CHILE and ARGENTINA – NGEx Resources of Vancouver has announced plans to create the Constellation copper-gold project by combining the Los Helados project in Chile and the Josemaria project in Argentina. Cost of development is estimated at US$3.08 billion, and sustaining capital will reach US$4.36 billion.
The company is planning both underground and open pit mining with ore to be processed in a 150,000 t/d mill. By creating the Constellation project, the costs of underground development at Los Helados can be deferred until the sustaining capital phase of the project. Mining (and presumably cash generation) will begin at the Josemaria open pit.
NGEx says the positive preliminary economic assessment points to Constellation being among “the largest and most exciting development projects in South America.”
The mineral resources supporting the Constellation project are immense. At Josemaria there are 1.1 billion indicated tonnes at 0.31% Cu, 0.22 g/t Au and 1.0 g/t Ag plus 404 million inferred tonnes at 0.24% Cu, 0.15 g/t Au and 0.8 g/t Ag. The Lost Helados resource includes 2.1 billion indicated tonnes grading 0.38% Cu, 0.15 g/t Au and 1.37 g/t Ag plus 827 million inferred tonnes at 0.32% Cu, 0.10 g/t Au and 1.32 g/t Ag. Initial development will include roughly half the tonnage.
The Constellation project has an after tax (8%) net present value of US$2.1 billion and an internal rate of return of 14.5%. Annual production during the first five years of operation will be 185,000 tonnes of copper,345,000 oz of gold, and 1.3 million oz of silver. The project is expected to pay for itself over 4.6 years with an undiscounted after tax cash flow.
Additional information is available in the news release of Jan. 7, 2016 or at NGExResources.com.
Editor’s note: The intergovernmental niceties of a mining project that straddles the border of Argentina and Chile was pioneered by Barrick Gold over a decade for its Pascua-Lama gold project. Construction of that project, and recovery of the more than 15 million oz of gold in the ground, is currently stalled due to disputes with the Chilean government.