Vancouver-based Capstone Mining has extended the mine life of its Pinto Valley Mine in Arizona by eight years to 2026, based on a new pre-feasibility study.
Located about 125km east of Phoenix in Arizona, Pinto Valley is a conventional open cut gold and copper mine, with drilling, blasting, loading and hauling.
The company noted that mine life extension does not include all the process improvements that are underway at present.
The mine will operate to 2026 under the recent study's parameters, which include proven and probable mineral reserves of 232 million tonnes grading at 0.33% copper.
Capstone noted that mineral resources increased by 61% with an economic cut-off grade of 0.18% copper, to 1.56 billion tonnes at 0.3% copper.
Under the latest pre-feasibility study, average annual production for the first five years is 128.4 million pounds of copper concentrate and 6.6 million pounds of copper cathode.
The after-tax net present value, discounted at 8%, is $738m, with expected life-of-mine cash costs estimated at $2 per pound of payable copper.
Total sustaining capital costs have been valued at $187.9m over 12.3 years.
Pinto Valley has been in operation since 1974 with three shutdown periods.
Capstone Mining president and CEO Darren Pylot said that completion of Pinto Valley's (PV2) pre-feasibility study (PFS) extends the mine life and provides the company with the platform to stabilise operations and gain efficiencies.
"The PV2 PFS does not include all the projected impact of the process improvements that are underway at the mine, which we expect to generate cost savings in the years ahead," Pylot said.
Capstone believes that there is enough potential to extend the mine life beyond 2026, if mineral resources not included in the latest study can be proved up to reserves.
The company is also planning to begin engineering and economic studies to consider all remaining mineral resources and their potential for development.
Pinto Valley is wholly-owned by BHP Billiton and was acquired through the acquisition of Magma Copper in 1996.