Mr. Paul Harbidge reports

FARADAY COPPER ANNOUNCES PEA FOR COPPER CREEK WITH NPV US$713M AND 4.2 BILLION POUNDS OF MEASURED AND INDICATED COPPER MINERAL RESOURCES

Faraday Copper Corp. has released the results from a preliminary economic assessment and an updated mineral resource estimate (MRE) for its Copper Creek project, located in Arizona, United States. The PEA provides an economically viable base case for the development of Copper Creek.

All financial results are in U.S. dollars unless otherwise stated. The company will hold a conference call and webcast on May 4, 2023, at 4:30 p.m. ET, to discuss the results of the PEA and MRE. Details are provided below.

Paul Harbidge, president and chief executive officer, commented: "In the 20 months since restarting technical activities at Copper Creek, we have delivered an MRE with 4.2 billion pounds of copper in the measured and indicated category, an economically robust PEA, and a pipeline of exploration targets. The PEA provides an excellent basis for the future development of Copper Creek and is the beginning of the Faraday story. The projected low initial capital and upfront open-pit mine unlocks a large underground operation, for a combined mine life of more than 30 years. The project is expected to grow over time as the property is endowed with numerous untested exploration targets. Importantly, the results from our ongoing 10,000-metre drill program, which are not incorporated in the current studies, are anticipated to contribute to this growth in the future. We are planning a further 20,000-metre drill program to commence in the fourth quarter of this year as we continue to advance the project and unlock value for our stakeholders."

Highlights of the Copper Creek PEA*:

• Attractive economics: posttax net present value (NPV) (7 per cent) of $713-million and internal rate of return (IRR) of 16 per cent and significant upside to higher metal prices;
• Strong stand-alone open-pit economics: stand-alone open-pit operation supports a pretax NPV (7 per cent) of $337-million;
• Robust project: open-pit mining provides a rapid payback on initial capital of four years and fully finances development of a bulk underground mine for a combined total mine life of 32 years;
• Long-life production profile: average anticipated payable production during active mining of 51,100 copper equivalent tonnes per year, with peak production of 82,100 tonnes CuEq in year two, generating 3.4 billion pounds payable CuEq metal over the anticipated life of mine (3.2 billion pounds copper, 45.1 million lb molybdenum and 9.7 million troy ounces silver);
• Low initial capital investment: $798-million, with a construction period of two years;
• Competitive operating cost profile: Average life-of-mine (LOM) production cash costs of $1.67 per lb copper and all-in sustaining costs (AISC) of $1.85 per lb copper;
• Favourable strip ratio: average open-pit strip ratio of 1 to 1.2 due to the nature of the near-surface breccia mineralization that allows sequencing of high-grade production;
• High metallurgical recoveries: over 94-per-cent average copper recovery from sulphide material, producing high-quality clean concentrates;
• Enhanced environmental, social and governance (ESG) practices: dry stack tailings to reduce water requirements and environmental footprint, as well as utilization of renewable solar power to reduce emissions;
• Updated mineral resource estimate: an updated MRE is the basis for the PEA; measured and indicated resources are 421.9 million tonnes at an average grade of 0.45 per cent copper for a contained 4.2 billion pounds of copper;
• Exploration upside: the mineral resource remains open at depth and laterally, as highlighted by the intersection of massive sulphides beneath the Copper Prince breccia (see news release dated Jan. 17, 2023); in addition, there are over 400 breccia occurrences mapped at surface, 35 drill tested and 17 included in this MRE, as well as additional porphyry potential.

Zach Allwright, vice-president, projects and evaluations, stated: "The outcome of the PEA demonstrates the potential for Copper Creek to become a significant source of U.S. domestic copper production. The study is underpinned by empirical data, acquired through extensive geological and geotechnical assessments, comprehensive metallurgical testwork, first principles costing, and diligent schedule optimization. This base case forms a foundation on which the company can continue to add value through resource expansion, new discoveries on the property, the potential to add a gold byproduct and various opportunities to increase the production capacity."

* The metrics presented in this news release are based on a PEA that includes an economic analysis of the potential viability of mineral resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability. This PEA is preliminary in nature, 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 and there is no certainty the PEA will be realized.

Conference call and webcast

Investors, media and the public are invited to join the conference call and webcast, during which management will discuss the result of the Copper Creek PEA.

Date:  Thursday, May 4, 2023, at 1:30 p.m. PT (4:30 p.m. ET)

Toll-free in United States and Canada:  1-800-319-4610

All other callers:  1-604-638-5340

A webcast will be available.

Webcast replay:  available on the company's website for one year and by phone at 1-855-669-9658 or 604-674-8052 for three months; please enter passcode 3013 followed by the number sign

PEA overview

The 2023 PEA outlines a low-initial-capital project that processes approximately 345 million tonnes of mill feed material from a combined open-pit and underground operation. The PEA contemplates a 30,000-tonne-per-day conventional flotation process plant producing high-quality copper and molybdenum concentrates, with silver byproduct credits. The PEA also captures value from an additional 20 Mt of oxide material sourced from prestrip mining and processed through a heap leach facility (HLF) utilizing solvent extraction and electrowinning (SXEW), further supporting a rapid payback on initial capital. The PEA does not incorporate any results from the phase 2 drill program, which is currently in progress and expected to conclude near the end of the second quarter of 2023.

Payback of initial capital is expected to occur in year four, with the posttax cash flows financing the expansionary capital, which includes the addition of a molybdenum circuit and development of the underground footprint, both of which commence in year three.

Design and production profile overview

The open-pit and underground mine plans were developed by SRK Consulting Inc. Future mining is expected to be by contractor-operated conventional truck-and-shovel method at surface and during underground development (preproduction), transitioning to owner-operated block caving underground method to achieve a base annual mill feed rate of 11.0 Mt (30,000 tpd). Surface mining provides mill feed until year 11. A four-year open-pit ramp down coincides with the underground production ramp-up, achieving steady-state production by year 12 and continuing until year 29. Current mine plan optimization has applied an open-pit stockpiling strategy whereby low-grade material mined from the pits would be stockpiled and processed as supplementary mill feed or fed to the mill at the end of the mine life. The low-grade stockpile peaks at 56.5 Mt, 20.0 Mt of which would be processed as supplementary feed between years seven and 11, and the remaining 36.5 Mt would be processed between years 28 and 32.

The base annual throughput would be primarily of sulphide material, with some transitional material mined from the open pits. Oxide material recovered near surface in the early years of the anticipated mine life would be segregated and processed separately in a heap leach facility, in addition to the 11.0 Mt base annual throughput.

Open-pit mine design and schedule

Open-pit mine designs utilized the updated MRE. The resource model was imported into Minesight mine planning software, where a Lerch Grossman algorithm was applied to the model to determine possible open-pit limits. Each open-pit area was assessed across a series of revenue factors to target the optimal balance of NPV contribution, footprint requirements and strip ratio. The results of the assessment culminated in pit shell selections that are reflective of an average revenue factor of 0.81 ($3.06 per lb copper). Upon selection of discrete pit shells for each pit area, a full pit design was completed in alignment with geotechnical assumptions developed as part of the PEA. All pit designs incorporated ramp placement, haulage networks, pit phasing and backfill opportunities.

Open pits include Mammoth, the largest open pit, and several smaller satellite pits. Mammoth would be mined in three phases, generally from the northwest to the southeast, while each of the satellite pits would be a single phase.

Mineralization is hosted in three material types: sulphide, transitional and oxide. Sulphide and transitional material would be processed at the flotation plant while oxide material would be heap leached.

Cut-off grades (COG) are dictated by metal price, and consider material type, processing costs, recovery and selling costs. The direct feed CuEq COG for sulphide and oxide material is 0.13 per cent CuEq, while for transitional material, it is 0.14 per cent CuEq. Material reporting to a stockpile has a slightly higher COG than direct mill feed material to account for rehandling costs.

Grade bins were established to aid in mine planning, including low-grade, medium-grade and high-grade bins. Low-grade material reports to stockpiles unless available throughput allows direct feed to the mill in that period. The grade bins are defined by per cent copper for sulphide and transitional material.

Where possible, waste is proposed to be backfilled into depleted pits, which allows for shorter haulage and reduced surface disturbance. Otherwise, waste would be sent to the external waste facility. The waste facilities would be designed to simplify closure and allow for progressive reclamation.

It is expected that mining at the Mammoth pit would commence during the preproduction period and continue through the entirety of surface mining, while satellite pits would be mined in a sequence driven by value and haulage efficiencies. Mineralized material above COG would be sent to either the run-of-mine pad directly south of the Old Reliable pit or to one of two low-grade stockpiles farther to the west. Oxide material would be crushed immediately and conveyed to the heap leach facility adjacent to the processing plant.

Copper Prince would be the first satellite pit to be mined. Waste in the early periods would be sent east to the external storage facility. Once the Copper Prince and Globe pits are mined out in year three, the pits would be expected to serve as a backfill facility for waste rock from the Mammoth, Globe and Rum pits. After Old Reliable is depleted in year four, it would serve as a backfill facility for Mammoth waste. By year five and six, phases 2 and 3 of the Mammoth pit would be advancing along with the eastern satellite pits Marsha, Bald and Jailhouse (the latter two would be mined together). Waste from these phases would be sent to the adjacent external waste facility due to haulage efficiencies. Mineralized material from Marsha and Bald/Jailhouse would be hauled along in-pit haul roads in the Mammoth pit. The Rum pit is a small pit located in the northwest of the project area and would be mined in year seven. Open-pit mining is expected to conclude in year eight, when Bald is exhausted.

Underground mine design and schedule

The Keel and American Eagle block cave footprints and production schedule were generated using Geovia's footprint finder software, an industry standard for cave optimization and scheduling, using the resource model. The economic assumptions applied in the footprint finder optimization were maintained as per the resource constraints as part of the reasonable prospects for eventual economic extraction (RPEEE) process, except for the maximum height of cave draw being set to 500 metres. The footprint finder outcome was then manually optimized to prioritize the higher-grade cave blocks whilst targeting the most practical footprint geometry for sequencing and productive capacity. This exercise culminated in a PEA underground mill feed inventory of 211 Mt.

Preliminary mine development design and scheduling were completed in the Deswik suite, encompassing detailed lateral and vertical development designs for all primary and secondary infrastructure. Excavation profiles were applied to each development type, enabling discrete advance rates and costs to be applied, culminating in a practical integrated mine schedule.

The cave footprint(s) would be accessed through a twin decline system, providing access and material conveying to surface. The mine plan for the underground block cave contemplates development of the twin declines commencing in year three with initial cave production beginning six years after. Underground cave production would ramp up over approximately a three-year period and would achieve a steady-state production rate of 30,000 tpd in year 12. The Keel and American Eagle extraction horizons are located at approximately 900 m and 760 m below the portal elevation, respectively. The cave footprints are 300 m laterally offset. The average height of draw of the Keel and American Eagle domains is 375 m and 337 m, respectively. The maximum vertical height of draw was constrained to 500 m for the purpose of the PEA design.

Electric-drive loaders would deliver mill feed material to passes at the midpoint of each extraction-level drive, which connects to truck loading stations on the underlying haulage level. Trucks would haul mill feed material to one of three primary crushers, one servicing Keel and two servicing American Eagle. Following crushing, mill feed material would be conveyed 4.8 kilometres to surface through the dedicated conveyor decline. At surface, the mill feed material would be transferred to the surface overland conveyor and transported directly to the process plant.

Mine levels within and directly adjacent to the cave footprints comprise undercut, extraction, haulage and crushing, and ventilation levels. Total preproduction lateral development requirements are estimated to be 24,900 m, plus associated drawbell establishment. Underground development activity generates 9.7 Mt of material above COG and contributes to economic mill feed. Total lateral development requirements have been generated based on the mine design and are estimated to be approximately 32,200 m and 31,850 m of capital and operating development, respectively. A raise system from surface supplies fresh air to the mine levels, and is exhausted through the twin declines to the exhaust ventilation system. Total vertical development is estimated to be 6,400 m, composed predominantly of fresh air raises, return air raises and material passes.

Geotechnical

Geotechnical assessments of pit slope stability and underground caveability, including fragmentation analysis, subsidence and ground support requirements, were carried out by Call & Nicholas, Tucson (CNI). These assessments were based on geotechnical characterizations developed from geological assessments, core logging, downhole televiewing data and laboratory rock strength analysis from the phase 1 exploration drilling program (holes drilled between February and June, 2022). The geotechnical program was further supported by historical core logging data and prior geomechanical studies of the pit and underground deposits.

A geotechnical assessment of multiple methods was appraised for geotechnical assumptions and suitability, shortlisted to open-pit mining, block caving, sublevel caving and long-hole open stoping. The outcomes of the geotechnical assessment supported the selection of open-pit extraction for near-surface deposits (predominantly breccia) and extraction of the underground resource (predominantly porphyry) through block caving methods. Underground mining interaction with the open pits was also assessed to ensure mine sequencing accounts for adequate phasing and realistic operability. Upon method selection for the PEA, a comprehensive geotechnical design assumption report was developed to guide an optimal and practical mine plan.

Key geotechnical assessment highlights from the PEA include:

Open pit:

• Rock strength and joint orientations allow for favourable interramp slope angle between 50 and 53 degrees and overall slope angle of 50 degrees supporting low strip ratios.
• Assessment supports 24-metre double-bench height (12-metre single-bench height).
• Geotechnical domains defined by wall dip direction informed optimal ramp placement and haulage networks between pits and material destinations.

Underground block caving:

• Confirmed caveability of the rock mass with caving rate of 55 metres per year (15 centimetres per day) with no requirement for preconditioning currently deemed necessary;
• Productive capacity of the current underground resource footprint suggests 30 to 45 kilotonnes per day (11 to 16 mtpy);
• Rock mass quality within the footprint domain offers favourable conditions for drawpoint spacing that optimizes capital development requirements; the extraction level layout is to employ a herringbone configuration with extraction drive spacing of 32 m by 20 m;
• Thermistors located in vibrating-wire piezometers indicate in situ rock temperatures between 25 and 44 C, confirming the underground operation will benefit from favourable ventilation requirements.

Mineral processing

The company recently completed a metallurgical testwork program, utilizing samples from the phase 1 drilling to complement the historical testwork conducted by Mountain States R&D International (MSRDI) and Metcon Research. Metallurgical testing was conducted by ALS Metallurgy, Kamloops, and tailings filtration testing completed by BaseMet, Kamloops, with oversight by Ausenco Engineering USA South Inc., based in Tucson. This testwork program was designed to accomplish the following key objectives on samples taken throughout the open pit:

• Develop process design criteria with testwork results from spatially representative samples of the current mineral resource and grades;
• Comminution testwork to optimize grind size;
• Confirm flotation recoveries for both open-pit sulphide and transitional materials;
• Mineralogical analyses to inform future performance by domain;
• Solid-liquid separation testwork to confirm dry stack tailings performance.

The outcomes of the 2023 testwork were assimilated with the historical testwork from Metcon (2008 to 2012) and MSRDI (1997) to form the basis of the process design criteria for the PEA. The PEA process design applies a primary grind passing 80 mesh size of 190 microm for the sulphide material feed; however, whilst processing transitional material during earlier open-pit phases, a finer grind of 160 microm will be applied to achieve the recoveries reported herein for transitional material. A coarser grind (greater than 200 microm) may be optimized for sulphide materials in future with further testwork. Copper concentrate grade is estimated at 30 per cent, and molybdenum concentrate grade is estimated at 50 per cent.

The 2023 testwork program, paired with a detailed metallurgical review of previous data, confirmed the following:

• Sulphide zone materials responded well to froth flotation, with recoveries of greater than 94 per cent achieved at primary grind sizes of approximately 200 microm passing 80 mesh size;
• Metallurgical testing on open-pit representative samples complements historical testwork;
• Sulphide zone materials are predominantly chalcopyrite and bornite with low levels of pyrite;
• Transitional zone materials returned recoveries averaging 75 per cent after sulphidization;
• Historical testwork supports 75-per-cent copper recovery from oxides through heap leaching with sulphuric acid;
• Assay data and metallurgical testwork from variability sample concentrates confirmed no deleterious elements above penalty levels;
• Solid-liquid separation testwork confirmed processed material is amenable to dry stack tailing storage.

The simplified process flow sheet was developed based on recovery methods required for processing mineralized materials, and is supported by preliminary current and historical testwork, as well as financial evaluations. It includes a copper-molybdenum concentrator for sulphide and transitional minerals and a heap leach with SXEW operation for oxide minerals. The concentrator is designed to process, on average, 30,000 tpd (11 mtpy) of mineralized material.

Sulphide and transitional materials would be crushed, conveyed, ground and processed by bulk rougher flotation. Bulk rougher flotation concentrate would be reground and upgraded by bulk cleaner flotation. Both bulk rougher and cleaner tails would be gravity fed to the tails thickener, and bulk cleaner concentrate would be further processed by a copper-molybdenum separation circuit. Limited copper-molybdenum separation testing is available, and therefore, a typical molybdenum separation circuit recovery of 90 per cent is estimated. Molybdenum rougher flotation tails or copper concentrate would be thickened, filtered and loaded onto weighed trucks for transport by rail to the port. Five stages of cleaning would be required to upgrade the molybdenum rougher concentrate prior to thickening, filtering, drying and packaging for shipment.

The oxide heap leach operation would consist of three stages of crushing, agglomeration, heap stacking, leaching with sulphuric acid and cathode production by an SXEW facility. Oxide materials would be fed through the same primary crusher as the sulphide materials with a belt element analyzer diverting oxide materials to a separate temporary stockpile, where it would be crushed to three-eighths of an inch to improve leach performance on the heap.

Site infrastructure

The site layout is configured to optimize material-handling synergies between the open-pit and underground production to minimize environmental footprint and to prioritize the utilization of private and patented land to ensure operational scalability upon resource expansion. The project is expected to utilize existing infrastructure such as high-voltage power provision near the property, dual-site access roads (Copper Creek and Bunker Hill roads), major highway(s) for concentrate haulage and rail access with loadout facilities near the property.

The primary design objectives of the dry-stack tailings facility (DSTF) are the secure confinement of tailings and the protection of the regional groundwater and surface water during mine operations and closure. The design of the DSTF considers a staged development over the LOM and a stacking geometry that allow progressive reclamation in the form of slope cover.

The currently contemplated site arrangement considers primary surface infrastructure, including (but not limited to):

• Processing plant and supporting infrastructure:
  • Primary crusher and overland conveyor;
  • Crushed sulphide stockpile;
  • Process plant, which includes: semi-autogenous and ball mill crusher grinding circuit, copper-molybdenum bulk flotation and regrind, copper-molybdenum separation flotation, separate copper and molybdenum concentrate thickening, filtration and drying (molybdenum only), copper and molybdenum concentrate loadout and storage, tailings thickening, filtration and dry stacking, and reagent storage and distribution (including lime slaking, flotation reagents and flocculant);
• Heap leach operation:
  • Two-stage mobile cone crushing, agglomeration, conveying and stacking, lined pad, heap leaching irrigation system and solution collection, process ponds, solvent extraction, electrowinning, and tank farm;
  • The heap leach pad is designed to 20 Mt of crushed material capacity;
• Dry-stack tailings facility:
  • A preliminary siting and deposition technology study was performed to minimize water consumption and footprint; the design, in accordance with the global industry standard on tailing management, considers a rockfill stability embankment, unlined impoundment, and a seepage collection system and pond;
• Open pits, waste dumps, underground portals and other major infrastructure to support the operations, including: main substation and power distribution lines, a guard house, security gate and truck weigh scale, administrative buildings, a freshwater supply line and storage tank, site drainage and contact water management systems, including DSTF under drainage and seepage water ponds, a truck shop and mine dry facility, explosive storage, fuel depot, maintenance shop, and warehousing.

Capital costs

The capital cost estimate for the project processing and associated infrastructure was developed by Ausenco using an engineering, procurement and construction management (EPCM) project development approach. Initial, expansion, sustaining and closure capital cost estimates were developed for the project to reflect the phased approach of the project.

The cost estimates are based on detailed, mechanical and electrical equipment lists developed for the project's process design criteria. Pricing of the process equipment is based either on budgetary quotes obtained specifically for this project or on other recent Ausenco executed projects and studies of similar size and scope, regional labour rates, and man-hours associated with the physical installation of the equipment. Typical freight, growth and associated minor equipment costs required to operate the processing equipment were applied. Pricing for bulk commodities such as steel, concrete, in-plant piping, instrumentation, bulk electrical supply and platework was estimated by applying benchmarked percentages to the mechanical equipment supply. Ancillary facilities were sized for the anticipated staffing and priced according to historical estimates for similar-sized modular/prefabricated buildings. Material takeoffs for civil earthworks, the DSTF and overhead power line were generated and priced using regional construction labour rates and unit rates for bulk materials. These were obtained from Ausenco's database of current and historical assessments and executed projects. The heap leach facility was benchmarked against studies of similar size and scope. The installed process plant cost estimates also include $120-million for indirect project costs. These costs are anticipated to be incurred during implementation of the project by the owner, engineer or consultants in the design, procurement, construction, commissioning and construction contractor's indirect costs. These estimates have a base date of the first quarter of 2023.

All mining-related capital costs (in pit and underground) were estimated by SRK using a first principle approach and leveraging the preliminary mine design outputs for appropriate mine development requirements. The preliminary mine plan and associated mine initial, growth and sustaining capital were prepared using current North American contractor development rates and current equipment prices. In-mine infrastructure was estimated using first principle buildups for purchase and installation costs, which were based on recent quotations where applicable and/or leveraged SRK's database of open-pit and block caving projects and operations.

Initial capital costs are estimated to be $798-million, and sustaining/expansion capital costs are estimated at $1,859-million for a total LOM capital cost of $2,657-million. Expansion capital is associated with the process plant addition of a molybdenum circuit in year three and bringing the underground block cave into production.

The initial capital costs associated with heap leaching total $84-million (including 20-per-cent contingency), which are composed of an additional two-stage crushing infrastructure, a heap leach facility and an SXEW facility. The cost associated with the molybdenum circuit installation in year three totals $58-million (including 20-per-cent contingency). The initial capital costs associated with open-pit mining total $80-million as the surface operation is to be executed by a contractor. Most of the mining-related initial capital is for the prestrip activity, which requires approximately 17.5 Mt of waste movement and 9.5 Mt of low-grade material (sulphide and transitional) to be stockpiled for processing later in the mine life.

A progressive closure and reclamation approach is expected to be adopted for the project, totalling $170-million (including 20-per-cent contingency), spread over the last five years of the mine life. These costs are driven by surface disturbance calculations related to all mining, processing infrastructure and stockpiling. The estimation considers recontouring, revegetation activities, decommissioning costs, continuing monitoring and maintenance activities. A capital allowance of $50-million (including EPCM (engineering, procurement and construction management) and contingency) in year three has been incorporated to cover any costs associated with waterway management.

Variable contingencies were developed for processing and mining capital costs due to the detailed method of estimation for both. The initial capital cost estimation for the processing infrastructure has a 20-per-cent contingency application. On aggregate, the total initial capital cost estimation has a 15-per-cent contingency consideration. The following contingencies were applied to project capital costing:

• 25 per cent: contractor mobilization;
• 20 per cent: open-pit mining-related capital costs, crushing and material handling, process plant direct costs, DSTF, on-site and off-site infrastructure, process plant indirect costs, owner cost, and underground large excavations;
• 15 per cent: lateral and vertical underground mine development, crushers and conveyors, ventilation hardware and installation, mine buildings, mine services (pumping, power, air and safety), and mobile equipment.

Operating costs

Operating costs were developed from first principle costing based on the quantities generated from the preliminary mine design, mine production schedule and processing applications by material type.

The unit operating costs used in the PEA are summarized herein.

Future mining is expected to be a contractor-operated conventional truck-and-shovel method at surface and during underground development (preproduction), transitioning to owner-operated block caving underground method. Open-pit mining operating costs were developed from first principle costing and considered differential costs for material handling based on a haulage assessment, which included discrete costing for material that would be stockpiled and reclaimed for future processing.

The open-pit mining activity is expected to be conducted by a contractor, and therefore, costing is inclusive of contractor capital repayment (equipment) and all associated markups. The open-pit operating cost has been estimated at $2.43 per tonne mined and $1.47 per tonne for stockpile rehandling costs, resulting in an LOM average total open-pit material movement cost of $2.79 per tonne mined, which excludes costs attributed to waste material. Underground mining operating costs associated with block cave production have been estimated from first principle costing with discrete cost buildups for key activities such as drawpoint mucking, secondary breaking, crushing, conveying, mine services and maintenance, definition drilling, rehabilitation, and mine operating staff. The underground operating costs have been estimated at $7.30 per tonne mined.

Processing operating costs have been developed for all three material types with consideration of primary crushing (for open-pit processed material), conveyance reagent requirements, consumables, plant maintenance, power consumption, labour, and plant-specific general and administrative (G&A). Processing costs have been estimated as $5.91 and $5.74 per tonne for sulphide and transitional materials, respectively. The operating cost of the molybdenum plant contributes an 39 cents per tonne processed through the concentrator and will be applied starting in year three, when the molybdenum plant is commissioned and operational. Operating costs of the oxide heap leach have been estimates as $6.71 per tonne leached. An average site power unit cost of 6.5 cents per kilowatt-hour was assumed, based on a portion of expected power requirements coming from a proposed solar and battery facility.

G&A cost of $1.45 per tonne processed (exclusive of process-plant-related G&A) is composed of $1 per t processed based on regional benchmarks of comparative operational scale, plus 45 cents per t processed average over the life of mine related to Arizona property tax. The project would not require a camp facility as the location is easily accessible from the townsites of Mammoth, San Manuel and Oracle, as well as being approximately 80 road km northeast from the city of Tucson.

Tax

The LOM expected effective income tax rate of 14.4 per cent includes U.S. federal income taxes, state income taxes and state severance taxes. These were based on the Internal Revenue Code of 1986, as amended, and the regulations thereunder, and the Arizona Revised Statutes in effect as of March 31, 2023. Amounts were calculated based on modelling expected future cash flows with the following assumptions:

• The open-pit and underground mines would be treated as separate depletable properties under Section 614.
• The project would deduct mine development costs as incurred under Section 616(a) subject to Section 291(b)(2) adjustment for corporate taxpayers.
• The project would elect to depreciate long-lived assets under the unit of production basis under Section 168(f)(1), and all other assets would be depreciated under a modified accelerated cost recovery system in accordance with Rev. Proc. 87-56.
• All metal sales would be delivered outside of the United States and are therefore expected to be eligible for the foreign derived intangible income deduction under Section 250. The project would use a third party outside of the U.S. for concentrate treatment and refining.
• No Section 382 ownership change would occur during the construction or operation of the mine.

Arizona property taxes, which are included as an operating cost within G&A, were determined based on the current Arizona Department of Revenue Appraisal Manual for Centrally Valued Resource Properties and observable market precedents. The valuation of the project uses the cost approach for years one through five, a 60-per-cent/40-per-cent blend of the income and cost approaches during the middle of the mine life, and the cost approach again for the final five years of the mine life.

Cash flow details

A detailed breakdown of annual cash flows over the life of mine is provided herein.

Mineral resource estimate

The effective date of the MRE is Feb. 9, 2023, prepared by SRK. This resource represents an update to the MRE released in July, 2022, and incorporates phase 1 drill results and assay data from historical drill holes not previously sampled, together with the evaluation of 17 near-surface breccia units and the deeper porphyry zone.

Mineral resources have been updated based on the following:

• Drill hole database inclusive of phase 1 drilling results (as of Oct. 27, 2022);
• Updated geological model and breccia wire frame domain models based on logging of phase 1 and selected historical drill core;
• Increase of rock density used for MRE based on updated measurement method;
• Detailed topographic data;
• Updated open-pit and underground resource constraints for RPEEE, which include variable COG based on material type.

The MRE is based on the drill hole database, revised lithology from relogging, discrete breccia wire frame domain models and current detailed topographic data. The resource estimation is supported by logging, drilling and sampling with a data cut-off of Oct. 27, 2022. As of the data cut-off, the current drill hole database contained validated assay data from the majority of the phase 1 drilling, except for drill hole FCD-22-001, which had pending results. Geological logging data were available from all nine phase 1 drill holes and most historical drill holes.

SRK has defined the MRE based on variable COG derived from assumed economics for both open-pit and underground mining potential. The estimation was constrained within discrete breccia domains based on geological logging and assay grades. SRK reviewed the breccia interpretations and updated the wire frame boundaries to reflect the results of the 2022 phase 1 drill program. Estimation within the breccias considered only the composites and blocks within each unique domain, and assumed hard boundary conditions at the breccia unit outer contacts to constrain smearing of high grades in the breccias. Estimation outside of the defined breccia units, within the deeper porphyry-style mineralization and halo zones around the near-surface breccias, considered a five-metre soft boundary with the breccia units.

Three domains are recognized within the open-pit resource, referred to as oxide, transitional and sulphide. The underground resources are composed only of sulphide mineralization. The open-pit MRE is reported by domain herein.

Environmental, social and governance, and permitting considerations

The company is committed to developing the Copper Creek project in an environmentally responsible and socially sustainable way through the incorporation of environmental best practices, and transparent and respectful engagement with its local communities, native Americans and other stakeholders, and to contributing to the electrification of a greener economy through the development of United States-sourced copper.

The project is in a historical mining jurisdiction which has experienced mining activities dating from the 1860s to as recently as the early 1980s. The project lies on the western flank of the Galiuro Mountains and is currently reachable through two gravel roads.

Copper Creek is an intermittent waterway through portions of its length and is dry at its lower reach, which is a gravel confluence with the San Pedro River. The Arizona Department of Environmental Quality deems both Copper Creek and the portion of the San Pedro River that Copper Creek connects to as impaired waterways.

Additionally, the project is located outside of an active management area administered by the Arizona Department of Water Resources, and therefore, it is not subject to certain state statutory and administrative regulations for groundwater use.

Since resuming activities at the project, the company has conducted routine environmental baseline monitoring, which includes data gathering through the following activities:

• Installation of stream gauges (flow meters) in major drainages;
• Piezometer installation in selected drill holes to collect subsurface water data;
• Surface water sampling of major drainages;
• Analytical water sampling and water elevation measurements from monitoring wells;
• Installation of a meteorological station, planned for 2023, for collecting site-specific climate data.

All baseline data collected will be incorporated into future hydrogeological and site-specific water balance studies. The company is updating existing biological and cultural surveys, as well as pro-actively assessing and classifying waterways, all of which will serve as the foundation for the regulatory permitting processes.

The project is in proximity to existing mining districts and associated infrastructure, while being outside of residential and urban centres. Since portions of the project are located on public lands managed by the Bureau of Land Management (BLM), it is assumed that development of the project would require approval of a mine plan of operations (MPO) permit. Critical path items related to environmental permitting for the project are expected to be:

• BLM approvals including National Environmental Policy Act (NEPA), Endangered Species Act (ESA) and National Historic Preservation Act (NHPA) compliance;
• Clean Air Act permitting;
• Clean Waters Act Section 404 permit (including NEPA, ESA and NHPA) compliance;
• Aquifer protection permit.

Historical small-scale production at the property resulted in various legacy tailings, waste rock piles, adits and a settling pond system, which are primarily located on BLM lands.

The company is dedicated to working collaboratively with all stakeholders throughout the life cycle of the project.

The company has signed a letter of intent with Proteus Power for the evaluation of a new solar photovoltaic power generation facility and battery energy storage system on recently acquired private ground (see news release dated March 9, 2023), which could facilitate reducing carbon emissions during production and increase renewable, clean energy generation in the state of Arizona.

Post-PEA opportunities

Following the PEA, the company will focus on growth of the MRE, new discoveries and scalability of the asset. The main catalysts include:

• Phase 2 drill program: Results were not included in the MRE that formed the basis of the PEA. Results of phase 2 released to date demonstrate the potential for expansion of the MRE. Refer to news releases dated Jan. 17, Feb. 23 and March 14, 2023.
• Gold program: Certain copper mineralized domains have been shown to contain elevated levels of gold. Approximately 12 per cent of the drill core analyzed for copper was assayed for gold. A program to analyze additional historical samples for gold to obtain adequate data coverage for inclusion in future MRE updates has been initiated.
• Asset scalability: Increased processing rates will be evaluated through continued metallurgical testwork programs targeting coarser grind opportunities, assessments on alternative tailings deposition strategies and increasing mine production capacity.
• Phase 3 drill program: A 20,000-metre drill program is planned to commence in the fourth quarter of 2023. This will focus on testing new targets on the property outside of the resource area and expansion of the MRE with additional stepout and follow-up drilling from phase 2.
• District exploration: District exploration will utilize new information from continuing geological mapping, recently reprocessed and newly acquired geophysical data, and a planned airborne spectral mineralogy survey to provide a pipeline of future exploration targets.

Copper Creek project overview

Copper Creek is a 100-per-cent-owned project located approximately 80 road kilometres northeast of Tucson, Ariz., and approximately 24 km northeast of the town of San Manuel, Ariz. The current resource area is approximately three km in length and open in all directions. The property consists of approximately 65 square kilometres of patented and unpatented mining claims, private land, and state prospecting permits. Additionally, the company controls several grazing leases adjacent to the project. The area is in a mining-friendly and politically stable jurisdiction with extensive infrastructure, including power, rail, roads and access to skilled personnel.

The property is in the prolific southwest porphyry copper region at the projected intersection of a major northwest belt of copper deposits (Ray, Miami/Globe, Superior/Resolution and Johnson Camp) and a major east-northeast belt of copper deposits (San Manuel/Kalamazoo, Silver Bell, Lakeshore, Safford and Morenci). The project hosts a porphyry copper deposit in addition to high-grade, near-surface, breccia mineralization. With over 200,000 m of historical drilling and modest past production, the company believes significant exploration upside remains. There are over 400 known breccia occurrences mapped at surface, of which 35 have been drill tested and 17 are included in the MRE.

Technical report

A PEA, with an effective date of May 3, 2023, in accordance with National Instrument 43-101 (Standards of Disclosure for Mineral Projects), will be filed on SEDAR within 45 days of this news release and will be available at that time on the Faraday website.

For readers to fully understand the information in this news release, they should read the technical report in its entirety when it is available, including all qualifications, assumptions, exclusions and risks. The technical report is intended to be read as a whole, and sections should not be read or relied upon out of context.

Qualified persons

The PEA was compiled by Ausenco with contributions from a team of qualified persons as defined by NI 43-101. The scientific and technical information contained in this news release pertaining to Copper Creek has been reviewed and verified by the following independent qualified persons under NI 43-101:

• Erin Patterson, PEng, of Ausenco: processing, infrastructure, cost estimating and economic analysis;
• Peter Mehrfert, PEng, of Ausenco: metallurgy;
• Scott Elfen, PEng, of Ausenco: tailings and heap leach facility;
• Scott Weston, PGeo, of Ausenco: environmental;
• Berkley Tracy, PGeo, of SRK: mineral resource estimate;
• Bob McCarthy, PEng, of SRK: open-pit mine planning and costing;
• Jarek Jakubek, PEng, of SRK: underground mine planning and costing;
• Rob Pratt, PEng, of CNI: geotechnical.

The qualified persons have verified the information disclosed herein, including the sampling, preparation, security and analytical procedures underlying such information, and are not aware of any significant risks and uncertainties that could be expected to affect the reliability or confidence in the information discussed herein. The disclosure of scientific and technical information in this news release regarding resource and exploration has been reviewed and approved by Thomas Bissig, PGeo, Faraday's vice-president, exploration. Disclosure regarding mine development and infrastructure has been reviewed and approved by Zach Allwright, PEng, Faraday's vice-president, projects and evaluations.

About Faraday Copper Corp.

Faraday is a Canadian exploration company focused on advancing its flagship copper project in Arizona, U.S. The Copper Creek project is one of the largest undeveloped copper projects in North America with open-pit and bulk underground mining potential. The company is well financed to deliver on its key milestones and benefits from a management team and board of directors with senior mining company experience and expertise. Faraday trades on the Toronto Stock Exchange under the symbol FDY.

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