Canadian mining company NGEx has announced that it will conduct a prefeasibility study (PFS) on the Josemaría copper project, in San Juan, Argentina, evaluating the potential to develop an openpit mine and process plant.

The deposit is currently part of the company’s Project Constellation preliminary economic assessment, which evaluated a combined project starting with an openpit mine at Josemaría, followed by underground development of the company's nearby Los Helados deposit.

The Constellation PEA remains one potential development scenario for NGEx’s projects, the company said on Tuesday, but it noted in a statement that the PFS was expected to highlight the full potential of the Josemaría project.  

The PFS will target mining all the Josemaría resource, rather than the 37% contemplated by Project Constellation. 

Josemaría contains an indicated resource of 150-million tonnes at 0.56% copper and 0.38 g/t gold for a copper equivalent grade of 0.76%. It has the potential to produce an average of 185 000 t/y of copper, 345 000 oz/y of gold and 1.2-million ounces a year of silver in the first five years of production.

NGEx CEO Wojtek Wodzicki stated that the PFS economics were expected to benefit from the recently proposed decrease in the Argentine corporate tax rate from the 35% used in the Constellation PEA to 25% starting January 1, 2020.  Further, NGEx's attributable share of the net present value of the PFS project will be 100% compared with 60% of the Constellation PEA project following the company’s buyout of its Japanese partner's interest in Josemaría in 2017. 

“The quality of the existing data means that the PFS can be fast-tracked and we expect to present the results of the study by early 2019. Once the PFS is complete, we intend to move the project forward as quickly as possible towards permitting and development," Wodzicki said.