Atalaya Mining is set to proceed with the 15Mtpa expansion plan at Proyecto Riotinto in south-western Spain.
Through the expansion plan, Atalaya intends to upgrade processing facilities in a bid to enhance copper production to around 50,000t-55,000t per annum.
The plan will be undertaken at an estimated cost of €80.4m. It is intended to improve operational efficiencies, reduced maintenance requirements and operating cash costs.
Atalaya Mining CEO Alberto Lavandeira said: “Our decision to proceed to upgrade and expand Proyecto Riotinto to processing capacity of 15Mtpa is based on the strong project economics that demonstrate that significant incremental value can be generated for our shareholders.
“The project will benefit from the excellent technical experience of our teams, which are committed to driving low capital intensity while increasing metal production and mine competitiveness to benefit our shareholders, employees and the local economy.”
When compared with the existing 9.5Mtpa operation, the expansion plan is expected to bring down cash costs and all-in sustaining costs by around 7%.
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The project presents the company the opportunity to achieve an incremental post-tax net present value (NPV) of around $113m and a post-tax internal rate of return (IRR) of about 43%.
Under the expansion plan, the company will undertake modernisation of the process plant with the installation of a new primary crushing system and a new SAG mill.
In addition, the exercise will also include additional flotation cells and concentrate handling installations.
In order to raise equity funding of around £39m for the expansion plan, the company is planning to issue up to 23,335,910 new ordinary shares.
Once financing arrangements and permitting activities are complete, Atalaya expects to start ground construction works during the first quarter of next year.
Commissioning of the project is slated for the second half of 2019, while nominal production is anticipated during the first half of 2020.