Far West Doubles Santo Domingo’s Size

VANCOUVER — Far West Mining (FWM-T, FWLMF-O) has nearly doubled the size of the Santo Domingo copper-iron project’s resource and announced a breakthrough in iron ore recovery.

Far West now pegs the Santo Domingo Sur, Iris and Iris Norte deposits, 5 km from the town of Diego de Almagro, Chile, at 383 million indicated tonnes grading 0.39% copper, 27% iron and 0.05 gram gold per tonne — a 90% increase in terms of tonnage over a previous estimate used in an April 2008 scoping study.

But of equal importance to the upgraded resource is a metallurgical breakthrough. Following a series of metallurgical tests, Far West has boosted by a factor of more than 2.5 the amount of magnetite it estimates it can recover.

That will have a significant impact on capital costs of a planned revision to its now year-old scoping study, Far West says.

Far West had said it favoured the costlier of two iron ore recovery scenarios outlined in the study. The cheaper scenario, called the magnetite option, would have had capital costs of US$685 million, but only targeted the magnetite portion of iron at Santo Domingo. Iron there is also bound up in non-magnetic hematite.

A pricier option called the hematite option, however, would have also recovered the harder to separate hematite, and though estimated to cost US$941 million, was thought to greatly increase returns.

Based on US$2.10-per-lb. copper and US$50-per-tonne iron, the magnetite option returned a net present value (NPV) of US$229 million. Using the same prices, however, the hematite option gave an NPV of US$560 million.

That has all changed with the new metallurgical work. Now, Far West says it can recover the same amount of iron that it would have under the hematite option by instead targeting only magnetite using low-intensity magnetic separation (LIMS).

“The increased iron recovery by LIMS is attributed to the fact that magnetite and hematite particles are intimately inter-grown, leading to a considerable amount of hematite being recovered through the LIMS process,” Far West reported in a release.

An updated scoping study should be out mid-year.

At presstime, Far West shares traded at $1.80 in a 52-week range of 51¢-$3.58. The company has 53.7 million shares outstanding.