 feet (12.2 m) with placement of safety berms of variable width on every bench. Geotechnical berms of varying width will be used in places to reduce overall slope angles in Parks/Salyer to approximately 40 degrees, when this is not accomplished with ramp widths alone.  

Copper cathodes will be produced directly onsite via heap leach and SXEW, including a three-year ramp up period. The Cactus heap leaching process design includes crushing of all material types to a minus 3/4” P80 size for leaching. All material types will be leached on a single pad with an initial leaching cycle of 180 days. Three 180-day leach cycles have been assumed over a three-year period, as the practical limit for effective recovery based on experience and hydrodynamic analysis of the materials by HydroGeoSense, an independent consultant. Gross acid usage is estimated to be 18.5 lbs per ton and net acid usage of 7.0 pounds per ton at a cost of $160 per ton.

A 95% heap efficiency factor has been applied to relate column tests to operational heap copper extractions. This allows for inefficiencies in the heap operations. The recommended copper recovery projections include this heap efficiency factor. 

In an effort to focus on higher quality ore tons, the existing Stockpile has been removed from the mine plan and will be screened for use of over liner on the leach pads. Cactus East and primary sulphides, excepting those extracted while targeting oxides and enriched materials, have also been removed from the mine plan, in favour of future optimization opportunities. 

Average annual water consumption is planned at approximately 2,050 gallons per minute, the equivalent of 3,300 acre feet per year, well within ASCU’s permitted 3,736 acre feet per year industrial use allocation, using in place onsite wells.

Costs and Economics 
The estimated total LoM costs, operating costs per ton ($/ton) of processed material, and dollars per pound ($/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 the royalty expense. The AISC additionally includes sustaining capital expenditures, reclamation & closure, while AIC further includes initial capital expenditures, property and severance taxes.  

Mining operating cost estimates, prepared by AGP Mining Consultants Inc., are based on Company-managed mining activities using an owner-operator model. Process operating cost estimates were prepared by M3 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). 

LoM Operating and Production Costs Estimates

LoM Operating Cost and Cash Flow Estimates

Capital Cost Estimates

The Cactus Project is a brownfield project located approximately 6 miles (10 kilometres) northwest of the city of Casa Grande and 40 road miles south-southwest of the Greater Phoenix metropolitan area in Arizona. The Greater Phoenix area is a major population centre (approximately 4.8 million people) with a major airport and transportation hub and well-developed infrastructure and services that support the mining industry. The Cactus Project is directly accessible by state highways and connected to interstate highway 10. During historic ASARCO operations (1974-1984), a rail spur was connected directly with the Union Pacific Railroad to ship concentrates to its El Paso refinery in Texas; while the spur has been removed, the onsite rail line is still in existence. Current onsite infrastructure includes power lines and substation, water wells and a water pond, geological buildings, core sheds and administrative offices, contributing to a low capital intensity and robust economics.

Current onsite and nearby infrastructure includes:

• Onsite administration buildings, geology, core storage, substation and power lines, parking lot and access roads
• Power via onsite substation for $0.06/kWh (current year average)
• Paved access roads and easy access to Interstate Highways I-8 and I-10 
• Union Pacific railroad line adjacent to the Cactus Project
• Casa Grande, Maricopa, Phoenix and Tucson are all located nearby to supply materials/consumables in addition to a skilled labour pool
• Adequate permitted groundwater available onsite, with potential for offsetting effluent water supply from the City of Casa Grande
• Flat land and low altitude
• Located adjacent to the City of Casa Grande industrial area

The Cactus Project will require the onsite facilities listed below, with no offsite infrastructure needed:

• Mining facilities include a truck shop with integrated mine engineering offices, truck wash, tire change station, heavy vehicle fuel station, light vehicle fuel station, and explosives storage 
• Process facilities include the crushing facilities, SXEW process plant, reagents storage, process plant maintenance workshop, process plant lab, warehouse, and freshwater infrastructure
• Heap leach pads, PLS and Stormwater ponds, and associated equipment
• Power supply, distribution, and associated electrical rooms
• Ancillary facilities include process plant mine services guardhouses, administration trailer, maintenance structures, and weighing scale
• Catchments, ponds, drainage, and other site water management infrastructure
• The location of site facilities was based on the following criteria:
  • Locate facilities within the established boundaries
  • Minimize initial capital by using existing facilities, topography and infrastructure, where possible
  • Comply with Code of Federal Regulations (CFR) Title 14 Part 77: Safe, Efficient Use, and Preservation of the Navigable Airspace, for potential obstructions near Casa Grande Municipal Airport
  • Locate the rock storage facilities near the mine pits to reduce haul distance

The Cactus Project is 100% owned by ASCU through its wholly owned subsidiary Cactus 110 LLC, and encompasses an area of approximately 7,843 acres. The Cactus Project includes exploration and mining on private land and Arizona State Land Department ("ASLD”) leases. There is no federal nexus for permitting the Cactus Project and all permitting is limited to State and local required permits including the Aquifer Protection Permit, Industrial Air permits and the Mined Land Reclamation Permit, each of which ASCU has already received from regulators pertaining to the 2021 PEA. Permitting amendments will be submitted to address changes in the mine plan presented in this PFS, with an expected completion date in 2H 2026.

In keeping with ASCU's community engagement and partnership standards, the Cactus Project will be developed with a plan to establish and maintain the support of its host communities. ASCU commenced community outreach at the earliest stages of the Project and is currently evaluating and building partnerships within the community. ASCU understands the importance of outreach during its development and throughout the life of the mine. ASCU is encouraged by the positive response to the project from the community. Its status as a “brownfields” project makes it potentially more appealing than a new mine might be.

ASCU has a well-developed community engagement plan that it has implemented through numerous public meetings and outreach. With the presence of legacy mining in the Casa Grande area, the local community is supportive of the Cactus Project. There is no known significant opposition to the Cactus Project.

Metallurgical testwork used for the PFS shows good metallurgical recoveries from all deposits with no deleterious elements. Testing, including 20 additional columns, in the PFS shows an average of 75% of total copper extracted inclusive of heap efficiency factor of 95%. A column leach testing program for oxides and enriched sulphides, from Parks/Salyer and Cactus, is ongoing at BaseMet and McClelland labs (Tucson, AZ and Reno, NV, respectively). 

Mine waste is primarily alluvium and Gila conglomerate with minimal acid generation potential and a high neutralization potential. As a result, the mine waste reclamation efforts will be streamlined. 

Ecologically the site is within the Sonoran Desert Section of the Basin and Range Lowlands Province of Arizona in the lower Santa Cruz Basin.  Major host rocks are Precambrian Oracle Granite and Laramide monzonite porphyry and quartz monzonite porphyry. The porphyries intruded the older rocks to form mixed breccias; monolithic breccias and occur as large masses, poorly defined dike-like masses; and thin well-defined but discontinuous dikes.  The deposit is structurally complex with intense fracturing, faulting, and both pre-mineral and post-mineral brecciation. It is bounded on the east and west sides by normal faults.

Chalcocite and covellite are the only supergene sulfides recognized. The chalcocite blanket in the mineralized zone is irregular in thickness, grade, and continuity. The thickness of leached capping varies from less than 100 ft (30 m) to over 650 ft (198 m), with the thicker intercepts on the north side. Substantial quantities of oxidized copper minerals are found erratically distributed through the capping. Chrysocolla, brochantite, and malachite are the most common oxidized copper minerals. In upper portions of the capping, chrysocolla predominates, while brochantite and malachite predominate in the lower portions. 

The dominant hypogene alteration assemblages in the deposit are phyllic and potassic. The major hypogene sulfide minerals in the deposit are pyrite, chalcopyrite, and molybdenite. Hypogene sulfides occur as disseminated grains, veins, and vug fillings. 

The Cactus deposit is a portion of a large porphyry copper system that has been dismembered and displaced by Tertiary extensional faulting. Porphyry copper deposits form in areas of shallow magmatism within subduction-related tectonic environments (Berger et al., 2008). Cactus has typical characteristics of a porphyry copper deposit which Berger et al. (2008) define as follows.

• One wherein copper-bearing sulfides are localized in a network of fracture-controlled stockwork veinlets and as disseminated grains in the adjacent altered rock matrix.
• Alteration and mineralization at 1 km to 4 km depth are genetically related to magma reservoirs emplaced into the shallow crust (6 km to over 8 km), predominantly intermediate to silicic in composition, in magmatic arcs above subduction zones.
• Intrusive rock complexes that are emplaced immediately before porphyry deposit formation and that host the deposits are predominantly in the form of upright-vertical cylindrical stocks and/or complexes of dikes.
• Zones of phyllic-argillic and marginal propylitic alteration overlap or surround a potassic alteration assemblage.
• Copper may also be introduced during overprinting phyllic-argillic alteration events.

The American Smelting and Refining Company (ASARCO) geologists first discovered the Sacaton mineral deposit in the early 1960’s while examining an outcrop of leached capping composed of granite cut by several thin monzonite porphyry dikes. The nature of this original find indicated the likely presence of porphyry copper-type mineralization. Following this lead, ASARCO initiated a drilling program which defined copper mineralization zones, targeting the sulfide ores, despite significant oxide zones at shallow depths. The west deposit contained an ore body which was ultimately accessed through the open pit. The deeper east deposit was the target of potential mining by underground methods, and today contributes significantly to the project economics.

ASARCO operated the mine from 1974-1984 with approximately 400 direct mine jobs created locally during the peak of operations, and numerous indirect positions also created to service the mine. During the course of operations, ASARCO processed 32 million tons of `, producing 400 million pounds of copper in addition to silver and gold from the West ore body through an onsite flotation mill. In 1982, construction began on two production shafts to 1,800 ft (549 m) depth and a headframe to the southwest of the pit to access the higher-grade East zone via underground mining methods; however, development was suspended due to market conditions and in 1984 and the mine shut down. 

Whilst operating, the Sacaton mine site included crushing facilities, coarse ore stockpiles, a flotation mill, maintenance and administration buildings, core shack, a 390-acre tailings storage facility (TSF), a return water impoundment, an approximately 80-acre Alluvium Soil Storage Area, and a 500-acre stockpile of oxides and enriched material, at the time considered waste. All concentrates were shipped via rail to ASARCO’s smelter in Texas for processing into cathodes.

It is important to understand that while 16% of the worlds copper was produced in an SXEW plant in 2019 (see figure below), in the 1970’s, the process was still being refined and tested. ASARCO therefore planned the extraction of the Sacaton sulfide ore operations with a flotation mill, leaving behind a sizeable waste rock dump consisting of oxides and low-grade enriched ore and a significant in ground ore body. Today, ASCU can benefit from the refined SXEW process and will also be exploring the potential for primary ore leaching.

Following the 2020 ASARCO-funded mine site reclamation, the core shack, rail spur, power lines, waste rock and tailings facility remain in good condition. The vent raise and shaft are still in place; however, have had minimal assessment since the initial shut down of Cactus. 

No un-remediated liabilities were transferred to ASCU during the purchase. The reclamation provided the company with a baseline environmental study approved by the Arizona Department of Environmental Quality (ADEQ).