27th Jul 2015 07:25
LONDON (Alliance News) - Metminco Ltd Monday said it will produce over 765,000 tonnes of copper and generate USD2.78 billion in earnings over 17 years from the Los Calatos project in Southern Peru.
Metminco has recently received an updated mineral resource estimate for the project and has now received the results from an independent mining study to "determine the optimum development approach" for the project.
Th miner said the project will produce 765,160 tonnes of copper over 17 years, generating a total of USD2.78 billion in earnings before interest, tax, depreciation and amortisation. Los Calatos has a net present value of USD285 million with a payback period of 5.3 years.
Metminco will produce on average 45,000 tonnes of copper in concentrate per year, although at its optimum level the production rate will reach up to 56,800 tonnes per year. The company is expecting the operating costs after by-products to be around USD1.20 per pound, based on a price of USD3.00 per pound of copper.
The project will take 18 to 24 months to construct, and capital expenditure before production will total around USD650 million, which includes contingencies of USS111 million.
"We are pleased with the outcome of the Mining Study. Although the study is at a high level, it has provided the company with a further development option that potentially yields very good financial returns and paves the way for Metminco to become a mid-tier copper producer," said Managing Director William Howe.
"The company will now focus on advancing the project towards development, subject to funding. Attracting a partner for Los Calatos remains a priority, and we are well positioned to further engage with a number of parties currently undertaking detailed due diligence," he added.
Metminco shares were up 4.5% to 0.209 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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