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PERTH (miningweekly.com) – ASX-listed Avanco Resources has started underground development activities at its second Brazilian copper/gold mine, after a scoping study demonstrated the project’s feasibility.
The scoping study into a large underground mine at the Pedra Branca East project, estimates that a 1.2-million-tonne-a-year operation could produce 24 000 t/y of copper and 17 000 oz/y of gold at a C1 cost of $1.14/lb.
The project is expected to have a net present value of $213-million and an internal rate of return of 44%, while life-of-mine cash flow will be $408-million.
Preproduction capital has been tipped at $150-million, Avanco revealed on Monday.
A prefeasibility study for the Pedra Branca East project, which considers the initial extraction of ore and haulage to the existing Antas mine, is also close to completion.
Avanco MD Tony Polglase told shareholders that a development decision at Pedra Branca East is an important milestone for the future growth of the company, adding that in the short term, the initial development at the mine could potentially increase Avanco’s yearly production.
Underground access and other mine infrastructure will be constructed during the development stage at Pedra Branca East, to support the later large-scale mining as delineated by the scoping study.
Polglase says that the board approval to start initial underground development at Pedra Branca East is cognisant of the encouraging results of the scoping studies, the recent success at the Antas mine, the high-grade and homogenous nature of the Pedra Branca East mineralisation, the need to start development before the onset of the wet season, and the current strong balance sheet.
It is hoped that the initial underground development will reduce the implementation time of a large-scale mine at Pedra Branca East, maintain optionality, and better position Avanco to capitalise on any future improvement in the copper price.