Capstone Mining Corporation announced the results of the Pre feasibility Study for its Santo Domingo Iron Oxide Copper Gold project in Region III, Chile. The Project is owned 70% by Capstone and 30% by Korea Resources Corporation.
Highlights;
1. Average annual production of 144 million pounds of copper, 4.1 million tonnes of iron concentrate and 15,000 ounces of gold. Copper production will average 255 million pounds in the first 5 years of the Project.
2. Base Case1 after tax net present value discounted at 8%, of USD 1.1 billion. Spot Case2 after tax NPV of USD 4 billion.
3. After tax internal rate of return of 22% with a payback period of 3.0 years.
4. Expected life of mine total cash production costs are estimated to be USD 0.11 per pound of payable copper; USD 0.32 in the first 5 years.
5. Total capital costs estimated to be USD 1.24 billion which includes a 14% contingency on total costs.
6. 18 year mine life with operations expected to commence in late 2015.
7. Nominal plant throughput rate of 63,500 tonnes per day; 70,000 tonnes per day in the first 5 years.
8. Favorably located close to existing infrastructure with direct access to Asian markets.
9. Off take agreements committed for 50% of the copper and 50% of the iron concentrate, life of mine as part of the strategic partnership with KORES for development of the Project.
Mr Darren Pylot president and CEO of Capstone said that "The positive Santo Domingo PFS has met our economic expectations. With the buoyancy in the copper market and strong demand for the by-product iron production we intend to advance this Project towards production. With our USD 507 million cash balance at June 30th 2011 and the commitment by KORES to arrange debt financing for 65% of the capital costs of the Project, we have the means to move forward rapidly."
He said that "With the PFS and funding in hand, we will proceed to award the contract for the Feasibility Study and we have started the permitting process in Chile, as well as Project staffing under the direction of Gregg Bush, Capstone's Senior Vice President and Chief Operating Officer. Gregg has over 30 years of experience in large mine operations and development, with over 12 years of that spent in Chile. We are starting immediately to build the team that will see this exciting new Chilean copper project through to production."
