Name of the Project
Costa Fuego copper project.
Location
Coastal range of the Atacama region, Chile.
Project Owner/s
Costa Fuego comprises the Productora, Cortadera and San Antonio mineral resources, situated within a 10 km radius.
The Productora deposit is 100%-owned by Chilean incorporated company Sociedad Minera El Aguila SpA (SMEA). SMEA is a joint venture company, 80%-owned by Sociedad Minera El Corazón Limitada (a 100% subsidiary of Hot Chili) and 20% owned by CMP Productora (a 100% subsidiary of Compañía Minera del Pacífico).
The Cortadera deposit is controlled by Chilean incorporated company Sociedad Minera La Frontera SpA (Frontera) – a subsidiary company 100%-owned by Sociedad Minera El Corazón Limitada, which, in turn, is a 100% subsidiary of Hot Chili.
The San Antonio deposit is controlled by Frontera and has an option agreement with a private party to earn a 90% interest.
Project Description
The results of the preliminary economic assessment (PEA) on Costa Fuego outline a low-risk, long-life copper project benefiting from low startup capital and a high copper equivalent metal production profile of more than 112 000 t/y over a 16-year mine life, including 95 000 t copper and 49 000 oz gold during primary production (first 14 years).
The PEA proposes a combined openpit truck-and-shovel operation and an underground block cave using centralised processing for a conventional large-scale copper mine producing concentrate and copper cathode.
Potential Job Creation
Not stated.
Net Present Value/Internal Rate of Return
In the base case ($3.85/lb), the project has a pretax net present value, at an 8% discount rate, of $1.54-billion and an internal rate of return of 24%, with a payback from first production of 3.5 years.
Capital Expenditure
$1.05-billion.
Planned Start/End Date
Not stated.
Latest Developments
Hot Chili has signed a memorandum of understanding (MoU) with Puerto Las Losas (PLL) to evaluate bulk tonnage loading alternatives for copper concentrates from the project.
The MoU with PLL enables Hot Chili to negotiate a binding port services agreement, for up to five years, for the project. The agreement would include a take-or-pay volume clause, based on at least 80% of Costa Fuego’s projected future yearly concentrate production.
Under the agreement, Hot Chili and PLL will undertake a port feasibility study, of which Hot Chili will fund 20%, estimated to cost $4.6-million. The study will take about two years to complete.
Upon completion of the port feasibility study, and provided that a shipping solution for loading copper concentrates is agreed to at existing or potential infrastructure at PLL, Hot Chili will have a right of first refusal to ship copper concentrates through PLL's facilities in Huasco Bay for a three-year period.
Key Contracts, Suppliers and Consultants
Wood Australia (PEA).
Contact Details for Project Information
Hot Chilli, tel +61 8 9315 9009 or email admin@hotchili.net.au.