Anaconda Peru sells Magistral

Vancouver — Inca Pacific Resources (IP-V) will buy Anaconda Peru’s 51% interest in the Magistral copper-molybdenum project in Peru for US$2.1 million, boosting its stake to 100%.

The deal has yet to be approved by regulators but is expected to close before March. An economic evaluation envisages a 15,000-tonne-per-day mine with a life of 15 years. The capital cost is pegged at US$131 million, and annual output is projected to be 45,000 tonnes copper, 2,000 tonnes molybdenum, and 500,000 oz. silver.

“Inca Pacific is ready, willing and able to advance the project to the bankable feasibility stage,” says Inca Pacific President Anthony Floyd.

The net present value of the project, based on before-tax evaluation with a 10% discount rate, is $150 million. The NPI assumes prices of US$1 per lb. for copper, US$5 per lb. for molybdenum, and US$5.50 per oz. for silver.

The total mineral resources are estimated at 105 million tonnes averaging 0.74% copper, 0.052% molybdenum and 3.9 grams silver per tonne, using a copper cutoff grade of 0.5%.

Interpretations of geological, geochemical and drill data suggest that the skarn and porphyry-style mineralization forms a coherent body that remains open at depth.

Inca Pacific and Anaconda Peru have together spent more than US$6 million on the property. Work included 24,640 metres of diamond drilling in 76 holes, geotechnical analyses, preliminary metallurgical testing, preliminary mine layout and open-pit design, tailings studies, environmental base line studies, and socio-economic studies. No significant technical obstacles are hindering development.

Late last year, Inca Pacific completed a financing of 25 million units priced at 20 apiece for gross proceeds of $5 million, including the full exercise of an over-allotment option. Proceeds will be used to acquire Anaconda Peru’s 51% stake in Magistral.