Selkirk Copper Mines: Did Minto’s Grade Tradeoff Preserve Value?

Selkirk Copper Mines’ 2026 Mineral Resource Estimate (MRE) for the Minto copper-gold-silver project delivered 940 million pounds of measured and indicated copper across 47.8 million tonnes, nearly tripling contained metal from the prior estimate. The average copper grade fell 26%, from 1.20% to 0.89%. That tension, more copper at a lower grade, is the defining feature of the updated resource, released with an effective date of 10 June 2026 and prepared by Moose Mountain Technical Services. The deposit has been reframed from a compact underground operation into a blended underground and open-pit project spanning 69 modelled domains across a 3-by-3-kilometre mineralised footprint.

This analysis examines the two distinct mechanisms that drove tonnage growth, how the deposit’s grade bifurcation works across its underground and open-pit components, what the gap between the MRE’s US$4.60/lb copper assumption and a spot price of US$6.28/lb means for the economics, and which specific variables investors should track before the forthcoming Preliminary Economic Assessment (PEA) resolves the open questions.

From underground niche to blended project: what the 2026 MRE actually changed

The scale of the shift is worth stating plainly. Measured and indicated tonnage rose 280% to 47.8 Mt. Contained copper climbed from an implied 333 million pounds to 940 million pounds. Gold credits of 0.34 g/t (totalling 530,000 ounces) and silver credits of 3.2 g/t (4.97 million ounces) added further value to the M&I envelope.

The estimate draws on 428,388 metres of drilling across 1,956 holes, including 52,288 metres in 175 Phase 1 holes. Measured material totals only 348,000 tonnes, all underground, meaning geological confidence at the highest classification tier remains concentrated in a small fraction of the total resource. The bulk, 47.5 Mt, sits in the indicated category.

Inferred resource

The inferred category declined from roughly 23.6 Mt to 16.9 Mt at 0.76% Cu, 0.26 g/t Au, and 2.7 g/t Ag, containing 281 million pounds of copper. That reduction reflects substantial upgrading of previously inferred material into indicated and measured classifications, not a loss of ground.

The grade question decoded: two deposits blended through one mill

The 0.89% average copper grade is a blend of two materially different ore populations, and treating it as a single number obscures the deposit’s architecture.

Mining grade is not a single number but a cut-off decision that shifts depending on commodity prices, mining method, and processing costs; the same block of rock can move from sub-economic to economic material without a drill bit touching the ground.

The underground component accounts for 26.0 Mt of M&I material at 1.14% Cu, 0.49 g/t Au, and 4.4 g/t Ag. This is the economic spine of the project, a copper-gold grade profile that is globally competitive for a modern underground operation. An additional 9.8 Mt of inferred underground material sits at 0.91% Cu.

The open-pit component adds 21.8 Mt of indicated-only material at 0.59% Cu, 0.17 g/t Au, and 1.8 g/t Ag, with a further 7.1 Mt inferred at 0.55% Cu. No measured classification exists in the open-pit portion, reflecting lower geological confidence relative to the underground core.

Underground grade benchmark: 1.14% Cu with 0.49 g/t Au, representing the project’s highest-value ore and a grade ratio of approximately 1.93:1 relative to the open-pit material.

The grade dilution at the blended level was purchased with scale, confidence upgrades, and operational flexibility to flex feed sources depending on copper prices. That is a deliberate architectural choice, not a flaw.

For investors wanting to understand why copper deposits so frequently display the kind of grade stratification between shallow bulk-tonnage and deeper high-grade cores that defines Minto’s architecture, our full explainer on porphyry copper deposit geology covers the mineralisation models, grade zoning patterns, and formation processes that shape how these systems are typically sequenced through mine planning.

What actually drove the tonnage growth: drilling results versus price assumption changes

Two roughly equal mechanisms produced the 280% tonnage increase. Disentangling them matters because each carries different implications for durability.

New drilling expanded known mineralised zones. Phase 1 drilling contributed 52,288 metres in 175 holes, and results were strongest across four areas:

• Minto North (202 Lens): Indicated contained copper grew 238% at an average grade of 1.39% Cu, 0.75 g/t Au, and 6.57 g/t Ag, the highest grades among newly expanded zones
• Ridgetop: Indicated contained copper expanded 255%, with stacked near-surface lenses consistent with open-pit geometry
• Minto Main (117 Lens): Established measured and indicated classifications in ground where only sparse legacy drill data previously existed
• Area 118 (301 Lens): Extended mineralisation at depth beneath existing underground workings

Revised price assumptions and design changes lowered effective cut-offs. The 2026 MRE applies a materially different price deck from the prior estimate, and the removal of previously applicable precious-metal streaming constraints altered per-tonne block value calculations.

Higher assumed prices allow more marginal blocks to satisfy the “reasonable prospects of eventual economic extraction” threshold required under NI 43-101. Some portion of the grade dilution is a direct function of these parameter changes bringing lower-grade open-pit blocks above the cut-off, not newly drilled lower-grade ground.

Tonnage that exists because of physical drilling is more durable than tonnage that exists because of price assumptions. Investors evaluating sensitivity to a lower copper price environment should weigh this distinction carefully.

Understanding mineral resource classifications and why they matter for Minto

The NI 43-101 standard, which governs how Canadian-listed companies report mineral resources, establishes three categories based on geological confidence:

The NI 43-101 mineral resource classification standards establish the precise definitions and confidence thresholds that separate measured, indicated, and inferred categories, with the Canadian Securities Administrators requiring that all public disclosure of scientific and technical information about mineral projects in Canada conform to CIM-specified terminology.

1. Measured: The highest confidence tier, based on closely spaced drilling that allows the size, shape, and grade of the deposit to be estimated with a high degree of certainty
2. Indicated: A reasonable level of geological confidence, established through drilling at wider spacing where continuity can be reasonably assumed but not confirmed to the same standard as measured
3. Inferred: Sufficient evidence to estimate tonnage and grade, but considered too geologically speculative for economic considerations to be applied in mine planning

At Minto, measured material totals just 348,000 tonnes at 0.92% Cu, 0.39 g/t Au, and 3.3 g/t Ag, all from the underground component. The indicated category carries the overwhelming bulk at 47.5 Mt. The inferred resource of 16.9 Mt at 0.76% Cu and 281 million pounds of contained copper represents upgrade potential that could shape long-term mine life, but it does not yet contribute to economic planning.

Resources that are not reserves have no demonstrated economic viability. Economic viability is not established until a feasibility study or PEA applies a mine plan, recovery assumptions, and capital costs to the resource.

The fact that Minto’s entire open-pit component carries indicated-only classification, with no measured material, is a meaningful risk qualifier for capital allocation decisions made ahead of the PEA.

Spot prices at US$6.28/lb versus a US$4.60/lb assumption: what the gap means for the economics

The MRE’s copper assumption of US$4.60/lb sat roughly 37% below spot copper of US$6.28/lb as of 10 July 2026. Gold and silver showed similar premiums: spot gold at US$4,114/oz versus an assumption of US$3,300/oz, and spot silver at US$60.17/oz against US$40/oz.

The structural copper supply deficit running through the late 2020s is a key reason why a blended underground and open-pit operation of Minto’s scale carries strategic relevance beyond its grade profile; projects adding hundreds of millions of pounds to global supply pipelines carry option value that is difficult to price without modelling the demand side.

The spot-to-assumption gap on copper alone exceeds 37%, meaning the resource is materially more robust at current prices than its cut-off grades imply.

The cost structure splits sharply by mining method. Underground mining carries a cost of C$95.64/tonne mined, applied to 1.14% Cu material with meaningful gold and silver credits. Open-pit mining runs at just C$4.58/tonne mined, but targets 0.59% Cu material with modest by-products. Shared costs include processing at C$30/tonne milled, G&A at C$20/tonne milled, offsite costs of US$200/dry metric tonne, and treatment charges of US$35/dry metric tonne. A 1.5% NSR royalty is payable to the Selkirk First Nation.

Open-pit blocks near the cut-off at US$4.60/lb become materially more attractive at spot prices, increasing the economic headroom of the lower-grade component. Management has indicated flexibility to shift toward higher-grade underground production if metal prices weaken materially.

The project is now more leveraged to copper price movements than under the 2025 resource, because a larger share of tonnage sits in lower-grade open-pit material that is sensitive to both cost and price assumptions.

Five variables that will determine whether the grade tradeoff was worth it

The analytical tension at the heart of this resource update, whether the tonnage increase preserved or enhanced economic value per tonne, cannot be resolved by the MRE alone. Five specific variables will determine the answer.

1. The PEA as pivotal catalyst. Until Selkirk publishes a PEA tying the resource to a mine plan, recovery assumptions, and capital costs, the grade-versus-tonnage tradeoff remains an informed hypothesis. The economic model, not the resource estimate, is what demonstrates whether the blended operation creates value.

The PEA as a valuation catalyst is well-illustrated by cases where projects with strong resource estimates have traded at steep discounts to their eventual NPV until economic studies resolved the capital cost and recovery assumptions that the resource alone cannot provide.

1. Open-pit confidence and reserve conversion. All 21.8 Mt of open-pit material is indicated-only, with zero measured classification. Conversion to probable reserves requires additional drilling and a binding mine plan. Investors should monitor whether infill drilling programmes are announced for the open-pit zones.
2. Underground grade performance. The underground inventory at 1.14% Cu is the economic benchmark. Phase 2 drilling intercepts will reveal whether grades hold, improve, or soften as the underground resource is extended at depth and along strike. Any material grade decline would compress blended margins.
3. Inferred resource upgrade pathway. The 16.9 Mt inferred resource at 0.76% Cu, containing 281 million pounds of copper, carries conversion potential that could extend mine life significantly. The grade and tonnage at which this material converts will shape the project’s long-term economics.
4. Commodity price and cost inflation sensitivity. The project is now more leveraged to copper prices than the smaller, higher-grade 2025 resource. A sustained price decline would disproportionately affect the viability of open-pit tonnes, while cost inflation in processing and G&A would compress margins across both mining methods.

Selkirk Copper Mines trades on the TSXV under the ticker SCMI, on the OTCQX as SKRKF, and on the FRA as IO20.

Scale without certainty: Minto’s resource growth in perspective

The 2026 MRE definitively established a resource of material scale: 940 million pounds of contained copper in the M&I category, 530,000 ounces of gold, and 4.97 million ounces of silver, anchored by an underground grade of 1.14% Cu that is competitive at a global level. The open-pit component adds optionality at current copper prices, where a spot price of US$6.28/lb sits 37% above the MRE’s US$4.60/lb assumption.

What remains unresolved is whether the economics confirm the thesis. No PEA has been published. No mine plan ties the resource to capital costs and recoveries. The open-pit component carries indicated-only classification with no proven or probable reserves.

Contained copper (M&I): 940 million pounds, supported by 530 koz gold and 4.97 Moz silver, across a blended underground and open-pit resource of 47.8 Mt.

Minto has shifted from a compact underground project to a blended operation with more tonnes, more price leverage, more optionality, and more dependency on the forthcoming economic studies to confirm value. The grade tradeoff may prove to be precisely the right architectural decision for a project entering a sustained period of elevated copper prices, or it may prove to have diluted the economics of what was already a strong underground deposit. The PEA will separate the two outcomes.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions.

Resources that are not reserves have no demonstrated economic viability. Financial projections and forward-looking statements are subject to market conditions and various risk factors.