View of the Santo Domingo IOCG development project in Chile. (Image: Capstone Mining)
CHILE – Capstone Mining Corp. of Vancouver has updated the feasibility study for the Santo Domingo iron oxide-copper-gold (IOCG) development project in the Atacama desert. Capstone holds a 70% interest, and Korea Resources Corp. holds the balance.
The updated feasibility study looked closely at the economics of the project. The outlook is positive with slightly lower power costs and several engineering changes, such as using desalinated water rather than seawater. For the first time, resources of cobalt are included.
Capstone further said that it will explore several alternatives, including selling a portion of the project. Streaming agreements for gold and cobalt will also be considered.
Santo Domingo has an approved environmental impact assessment and the land on which to construct a new port for the export of copper and iron concentrates. Three construction permits have been received, and the remainder are expected to be received in 2019. The project is to be construction ready by early 2020.
Capstone says Santo Domingo has an after tax net present value (8% discount) of US$1.03 billion and an after tax internal rate of return of 21.8%. The payback period would be 2.8 years. The pre-production capex will be US$1.51 billion to establish mine with a life of 17.9 years and average annual production of 134 million lb. of copper, 4.2 million tonnes of iron concentrate, and 17,000 oz. of gold. During the first five years of operation, copper production will be 259 million lb.
The project is underpinned by proven and probable reserves of 392.3 million tonnes grading 0.30% copper, 27.6% iron and 0.04 g/t gold. Inclusive of reserves, the measured and indicated resource is 537 million tonnes grading 0.30% copper, 25.7% iron, 0.04 g/t gold, and 229 ppm cobalt. The inferred portion includes 48 million tonnes at 0.19% copper, 23.6% iron, 0.03 g/t gold, and 197 ppm cobalt.
More about the Santo Domingo IOCG project is available at www.CapstoneMining.com.