Canadian junior to fast-track San Juan copper/gold project
The Josemaria copper/gold project in the Andes mountains of San Juan, Argentina, will be on an accelerated development schedule, as Canadian junior NGEx Resources moves to elevate the project to construction-ready level amid a global scarcity of such projects.
With the long-term copper fundamentals strong and the global project pipeline at multi-decade lows, NGEx believes that construction-ready projects will attract premium valuations, CEO Wojtek Wodzicki said on Tuesday, announcing the outcomes of a prefeasibility study for Josemaria.
The study, prepared by SRK Consulting (Canada) with input from others, delivered robust economics and confirmed the potential of Josemaria, calculating an after-tax net present value, using an 8% discount rate, of $2-billion and an internal rate of return of 18.6%, at $3/lb copper.
Over a 20-year life, the mine will produce more than 5.4-billion pounds of copper and 4.6-million ounces of gold, with output averaging about 125 000 t/y of copper, 230 000 oz/y of gold and 790 000 oz/y of silver, at a C1 cash cost of $1.26/lb copper-equivalent.
In the first three years of full production, the mine will deliver 170 000 t/y of copper, 350 000 oz/y of gold and one-million ounces a year of silver.
The strong front-end production and cash flow will drive a 3.4-year payback period and will support a variety of financing alternatives for the project, which is estimated to require $2.75-billion in initial capital expenditure.
Wodzicki said that NGEx would fast-track Josemaria towards production by starting work on a feasibility study, securing water rights and advancing the environmental permitting plans.
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