All amounts and quantities presented in this report are stated in
Copper Flat is a former producing mine located in
HIGHLIGHTS
- Recent updates of Project capital and operating costs produced the following financial return estimates:
NPV@0% ( | NPV@8% ( | IRR (%) | Payback (Years) | |||
Base Case | 21.1 | 3.3 | ||||
Upside Price Case | 25.9 | 2.8 |
Base Case: Copper
Upside Sensitivity: Copper
- At the federal level, the
US Bureau of Land Management completed a seven-year environmental review of the proposed mine and has issued environmental clearance to proceed with the Company proposed operation. Additionally, theUS Army Corps of Engineers has authorized the Copper Flat Mine to operate under the Nationwide Permit 44 for mining activities. - Multiple state permits have been received. Approval by the New Mexico Mines and
Minerals Division of the Energy , Minerals, andNatural Resources Department of a Company financial guarantee for reclamation and closure of the site after mining is required to obtain the Mining Permit; when that step is accomplished, the Copper Flat Mine will be a fully permitted facility. - The Company has filed an appeal of the
State of New Mexico Third District Court ruling that invalidated a large percentage of 7,500 acre-feet of inchoate water rights. That appeal has been assigned to theNew Mexico Court of Appeals and awaits a court date to hear oral arguments. Meanwhile, a 2019 lease agreement has secured more than half of the water supply required to operate the project.
“We are pleased that Copper Flat remains a viable project. Since the last economic study, the team has made excellent progress on obtaining the necessary permits to operate the mine. Now that the updated feasibility is complete, we will be focusing on funding to enable us to develop the mine,” said
FINANCIAL SUMMARY
The economic update includes financial analysis on two metal price scenarios: 1) The base case using a long-term copper price of
The financial return table below is after tax, unlevered and with no escalation in commodity prices.
FINANCIAL RETURNS
NPV@0% ( | NPV@8% ( | IRR (%) | Payback (Years) | |||
Base Case | 21.1 | 3.3 | ||||
Upside Price Case | 25.9 | 2.8 |
Base Case: Copper
Upside Sensitivity: Copper
CAPITAL COSTS
The total initial capital cost for construction, mine pre-development, commissioning and owner’s cost is estimated to be
The project is a brownfield redevelopment project in a stable region with excellent access to existing infrastructure. The project will realize savings through the reuse of significant infrastructure that remains from the original
INITIAL AND SUSTAINING CAPITAL
Amount ( | ||
Mine | ||
Plant | ||
Owner Cost | ||
Total |
Sustaining Capital | Amount ( | |
Mine | ||
Plant | ||
G&A | ||
Total |
OPERATING COSTS
Average cash operating costs, net of by-product revenue, and using the base case pricing scenario, are estimated at
On a cost per ton basis, cash operating costs are estimated at
LIFE-OF-MINE CASH OPERATING COST
Operating Cost | $/Ton of Ore | $/lb of Cu | ||
Process Cost | ||||
General Administration Cost | ||||
Treatment & Refining Charges | ||||
Royalties | ||||
Total Cash Operating Cost | ||||
By-Product Revenue | ( | |||
Total Cash Operating Cost Net of By Product Revenue |
PERMITTING
The proposed operation has been evaluated by the
The EIS was prepared by the
The Copper Flat Mine EIS was an extensive review that took seven years to complete. The FEIS identifies potential impacts on the physical, biological and social environment from all phases of the proposed project, including construction, mine operation and closure. The document identifies long-term, cumulative effects from this project and other activities in the region, while considering a reasonable range of alternatives that meet the Agency’s legal mandates.
In a separate action, the BLM on
In a separate Federal process, the Company has evaluated the Copper Flat site for jurisdictional waters of the US (WOTUS), which may include ephemeral drainages. Section 404 of the US Clean Water Act regulates the discharge of dredged or fill material into WOTUS. The program is administered by the
The Company has also achieved significant progress on state permits for the Copper Flat Mine.
The NMED Air Quality New Source Review Permit 0365-M3 was issued to
The NMED Groundwater Discharge Permit DP-1840 was issued to
- Completion of the Hearing Officer’s report on the October hearing. This report was completed and submitted to MMD in
December 2018 , and subsequently posted on the MMD website for public review. - Completion of a financial assurance plan with approval and acceptance by MMD, NMED and the BLM (“FA Agencies”).
- MMD’s receipt of the NMED Secretary’s Determination “stating that the permit applicant has demonstrated that the activities to be permitted… will be expected to achieve compliance with all applicable air, water quality and other environmental standards if carried out as described in the permit application.” The NMED indicated when they issued the Discharge Permit that the NMED’s Secretary Determination will be considered after the Financial Assurance Plan is approved by all participating agencies.
- MMD’s receipt of BLM’s approval of the proposed mining operation. BLM has indicated that approval of the proposed mining operation will be considered after the Financial Assurance plan is approved by participating agencies.
Financial assurance for reclamation and closure of the Copper Flat Mine requires approval by MMD, NMED and BLM. The Company prepared and submitted to the Agencies a proposed reclamation and closure cost estimate for the life-of-mine plan and has revised the calculations to fully address Agency comments. In correspondence dated
Water Supply
The Company has determined that it will require approximately 6,100 acre-feet (“AF”) of water for planned operations. Water resources are carefully managed and controlled in the
In 2010, the Company entered into an option and purchase agreement to acquire approximately 7,500 AF of vested and inchoate water rights for the mine. In 2015, the Company filed for court adjudication of the acquired water rights. On
Ensuring pumping groundwater will not impair other water users is necessary in
In
The Company continues to identify other potential sources of water for the Copper Flat Mine and is pursuing options to secure the full amount of water needed for the operation.
MINERAL RESERVES AND RESOURCE
Copper Flat’s mineral resources and reserves are unchanged from the
Mineral Reserves1,2,3
Cut-Off Grade (NSR/t) | Tons (000s) | Cu Eq (%) | Copper (%) | Moly (%) | Gold (opt) | Silver (opt) | ||
Proven | 78,857 | 0.32 | 0.010 | 0.003 | 0.07 | |||
Probable | 34,227 | 0.25 | 0.007 | 0.003 | 0.04 | |||
Total | 113,084 | 0.39 | 0.30 | 0.009 | 0.003 | 0.06 |
Mineral Resources1,2
Cut-Off Grade (NSR/t) | Tons (000s) | Copper (%) | Moly (%) | Gold (opt) | Silver (opt) | ||
Measured | 126,655 | 0.28 | 0.009 | 0.003 | 0.06 | ||
Indicated | 178,571 | 0.19 | 0.005 | 0.002 | 0.04 | ||
Total | 305,226 | 0.23 | 0.007 | 0.002 | 0.05 |
(1) Effective
(2) Reserves and resources based on
(3) Mine design based on
The Copper Flat reserves and resources are developed from a computerized block model that utilizes a drill hole database containing 233 drill holes and 181,326 feet of drilling that continued through to the end of 2012. In addition to the drilling program, the company re-assayed more than 6,000 historical pulps to obtain gold and silver data.
MINING AND PROCESSING
Copper Flat is a porphyry copper-gold deposit that is near surface and amenable to open pit mining methods. The pit operations are planned to use standard mining equipment, including: 45,000 lb., single pass rotary blast hole drills, 19-cu-yd front-end loaders, and 100 ton off-highway haul trucks. The mine plan includes a mine support fleet comprised of track and rubber-tired dozers, motor graders, and 10,000-gallon water trucks. Material mined totals 158 million tons of ore and waste over the life-of-mine at an average stripping ratio of 0.40 tons of waste per ton of ore. The mining rate peaks at 17.5 million tons of total material per year.
The construction program benefits from the use of existing infrastructure and the timeframe expected to construct and commission the project is estimated to require 18 months. Following construction, the project schedule includes 11.1 years of mining and ore processing.
Ore will be processed through a standard crushing, grinding and sulfide flotation concentrator to produce a copper-gold-silver concentrate and a molybdenum concentrate. The Copper Flat concentrator is scheduled to process 10.8 million tons per year for the first five years of production and 9.9 million tons per year for the remainder of the mine life when harder ores are encountered at depth in the deposit. Copper recovery to concentrate is projected to average 70 million pounds per year during the first five years of operation and 57 million pounds per year when averaged over the full life-of-mine.
The Copper Flat ore lends itself to common crushing and grinding practice and standard flotation reagents and the mill is designed to have a simple gyratory crusher and SAG/ball mill grinding circuit followed by a conventional floatation circuit to produce separate copper and molybdenum concentrates. Metallurgical testing shows the Copper Flat ore contains coarse gold that is recoverable through physical separation and gravity separation equipment, this equipment is included in the process flow sheet to improve gold recovery. As a result of metallurgical test work, the expected life-of-mine process recoveries are projected to be: 93% copper; 78% molybdenum; 74% gold; and 83% silver.
The mine will produce approximately 100,000 tons of copper concentrate and 1,300 tons of molybdenum concentrates per year for the life-of-mine. The copper concentrate is expected to assay 27% to 30% copper based on lab tests and actual plant performance achieved by Quintana Minerals in the past operation. The molybdenum concentrate is expected to assay 50% to 60% molybdenum oxide. ICP analysis of the copper concentrate determined that the concentrate is expected to contain very low concentrations of potential smelter penalty elements
PRODUCTION METRICS
11.1 | |
Strip Ratio (Waste Tons : Ore Tons) | 0.4:1 |
LOM annual processing rate (Ktons) | 10,200 |
Copper equivalent LOM annual production (Klbs) | 71,700 |
Copper equivalent LOM production (Klbs) | 796,000 |
Copper LOM annual production (Klbs) | 56,600 |
Copper LOM production (Klbs) | 628,000 |
Gold LOM annual production (Ktrozs) | 20 |
Gold LOM production (Ktrozs) | 227 |
Copper equivalent LOM average grade | 0.38% |
Note: Copper equivalent grade and production based on base case metal prices and plant recoveries
TECHNICAL REPORT
A technical report on the update will be filed on SEDAR at www.sedar.com and will also be available on the Company's website at www.themacresourcesgroup.com within 45 days of the date of this news release. The Company will release an announcement regarding report availability when the report is posted.
Technical information in this news release has been read and approved by
ABOUT
The Feasibility Study Technical Report update is being compiled by
ABOUT INDEPENDENT
Mineral resources, reserves, mine planning, and cost estimating were prepared by IMC of
ABOUT GOLDER ASSOCIATES
Engineering, design, and cost estimating of the Copper Flat tailings storage facility were prepared by
ABOUT
THEMAC is a copper development company with a strong management team and as of
For more information please visit www.themacresourcesgroup.com or review the Company's filings on SEDAR (www.sedar.com).
FORWARD LOOKING STATEMENTS
Certain information contained or incorporated by reference in this press release, including any information as to THEMAC’s future financial or operating performance, the likelihood and timing of commercial production, construction of plant, and obtaining required permits, statements with respect to the estimation of mineral resources and reserves, expanding mineral reserves and mineral resources, the realization of mineral reserve and mineral resource estimates, the timing and amount of estimated future production, capital costs, costs of production, metal or mineral recoveries, mine life and production rates, capital expenditures and success of mining operations, expected IRR and NPV constitute “forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements. The words “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by THEMAC, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Such assumptions include the specific assumptions set out in this press release and in the Report, that future capital and operating costs will be in line with THEMAC’S assumptions, that mineral resource and mineral reserve estimates prove accurate, permits required to commence production will be obtained on a timely basis, copper, molybdenum, gold and silver prices will remain consistent with THEMAC’s expectations, that there are no changes in THEMAC’s development plans as new information is received, that THEMAC will be able to access financing, equipment and sufficient labor to carry out its planned business. Known and unknown factors could cause actual results to differ materially from those projected in the forward- looking statements. Such factors include, but are not limited to: fluctuations in the currency markets; fluctuations in the spot and forward price of copper, molybdenum, gold, and silver; volatility in the price of fuel and electricity; changes in national and local government legislation, taxation, controls, regulations and political or economic developments in
“Operating cost per pound of copper”, “Life-of-mine sustaining capital”, “IRR” and similar terms are alternative performance measures. These performance measures are included because these statistics are key performance measures that management may use to monitor performance. Management may use these statistics in future to assess how THEMAC is performing to plan and to assess the overall effectiveness and efficiency of mining operations. These performance measures do not have a meaning within International Financial Reporting Standards ("IFRS") and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. These performance measures should not be considered in isolation as a substitute for measures of performance in accordance with IFRS.
For further information contact:
Chief Executive Officer
Phone: +1 505.382.5770
www.themacresourcesgroup.com
2020 GlobeNewswire, Inc., source