Capstone Mining has revealed the results of the feasibility study for its Santo Domingo iron oxide-copper-gold project in Region III, Chile.
The project, which is 70%-owned by Capstone and 30%-owned by Korea Resources, is anticipated to produce one million tonnes (Mt) of copper, 4.2Mt of iron concentrate and 16,000oz of gold during its 18-year mine life.
However, in the first five years of full production, the mine will have an annual average production of around 110,000t of copper, and about 58,000t a year thereafter.
According to the study, the project is expected to cost $1.7bn and has an after-tax internal rate of return of 17.9% and a capital payback period of 4.2 years.
Capstone CEO and president Darren Pylot said this feasibility study confirms the value of the Santo Domingo project.
"This positive study shows an unlevered internal rate of return of 17.9% (27.3% assuming $1bn of project debt or 60% leverage) at an initial capital cost of $1.7bn, consistent with our previously issued capital guidance," Pylot said.
Copper will be extracted from two open pit mines using conventional drilling, blasting, loading with diesel hydraulic shovels and truck haulage, a copper-iron concentrator, and conventional flotation technology that uses seawater to produce a copper concentrate.
Magnetite iron will be derived from the copper rougher tailings using low-intensity magnetic separation technique.
In addition to the mine and a process facility, the project plan also includes construction of a tailings storage facility, an iron concentrate pipeline, seawater supply pipeline, a magnetite iron concentrate filter plant and stockpile, a copper concentrate storage building, ship loading facilities, and on-site and off-site infrastructure.
Pylot said: "Important objectives for the next stage of the project development include execution of a power purchase agreement, approval of the environmental impact assessment and a continued demonstrated social license for the project."
"We will also assess an optimal financing structure for the project prior to reaching the next decision point in 2015."
Image: First production from Santo Domingo project is expected to begin in 2015. Photo: courtesy of Capstone.