BRITISH VANCOUVER – Abacus Mining and Exploration of Vancouver says its joint venture partner, KGHM Polska Miedz, will exercise its option to boost its interest in the Ajax copper-gold project near Kamloops. That will give KGHM an 80% interest, and leave Abacus with a 20% interest.
Upon closing, KGHM will pay approximately US$30 to Abacus so that the Canadian company can meet its funding commitment to the US$795 million Ajax development. The Polish company will fund 80% of the costs.
The feasibility study confirmed the economic viability of the Ajax project at long term copper and gold prices, and demonstrated the positive effect of increases in metal prices. The base case pre-tax net present value (NPV - 8%) of US$416 million using long term average prices (US$2.75/lb Cu and US$1,085/oz Au), almost quadruples to US$1.6 billion with a 2.2 year payback of initial capital of US$795 million assuming the scenario of US$3.50/lb Cu and US$1,700/oz Au, which is more reflective of current prices.
The feasibility study is available at AMEmining.com.
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