TORONTO (miningweekly.com) – Philippine-focused project developer St Augustine Gold and Copper and its joint venture partner Nationwide Development (Nadecor) on Thursday reported “robust” results of a much-anticipated preliminary feasibility study (PFS) on the King-king copper/gold project in Pantukan, Philippines.
The PFS estimated the pretax net present value at $2-billion and a pretax internal rate of return of 24.8%, when using an 8% discount rate.
The price tag of $2.04-billion included construction of the mine, the mill, an on-off leach pad, power plant, port facility and $240-million in contingency costs.
The ore delivery and processing rate would be 100 000 t/d, split between 40 000 t/d to an on-off heap leach and 60 000 t/d to a flotation mill with agitated tails leach. The mining rate would total about 178 000 t/d for the 22-year mine plan.
Production from the heap leach process is expected to start one year ahead of starting the mill. The proposed openpit mine and processing plant would produce copper/gold/silver concentrate, copper cathode, and gold doré bullion.
The company said King-king’s robust project economics were driven in large part by an initial five-year higher-grade operation, with a low strip ratio and tidewater proximity.
The average yearly production during the first five years of full production is expected to total 270-million pounds of copper, 360 143 oz of gold and 568 958 oz of silver, with an average gold-equivalent total cost of $454/oz.
Over the life of the operation, King-king would produce about 3.16-billion pounds of copper, 5.43-million ounces of gold and 11.65-million ounces of silver.
"The results of this advanced PFS confirm that King-king is an attractive project with robust economics that will bring significant value to our shareholders, our partner and the Philippines. The strong results of the PFS pave the way for St Augustine and Nadecor to continue the development of King-king, including the remaining technical work and the advancement of project financing,” St Augustine CEO Andrew Russell said.
The company, in May 2012, submitted its declaration of mine project feasibility to the Philippine government, and the final feasibility study would incorporate any required amendments from the government’s final review of the document.
King-king has Canadian National Instrument 43-101-compliant proven and probable reserves totalling 617.91-million tons grading 0.3% copper and 0.395 g/t gold.
St Augustine said there were still a number of opportunities to improve the project's economics , and the company was still evaluating electricity-supply options, including discussions with independent power providers about long-term power supply costs.
The Philippine government listed King-king as a top-three-priority project, with its size possibly accounting for the urgency in successfully seeing it through the permitting process.