Arizona Sonoran Goes Solo on Cactus Project as Rio Tinto JV Ends

PHOENIX, AZ – December 29, 2025 – Arizona Sonoran Copper Company Inc. (ASCU) is charting a new, independent course for its flagship Cactus Project after the company and Nuton LLC, a Rio Tinto venture, mutually agreed to begin talks to terminate their joint venture option agreement. The news, which marks a significant strategic pivot for the junior miner, sent its stock tumbling 7.5% as investors weighed the promise of full ownership against the formidable challenge of funding the multi-billion-dollar project alone.

ASCU now plans to advance the massive Arizona-based copper project on a standalone basis, a move that signals both the company's confidence in the project's economics and the immense risks that lie ahead.

A Bold Pivot to Standalone Development

The decision to go solo follows the completion of a highly positive standalone Pre-Feasibility Study (PFS) for the Cactus Project in October 2025. The study painted a compelling picture of a world-class copper asset, projecting a post-tax net present value (NPV) of $2.3 billion and a robust internal rate of return (IRR) of 22.8%, based on a copper price of $4.25 per pound.

Located on private land in Arizona’s prolific copper belt, the brownfield project is poised to become a major domestic producer. The PFS outlined a plan for an open-pit mine and a solvent extraction-electrowinning (SX/EW) processing facility expected to produce an average of 103,000 tonnes (226 million pounds) of copper cathode annually over its first decade. If brought to fruition, this would make the Cactus Project the third-largest SX/EW copper operation in the United States.

With the Nuton partnership dissolving, ASCU is accelerating its independent timeline. The company is targeting the completion of a more detailed Definitive Feasibility Study (DFS) for the second half of 2026, with a final investment decision (FID) potentially coming as early as the fourth quarter of the same year. Should the project receive the green light, first copper production is anticipated in the second half of 2029 after an estimated 18 to 24-month construction period.

This decisive path forward suggests ASCU management believes the project's strong standalone economics are sufficient to attract the necessary capital without the strategic backing of a global mining titan.

The High-Stakes Financial Challenge

The termination of the Nuton option agreement fundamentally alters the project's risk and financing profile. The original deal, announced just over a year ago in December 2023, provided ASCU with up to US$33 million in non-dilutive funding. More importantly, it offered the technical validation and potential financial backstop of Rio Tinto, one of the world's largest mining companies. Nuton’s proprietary hydrometallurgical technologies were expected to enhance copper recovery rates and further boost project economics.

Now, ASCU faces the monumental task of securing the project's hefty price tag on its own. The initial capital expenditure (CAPEX) is estimated at a staggering $977 million, with an additional $1.3 billion required in sustaining capital over the life of the mine.

The company has been actively preparing for this possibility. In June 2025, it appointed Hannam & Partners as its debt financial advisor, and discussions with a consortium of tier-1 banks, export credit agencies, and private lenders are reportedly "well underway." ASCU also demonstrated its ability to tap equity markets, successfully closing a C$86.25 million private placement earlier this month, which also saw Hudbay Minerals Inc. participate to maintain its 9.99% ownership stake.

Despite these preparatory steps and a strong liquidity position, the market remains cautious. While ASCU's stock has seen a remarkable 265% return over the past year, the immediate negative reaction to the JV termination highlights investor concerns. The company carries the financial characteristics of many pre-production developers—persistent losses and negative cash flows—which amplify the financing risk now that the safety net of a major partner has been removed.

Rio Tinto's Shifting Global Priorities

The decision to part ways appears to be driven as much by Rio Tinto's evolving global strategy as by any specific issue with the Cactus Project. At its recent Capital Markets Day, the mining giant announced a significant restructuring to streamline its operations into three core businesses: Iron Ore, Copper, and Aluminium & Lithium. This strategy includes aggressive cost-cutting and a plan to potentially divest $5-10 billion in non-core assets to reinvest in its largest, most profitable operations.

Furthermore, Rio Tinto has dramatically increased its internal copper production targets, aiming to produce 1 million tonnes annually by 2030, largely driven by massive projects like Oyu Tolgoi in Mongolia. Within this refocused framework, a minority stake in the Cactus Project may have been deemed less material or a lower strategic priority compared to its wholly-owned, large-scale development assets.

The original agreement also contained a key technical and financial benchmark: for Nuton to exercise its option, an integrated study using its technology needed to demonstrate an NPV at least 1.39 times greater than the standalone case. While the results of that integrated study have not been made public, the strength of ASCU's standalone PFS may have made this high threshold difficult to achieve, providing a logical and amicable exit ramp for both parties.

A New Horizon for Arizona's Copper Belt

Regardless of the reasons for the split, the independent development of the Cactus Project represents a pivotal moment for Arizona's mining industry and the U.S. domestic supply chain. The project is situated on a brownfield site with access to existing infrastructure, including highways, rail, and onsite water, and benefits from a state-led permitting process, which is expected to streamline its path to production.

The successful development of Cactus would provide a significant new source of domestically produced copper, a metal critical for the global energy transition, from electric vehicles to renewable energy infrastructure. The project's advancement, even without a major partner, underscores the quality of the asset and its potential economic contribution to Pinal County and the state of Arizona.

As Arizona Sonoran Copper moves forward alone, the company's ability to navigate the complex worlds of project finance and large-scale construction will be under intense scrutiny. The coming months will be critical as management works to secure the necessary debt financing and de-risk the project on its path toward a final investment decision, turning the promise of its robust feasibility study into a producing American copper mine.