An update of the feasibility study on the Aljustrel zinc project in Portugal shows increased capital costs, partly offset by higher revenues.
Owner
The rising euro has pushed U.S.-dollar costs higher, particularly for capital expenditures, which are now estimated at US$86 million. The February 2001 revision showed a capital cost of US$69.2 million. Operating costs per tonne have risen to US$19.24 from US$16.69, but with improved metal prices, particularly for silver, the cash cost of production has fallen to US35 per lb. (US$770 per tonne) of payable zinc, from US39 per lb. (US$860 per tonne) in 2001.
The project has a net present value of US$47.5 million at a 7% discount rate, and a 25.9% internal rate of return. The February 2001 valuation was US$44 million at an 8% discount rate, or an internal rate of return of 30.9%.
The feasibility study did not vary any of the mining and milling scenarios for Aljustrel. The update assumed a lower zinc price of US50 per lb. (US$1,100 per tonne), against US51 per lb. in the 2001 study; higher lead and silver prices (US$770 per tonne and US$6 per oz.) increased the byproduct credit, bringing down cash costs.
The updated study also assumed lower smelter charges for zinc and lead concentrates. Zinc smelting charges were forecast at US$162 per tonne, down from US$173.61, and lead smelting charges were forecast at US$90. Recent surveys of smelting and refining charges suggest the zinc forecast is fairly conservative, though lead smelter charges have averaged US$120 per tonne in recent months.
Be the first to comment on "Aljustrel feasibility sees higher costs (April 26, 2004)"