Capstone awards contract for feasibility study to AMEC
Capstone Mining's subsidiary has awarded a contract to AMEC for the preparation of a feasibility study for its Santo Domingo Iron Oxide-Copper-Gold project located in Chile.
The company awarded the mining package contract for the project to NCL Ingeniería y Construcción.
Capstone Mining owns a 70% equity stake in the project, while the Korea Resources Corporation (KORES) holds the remaining 30% interest. Under the scope of the project, AMEC will have to complete basic engineering work in parallel with the feasibility study.
The basic engineering work is expected to provide specifications and bid documents for all major and long lead time equipment before the end of the year.
Work on the feasibility study is expected to start immediately and completion is scheduled for early 2013.
The Santo Domingo Iron Oxide-Copper-Gold project is expected to commence production in late 2015.
KORES must arrange a debt financing package for 65% of the project capital cost as estimated in the feasibility study, on completion of the feasibility study and board approval.
Capstone will bear 70% of the remainder of the capital cost while KORES will provide 30%.
The company must also prepare an environmental impact study, file the permit application and complete in-fill and geotechnical drilling programmes, which are currently underway.
The bidding process for the power contract is also scheduled for 2012 and the contract is expected to be awarded early 2013.