The government of Panama has granted Tiomin Resources (TIO-T) an extension on the company’s contract for the Cerro Colorado copper deposit.
As a result, Tiomin will be able to postpone its contract commitments for up to five years. These include a $4-million payment to the Panamanian government and an obligation to begin mine construction within 12 months of the payment.
The extension will give Tiomin more time to refine a recently completed feasibility study in order to reduce the project’s capital costs and study the economics of producing additional copper from lower-grade ore. If the price of copper remains above US$1.18 per lb. for a period of 90 consecutive days, the original contract obligations will reactivate. Copper is currently trading at about US$85cents per lb.
Tiomin recently received a feasibility study on Cerro Colorado, prepared by Kvaerner Metals, that calls for a 2-phase development. The first phase, costing US$200 million, would involve constructing a solvent extraction-electrowinning operation able to produce 55-60 million lbs. of copper cathode annually from near-surface, leachable material at a cash cost of US49cents per lb. The second stage would involve conventional milling.
Cerro Colorado is a porphyry deposit containing reserves of 1.4 billion tonnes grading 0.78% copper.
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