Dual-listed gold miner Yamana Gold on Friday announced positive results of the prefeasibility study (PFS) for its Agua Rica copper/gold project, including an “impressive and increased” net present value (NPV) of $1.9-billion and an increased after-tax internal rate of return (IRR) of 19.7%.
The positive PFS results follow the March announcement of an agreement to develop Agua Rica using infrastructure and facilities of a joint venture (JV) that Yamana has with Glencore and Newmont Goldcorp in Argentina.
The project will be integrated with the Alumbrera mine that the three companies jointly own, thereby enhancing project economics, while reducing project complexity and its environmental footprint.
The PFS was advanced under the oversight of a technical committee comprised of their respective representatives.
Based on mineral reserves updated as at June 30, the PFS estimates a mine life of 28 years with average yearly production over the first ten years of about 533-million pounds of copper-equivalent, including 107 000 oz of gold and contributions of molybdenum and silver.
Costs are expected to fall well within the lower half of the cost curve, with average cash costs over the first ten years estimated at $1.29/lb and competitive all-in sustaining costs of $1.52/lb for the same period.
The initial capital cost estimate of $2.4-billion realises significant synergies from using the infrastructure and facilities of Alumbrera.
The project is expected to generate strong economic returns with an after-tax NPV, at an 8% discount rate, of $1.935-billion, and an after-tax IRR of 19.7%, assuming a copper price of $3.00/lb.
Opportunities to further improve the economics will be evaluated in a value-seeking study scheduled for 2019 and the full feasibility study expected by 2020. Increasing the throughput rate from 110 000 t/d to 115 000 t/d would improve the NPV by more than $145-million and would require only a marginal increase to initial capital.
Agua Rica’s proven and probable copper mineral reserves increased from year-end 2018 by 21% to 11.8-billion pounds and gold mineral reserves increased by 12% to 7.4-million ounces.