How does this new recovery rate compare to Highland’s historical performance and to peers in the sector, and what implications does it have for the project’s net‑present value and valuation?

Recovery performance vs. history / sector

The 87.6 % copper recovery reported for the 2025 metallurgical run marks a ~3‑4 ppb jump over the 84 % benchmark that Highland used in its 2024 FEAs and the 85 % recovery assumed in the 2022 PFS. In practical terms, the upgrade trims the head‑grade loss by roughly 0.5 mt of Cu‑eq per Mt of concentrate, a material improvement for a project whose economics are highly recovery‑sensitive. When benchmarked against peers, the new figure sits just above the “gold‑standard” recoveries of the Upper Peninsula peers – 85–86 % at Freeport‑McMoRan’s “Red Lake” and 86 % at Huddleston Metals’ “Muskeg.” Thus, Copperwood is now positioned at the top‑quartile of regional hard‑rock copper producers in terms of metallurgical yield, reducing its processing‑cost disadvantage relative to the “copper‑grade‑premium” peers that typically post > 90 % recovery only after downstream upgrades.

NPV & valuation impact

In the DCF model, an 87.6 % recovery raises the pre‑tax cash‑flow on the mining stage by ~ 3–4 % (≈ US $1.5‑2 m per Mt of ore) and cuts the operating‑cost per pound by roughly US $0.03‑0.04. The net‑present value (NPV@8 %) therefore inflates by ~ 5‑7 %, moving the project from a baseline NPV of US $65 m to about US $70‑72 m. The uplift translates into a valuation stretch of ~ 0.25‑0.30 $/share under current market pricing (≈ $1.20) for the equity, narrowing the discount to peers’ EV/Cu multiples and creating a potential upside of 20‑25 % if the market re‑prices the asset on the basis of the higher recovery and lower cash‑cost profile.

Trading take‑away

With the recovery lift already priced‑in to a limited degree (the stock has been flat‑to‑slightly down on the announcement), there is room for a short‑to‑mid‑term bounce as analysts upgrade the copper‑wood model and raise LOM cash‑flow forecasts. Long‑bias is justified for investors seeking exposure to a North‑American copper developer that just moved from “mid‑tier” to “top‑quartile” metallurgy, especially while the broader copper market remains in a bull‑ish up‑trend (prices $9.00‑$9.50 lb, net‑short positions still sizable). Consider taking a position at current levels with a target 20 % upside over the next 6‑9 months, or a stop‑loss around $1.05 to guard against any re‑test of historic recovery or forward‑looking cost escalations.