Pre-feasibility work for London-base Monterrico Metals (MNA-L) at the Rio Blanco copper project in northern Peru has concluded the most economical mining scenario will be an open pit mine with a mill producing a concentrate.
The study, by consulting firm GRD Minproc, indicated a net present value for the project of US$320 million, based on a discount rate of 10%. The internal rate of return was 33%.
The open pit was designed around a reserve of 346 million tonnes grading 0.78% copper, and has a life-of-mine stripping ratio of 0.7. It would produce 70,000 tonnes copper in concentrate annually from 10 million tonnes of ore over a 32-year life.
The Rio Blanco mineralization is a copper-molybdenum deposit, but by-product credits for molybdenum were not worked into the study. Monterrico says it expects to have a molybdenum resource as part of the final feasibility study.
Metallurgical tests on Rio Blanco material indicate 90-95% recovery in a conventional flotation process, which produces a 30-38% copper concentrate.
Operating costs are estimated at US55 per lb. (US$1,220 per tonne) over the life of the mine, with early production from higher-grade zones bringing costs down and copper production up in the first five years of operation. Grades in the first five years average 1.13% copper, and annual production averages 103,000 tonnes.
Capital costs of US$191 million would be paid back in about three years.
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