Vancouver — Drilling is progressing at
Situated 450 northwest of Peru, the project is at the preliminary assessment stage and envisaged as an open-pit mine.
At an estimated cost of US$131 million, the mine would operate for more than 14 years. Annual production in the first five years is projected at 45,000 tonnes copper, 2,000 tonnes molybdenum, and 500,000 oz. silver.
The net present value of the project is pegged at US$76.35 million, whereas production costs in the first five years would be around 57 per lb. copper.
The preliminary assessment was based on prices of US$1 per lb. copper, US$3.50 per lb. moly, and US$5.50 per oz. silver, and recoveries are projected at 92%, 60% and 66%, respectively.
If the prices of copper and molybdenum were to increase to US$1.05 and US$4.50 per lb., respectivey, the NPV would rise to US$124.9 million.
Magistral has a measured and indicated resource of 64 million tonnes grading 0.78% copper and 0.054% moly, plus 4.15 grams silver per tonne. The inferred resource stands at 42 million tonnes grading 0.68% copper, 0.05% moly and 3.6 grams silver. The estimates are based on a cutoff grade of 0.5% copper.
Plans call for the mining of 15,000 tonnes per day. The pit walls would slope at 53, and the life-of-mine stripping ratio is pegged at 1.8-to-1.
The ongoing drilling is part of an independent feasibility study, which will include field work and a scoping study as well. The study is due in March 2006.
Last spring, Anaconda Peru elected not to exercise its right to increase its stake in the project to 65% from 51%, which it could have done by completing a bankable feasibility. In February 2004, Inca Pacific bought Anaconda’s 51% interest for US$2.1 million.
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