TORONTO (miningweekly.com) – The much-delayed and over budget Boleo copper/cobalt/zinc/manganese project, in Mexico, produced its first copper this month, with prior problems relating to the acid plant having been resolved, TSX-V-listed Baja Mining said in a statement.
Joint venture firm and majority owner Boleo Minera y Metalurgica del Boleo (MMB) also advised Baja that commissioning of the cobalt-zinc circuit had started following mechanical completion. MMB was currently targeting the completion of copper production ramp-up and normalised production by July. The completion of commissioning and start-up of the cobalt-zinc circuits was expected by March and completion of production ramp-up by October.
MMB is led by a group of Korean companies headed by Korean Resources Corporation (KORES) with 90% ownership, with Baja retaining a 10% stake.
In addition, MMB had issued an A$100-million corporate bond with a fixed annual interest rate of 4.125% and repayment due on December 3, 2019, fully backed by a KORES guarantee, and entered into five-year Australian/US dollar cross currency swaps for proceeds of about $84-million, with a fixed annual interest rate of
2.67%. The swap proceeds were intended to fund MMB through the start-up phase of operations to the time when positive operating cash flow could be achieved, based on MMB’s current financing plan.
The $2-billion Boleo project entailed the biggest-ever investment by a company in the Baja California Sur state and comprised one of the largest copper deposits in North America.
Since receiving financing in 2010 to start construction of the process plant, the Boleo project had several times teetered on the brink of failure since 2012, when Baja reported a budget blowout of between $200-million and $400-million more than the $1.14-billion estimated in 2010.
Baja founder John Greenslade then resigned as president and CEO, after which investors sued the company, only to be rescued by the consortium of Korean lenders.
In September last year, MMB suffered a tragic blow when two Korean directors died during the hurricane Odile.
Over the mine’s 22-year life, MMB expected to produce 51 000 t/y of copper cathodes of 99.99% purity, 1 700 t/y of metallic cobalt and 25 000 t/y of zinc sulphate.