Magistral moving towards feasibility

Vancouver – A new technical report for Inca Pacific’s (IP-V) Magistral copper and molybdenum project situated in Ancash, Peru, estimates the economics for the project. The Magistral project is situated approximately 450 km northwest of Lima, and 100 km northeast of the seaport of Chimbote. Inca Pacific is working towards developing Magistral, as an open pit mine. Drilling, the first step in the independent bankable feasibility study is now underway on the project.

At an estimated cost of US$131 million, the project would have a life of 14.3 years at a rate of 15,000 tonnes per day. During the first five years of the project, the mine would produce 45,000 tonnes copper, 2,000 tonnes molybdenum and 500,000 ounces silver per year.

The net present value of the project was estimated at US$76.35 million and production costs for the first five years would be around 57 per pound of copper including credits for silver and molybdenum. Metal prices used for the preliminary assessment were copper at US$1.00 per lb., molybdenum at US$3.50 per lb., and silver at US$5.50 per oz. Recoveries of 92% for copper, 60% for molybdenum and 66% for silver were assumed.

A sensitivity analysis shows that as the price for copper and molybdenum increase to say US$1.05 per lb. for copper and US$4.50 per lb. for molybdenum, the NPV would increase to US$124.9 million.

The Magistral property contains a resource of 64 million tonnes grading 0.78% copper 0.054% molybdenum and 4.15 grams silver per tonne in the measured and indicated categories. Another 42 million tonnes at 0.68% copper, 0.05% molybdenum and 3.6 grams silver are in the inferred category. This is at a cutoff of 0.5% copper. These resources are in compliance with NI43-101.

The preliminary assessment considers a mine plan for a 15,000 tonne per day operation. The open pit will have walls sloping at 53. The strip ratio over the life of the mine is estimated at 1.8:1.

Resources in the planned open pit at a cut-off grade of 0.35% copper, total 52.8 million tonnes grading 0.68% copper and 0.059% molybdenum and 3.82 grams silver. There are another 25.8 million tonnes at 0.65% copper and 0.059% molybdenum and 3.67 grams silver in the inferred category.