Copper Mountain Mining (TSX: CMMC; US-OTC: CPPMF) recently tabled a preliminary economic assessment (PEA) for its New Ingerbelle copper project, just 1 km away from its producing Copper Mountain mine in southern British Columbia. The PEA leverages Copper Mountain’s existing mill and mining equipment to lower startup costs.
The project would cost an initial US$130 million to fund pre-stripping, as well as building a 3 km access road from New Ingerbelle to Copper Mountain. The project would then cost US$63 million in sustaining capital over a 12-year mine life for equipment replacement and expanding the tailings damn.
The project has a US$394 million after-tax net present value at an 8% discount rate and a 65% after-tax internal rate of return. It would produce 85 million lb. copper, 61,000 oz. gold and 195,100 oz. silver each year over the project’s first five years at US$9.66 per tonne milled.
The NPV assumes long-term prices of US$3.08 per lb. copper, US$1,310 per oz. gold and US$18.90 per oz. silver.
However, the company based its resource on an optimized pit shell that values the metals at US$2.75 per lb. copper, US$1,250 per oz. gold and US$16.50 per oz. silver.
According to that pit design, the project contains 105.7 million measured and indicated tonnes grading 0.31% copper, 0.61 gram per tonne silver and 0.19 gram gold for 713.8 millon lb. copper and 655,000 oz. gold.
The project also contains 11.08 million inferred tonnes at 0.27% copper, 0.51 gram silver and 0.17 gram gold for 65.8 million lb. copper and 60,000 oz. gold.
Both use a 0.16% copper cut-off grade.
Shares of Copper Mountain are trading at $1.14 with a 52-week range of 98¢ to $1.85. The company has a $214 million market capitalization.
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