HPX majority-owned subsidiary Cordoba Minerals Corp. (TSX-V:CDB; OTCQB:CDBMF) reported results from an independent Preliminary Economic Assessment (PEA) for its San Matias Copper-Gold-Silver Project in Colombia. The PEA was prepared by Nordmin Engineering Ltd. of Thunder Bay, Ontario, and includes revisions to the June 2019 San Matias Mineral Resource estimate that was completed by Nordmin (refer to news dated July 3, 2019). All amounts are in United States dollars, unless otherwise stated.
San Matias PEA Highlights:
- Conceptual 8,000 tonnes per day (tpd) conventional open pit mining operation, increasing to 16,000 tpd after the processing plant expansion is completed in Year 6 – underpinned by 119.1 million tonnes of modeled mill feed grading 0.45% copper, 0.26 g/t gold and 2.41 g/t silver, supporting a 23-year life of mine. During the first five years, the PEA includes copper, gold and silver grades averaging 0.67%, 0.30 g/t and 3.74 g/t respectively with a low strip ratio of 0.82:1.
- PEA life of mine (LOM) production of 417,300 tonnes of copper, 724,500 ounces of gold and 5,930,000 ounces of silver contained in a clean copper concentrate and precious metals doré. The copper concentrate is expected to contain very low contents of deleterious elements, such as arsenic and lead.
- Estimated annual copper production of 15,400 tonnes in concentrate in Years 1 to 5; increasing to 20,700 tonnes in Years 6 to 16; and averaging 18,100 tonnes per year over the total 23-year PEA life of mine.
- Average LOM C1 cash costs of $1.32 per pound of copper, net of precious metals by-product credits.
- Initial capital expenditures of $161.4 million, expansion capital expenditures of $120.6 million and total PEA life of mine capital expenditures, including sustaining capital, Tailings Management Facility (TMF) and reclamation costs, of $527.5 million.
- Pre-tax net present value (NPV) of $347.0 million at an 8% discount rate and a pre-tax internal rate of return (IRR) of 26.8%, using metals price assumptions of $3.25 per pound copper, $1,400 per ounce gold and $17.75 per ounce silver. A USD/COP foreign exchange rate of 3,125:1 has been applied. Pre-tax values include Colombian mining royalties of 4% of total precious metals revenue and 5% of total copper revenue.
- After-tax NPV 8% of $210.7 million and an after-tax IRR of 20.3%, representing a 5.3-year payback using the same metals price assumptions.
- Over the PEA life of mine, the San Matias Project is expected to generate $180.7 million in royalty revenue plus $331.2 million in income tax revenue to the government.
- Cordoba has identified additional opportunities to enhance the overall project economics, including delineation of the high-grade gold veins contained within the El Alacrán deposit (Alacran) and optimization of mineral processing and metals recovery. Potential also exists for the discovery of the porphyry sources for the Alacran and Montiel West deposits and for other deposits within the San Matias Project area.
For more details please see Cordoba’s news release.