Welcome To The Chariot Resources HUB On AGORACOM
(Edit this message through the "fast facts" section)
Message: Announces Results of Positive Mina Justa Feasibility Study
| April 23, 2009 | |||
|
Chariot Resources Announces Results of Positive Mina Justa Feasibility Study
- Mina Justa pre-tax NPV US$616.2 million |
|||
|
TORONTO, ONTARIO--(Marketwire - April 23, 2009) - Chariot Resources Limited ("Chariot") (TSX:CHD) is pleased to announce the results of the Feasibility Study (FS) for the Mina Justa project, located at the Company's 70% owned Marcona Copper Property in Peru. The FS was prepared by GRD Minproc Limited (GRD Minproc) and a consortium of prominent international consultants. An NI 43-101 compliant Independent Technical Report will be filed on SEDAR within 45 days. Using a price of US$ 2.00/lb for copper and a discount rate of 8%, the pre-tax Net Present Value (NPV) of the Mina Justa project is US$616.2 million on a 100% equity basis, with an internal rate of return (IRR) of 19.9%. The weighted average C1 all-in cash operating cost over the life of the mine is US 88.5 cents per pound of payable copper produced. On an after-tax basis, the NPV at 8% of the Mina Justa project is US$326.3 million, with an IRR of 15.0%. The after-tax NPV of Chariot's 70% share of the NPV of the Mina Justa project, when converted to Canadian dollars at the 20 day average Bank of Canada nominal exchange rate amounts to C$280.7 million. Chariot has estimated that, on above basis, its 70% interest in the Mina Justa project would be valued at Cdn 86 cents per fully diluted Chariot share, based on the aggregate of Chariot's 70% share of the after-tax NPV at 8% (C$280.7 million) and C$12.8 million cash from the assumed exercise of approximately 13.0 million options plus Chariot's estimated cash position at October 1, 2009, the date when permitting and engineering are assumed to commence in the project schedule as set out in the FS. Commenting on the FS, Ulli Rath, President and Chief Executive Officer of Chariot Resources said: "I am pleased that the FS has demonstrated that Mina Justa is a robust project which has the potential to create significant value for shareholders". Mr. Rath went on to say: "The Mina Justa project has now moved from the study stage to the development stage. The Environ-mental and Social Impact Assessment, which has benefited from active local participation, will be submitted to regulatory agencies within three months. The permitting process will operate in parallel to the ESIA review process, so that the final approval of the ESIA should be concurrent with the granting of the key permits which would allow the construction of this important project to commence immediately after ESIA approval". Chariot Resources will hold an investor conference call on Thursday April 23, at 2:00 pm (ET) to discuss the Feasibility Study and respond to questions from investors. To join the call dial: Toll-free: 866-225-0198 Local 416-340-8061 Replay: 416-695-5800 / 800-408-3053 Passcode: 8414348 Highlights Of Feasibility Study (All dollars US$; all tons are metric tonnes) The Mina Justa prospect resource estimate, contained in the FS,effective October 2008 was prepared by Snowden Mining Industry Consultants (Snowdon) using a comprehensive database that includes drilling data from the pre-2005 Rio Tinto exploration program and the 2005, 2006, 2007 and 2008 (up to a cut-off date of 23 May 2008) Marcobre SAC drilling programs. A total of 227,843 metres in 938 holes was drilled on the Mina Justa deposit with a total of 28,607 metres in 137 holes drilled on the Magnetite Manto deposit. The resource estimate was prepared by Warwick Board (P.Geo., P.Geol, MAusIMM, Pr. Sci. Nat.) of Snowden. Dr. Board is an independent Qualified Person (QP) as defined under National Instrument 43-101 for reporting this resource estimate. The table below summarizes the resource. ---------------------------------------------------------------------------
Mina Justa Prospect Mineral Resource (October 2008)
---------------------------------------------------------------------------
Cut-off Total
grade Million Cu Cu_SS Cu_CN Cu_R Contained
(CuT %) Tonnes (%) (%) (%) (%) (million lbs)
---------------------------------------------------------------------------
Indicated
0.2 411.3 0.67 0.26 0.19 0.22 6,070
0.3 336.8 0.76 0.29 0.23 0.25 5,650
0.4 246.9 0.91 0.31 0.29 0.30 4,960
Inferred
0.2 77.5 0.72 0.08 0.12 0.53 1,240
0.3 64.6 0.82 0.08 0.14 0.60 1,170
0.4 50.9 0.94 0.08 0.15 0.72 1,060
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Cut-off Million Ag Au Contained Ag Contained Au
Grade (CuT %) Tonnes (g/t) (ppb) (KOz.) (Oz.)
---------------------------------------------------------------------------
Indicated
0.2 189.3 7.77 51.48 47,290 313,300
0.3 161.8 8.75 55.95 45,530 291,000
0.4 135.4 9.93 61.61 43,230 268,200
Inferred
0.2 68.8 4.50 71.13 9,960 157,400
0.3 58.3 5.03 79.22 9,430 148,500
0.4 48.1 5.63 89.89 8,700 138,900
---------------------------------------------------------------------------
The Mina Justa project mineral reserve is that portion of the "Indicated" mineral resource that is contained within the ultimate pits and has recoverable metal values that allow economic treatment. The mineral reserve estimate contained in the FS was prepared by Ross Oliver, Manager Mining and Geology, GRD Minproc who is a Qualified Person (QP) under National Instrument 43-101 for reporting this reserve estimate. The reserve estimate is set-out below: Mina Justa Mineral Reserve (1), (2), (3), (4)
---------------------------------------------------------------------------
Classification Tonnes CuT CuSS Ag
(Mt) (%) (%) (ppm)
---------------------------------------------------------------------------
Vat Feed 114.6 0.56 0.46 -
---------------------------------------------------------------------------
Concentrator Feed 48.8 1.37 - 14.1
---------------------------------------------------------------------------
Total 163.4 0.80 - -
---------------------------------------------------------------------------
Notes:
(1) Reported according to NI 43-101 reporting guidelines
(2) Mineral Reserve classified as "Probable"
(3) Mineral Reserve cut-off is based on an NSR (Net Smelter Return)
calculation and a copper price of $1.65/lb.
(4) CuSS is acid soluble copper
During the 11.5 year operating life, vat leaching will produce approximately 1.06 billion pounds of copper in cathodes (481,596 tonnes) and the concentrator will produce approximately 1.64 million tonnes of concentrates containing 1.32 billion pounds of payable copper (598,801 tonnes), 16.0 million ounces of payable silver plus a minor amount of payable gold. The vat leaching facility operates for 9.75 years during which the average annual cathode production for a normal year is approximately 110 million pounds of copper per year (50,000 tonnes). The weighted average copper recovery over the 10 years is 74.5% with an average net sulphuric acid consumption of 40.7 kg per tonne of vat leach ore. The facility is designed to treat up to 12 million tonnes of ore per year and produce up to 52,000 tonnes per year of copper cathodes. The flotation concentrator will start up in the second year of operation reaching the design milling rate of 5 million tonnes within a year of start-up. It will operate for just less than 10 years during which it will produce an average of 164,000 tonnes of copper concentrates per year, ranging between 125,000 tonnes and 246,000 tonnes per year of concentrate depending on the ore grade and mineralogy of the material treated. Payable copper production will vary between 100 million to 200 million pounds per year (45,000 tonnes to 90,000 tonnes per year). The weighted average copper recovery over the 10 years will be 93% for copper and 80% for silver. The weighted average concentrate grade will be 37.8% Cu and there is 335 g/t silver in each tonne of concentrate produced. When the two processing facilities are operating together at full capacity, the weighted average annual combined production is 244.5 million pounds of copper per year (111,000 tonnes). Together, the two facilities will treat up to 17.0 million tonnes of ore per year. The initial total capital cost of the infrastructure, open pit mine, and oxide ore processing facilities is $576.0 million, consisting of $454.2 million in Direct Capital, $56.2 million for EPCM, $37.2 million of Owner's Costs, and $28.5 million of preproduction stripping. The major elements of the Direct Capital cost are: vat leaching $73.6 million, solvent extraction & electrowinning $54.0 million; mining equipment $123.2 million; a four stage crushing and screening plant, $77.1 million; power and water $31.5 million; and infrastructure & services $27.5 million. The total capital cost of the concentrator is $167.5 million, consisting of $135.1 million Direct Capital cost to which is added $21.9 million for EPCM, and $10.5 million of Owner's Costs including $2.9 million to bring the sulphide plant to DFS level. The major elements of the direct capital costs are: crushing and grinding $57.2 million; flotation and thickening $28.5 million; and tailings $17.9 million. The total development cost of the two facilities taken together is $743.5 million. Sustaining and deferred capital and closure costs amount to $32.8 million and $15.6 million respectively. The operating cost for the oxide processing facilities will vary between $4.31/t and $5.53/t of ore treated depending upon which port is used to import acid to the site. The acid price used in both costs is $45/t delivered to the port, which together with port charges and trucking to site, accounts for approximately 64% of the operating cost for the oxide ore processing facilities. The operating cost for the concentrator is $4.95/t of ore treated, of which reagents, consumables and power account for approximately 85% of the total. The weighted average mining cost is $1.14/t mined, of which the major elements are: hauling $0.52/t mined; loading $0.15/t mined; and blasting $0.14/t mined. San Martin port is selected for cathode and acid shipments initially, and Matarani, for copper concentrates for one year, switching to the Port of San Juan de Marcona once available. On-site operating cash costs over the life of the project average $0.674/lb of payable copper. Total operating costs (including the mining royalty, transportation, marketing fees, and, in the case of copper concentrates, treatment and refining charges), are anticipated to average $0.963/ lb of payable copper. After silver and gold by-product credits of $0.077 per pound of payable copper, the C1 all-in cash cost is estimated at $0.885 per payable pound. The initial capital and operating costs are stated in Q1 2009 terms at a +/- 10% FS level. The concentrator and related facilities have been designed and costed to a Pre-Feasibility standard, of +/- 20% accuracy level, except the tailings facility, which has been designed and costed to a +/- 10% FS level. Both the initial capital and the concentrator capital contain accuracy provisions which are added to the underlying bare capital costs. Chariot anticipates that there will be reductions in the capital and operating costs prior to project release and for this reason has elected not to add additional contingency provisions to these estimates. The financial evaluation is as at 1 October 2009, assuming 6 months of engineering and permitting activities being carried out before project release on 1 April 2010. Costs from 1 October 2009 are counted as project costs for the purpose of the evaluation. Cathode production would commence on 1 July 2012, and concentrate production on 1 January 2014. The anticipated duration of the Project is 18 years, including 33 months for engineering, permitting and construction, 11.5 years of operations, plus 3.5 years to complete closure and rehabilitation and post-closure monitoring of the site. The project is expected to pay back initial capital approximately 5 years after the commencement of cathode production, which is 3.5 years after the commencement of concentrate production. The economic break-even copper price, defined as that price at which the after-tax NPV at 8% equals zero, is US$1.52 per pound of payable copper. The cash break-even copper price, defined as the price at which life-of-mine revenues would just cover cash operating costs, sustaining and deferred capital, and closure costs, is US$1.04 per pound. Approximately C$30 million has been spent over the past two and a half years on the FS, including the cost of previously unanticipated drilling required to upgrade the classification of the resource. Sunk costs to 31 December 2008 are US$99.6 million, including the cost of acquiring the properties from Rio Tinto and Shougang. Marcobre SAC is projected to incur additional costs through 30 September 2009 of $6.4 million. Total sunk costs at 30 September 2009 would be $106.0 million. The sunk costs at 30 September 2009 are not considered in the economic analysis, other than the Peruvian income tax and IGV tax benefits associated therewith that would otherwise be unused. Key realization costs used in the FS financial analysis include:
Cathode ocean freight, South Korea US$57 per tonne
Cathode ocean freight, Northern Europe US$64 per tonne
Concentrate ocean freight, South Korea US$46 per tonne
Market concentrate terms:
Concentrate treatment charge US$87 per dry tonne
Copper refining charge US$0.087 per payable pound
Copper price participation (from 2015) 10%+/- $1.60 per payable pound
The following table summarizes key sensitivities for the after-tax NPV and
IRR of the Mina Justa Project on a 100% equity basis.
---------------------------------------------------
NPV at 8% IRR
$million
---------------------------------------------------
Copper price
---------------------------------------------------
$1.80 $191.4 12.3%
---------------------------------------------------
$2.00 $326.3 15.0%
---------------------------------------------------
$2.20 $461.1 17.6%
---------------------------------------------------
Capital costs
---------------------------------------------------
+10% $279.3 13.7%
---------------------------------------------------
Base $326.3 15.0%
---------------------------------------------------
-10% $373.4 16.6%
---------------------------------------------------
Operating costs
---------------------------------------------------
+10% $283.6 14.2%
---------------------------------------------------
Base $326.3 15.0%
---------------------------------------------------
-10% $369.0 15.9%
---------------------------------------------------
|
Loading...
Loading...
New Message
Please
login
to post a reply