Inmet Mining announced in early May 2012 that basic engineering for the Cobre Panama project in Panama is complete. Later in the month, the company reported the closing of an offering of $1.5-billion aggregate principal amount of 8.75% senior unsecured notes maturing in 2020, the net proceeds of which will be used to fund development of the project. With this closing, Inmet’s board granted its approval to start construction of Cobre Panama.
The Cobre Panama project is located in the Donoso district of Panama and is owned 80% by Minera Panama, S.A., an 80%-owned subsidiary of Inmet, and 20% by Korea Panama Mining Corp., a consortium of LS-Nikko Copper Inc. and Korea Resources Corp.
Cobre Panama is planned as a conventional truck-and-shovel, open-pit mine, with a concentrator that employs crushing, grinding and flotation to produce copper-gold and molybdenum concentrates. Ore throughput is planned to start at 160,000 mt/d, with later expansion to 240,000 mt/d. Mine life is projected at more than 31 years, based on reserves only and not including the project’s significant measured, indicated, and inferred resources. The strip ratio will average 0.58:1, waste to ore.
A series of analyses was conducted to determine economic pit limits and the mining sequence for three mineral deposits in the Cobre Panama concession area: Botija, Colina and Valle Grande. The concentrator site will be centrally located within 2 km of all three deposits, as well as the stockpile. A fourth, smaller, deposit, Medio, is roughly 500 m northeast of the Colina pit, and a small Medio pit is part of the mine production schedule in years 11 to 14.
A 300-MW, coal-fired power plant and ship-loading port facilities are part of the project.
Cobre Panama’s production of metal contained in concentrates for years two through 16 is planned at 298,000 mt/y of copper, 106,000 mt/y of gold, 1.6 million oz/y of silver, and 3,100 mt/y of molybdenum. Total production costs are estimated at $1.47/lb of copper, net of byproduct credits and including net smelter royalties of 5% on copper and molybdenum and 4% on precious metals, interest expense on assumed debt, project capital, and sustaining capital.
Total costs to develop Cobre Panama are estimated at $6.181 billion. The total capital estimate includes direct field cost for executing the project; the contractor’s costs for engineering, procurement, and construction management; the indirect costs of construction; the cost of an owner-provided mining fleet; owners’ costs incurred after May 1, 2012; contingency; and growth. The capital estimate does not include any amount for escalation.
Inmet expects to have committed more than 50% of the estimated capital required for Cobre Panama development by the end of 2012. The power plant has already been contracted under a lump sum, turn-key contract to SK Engineering & Construction, a Korean engineering and construction firm, which has already secured suppliers for long-lead items such as boilers, steam turbine generators, and flue gas desulphurization systems.
Inmet plans to contract detailed engineering and construction for the Cobre Panama process plant in the third quarter of 2012. The SAG mills, ball mills, and wrap-around drives have already been ordered and are currently being fabricated, with delivery expected in 2013. The company also expects to make a commitment to purchase its mine fleet by the third quarter of 2012.
Current Cobre Panama project timelines, subject to permitting and approvals, call for ore processing to start during the fourth quarter of 2015 and shipment of first concentrates in the first quarter of 2016.