Metminco Ltd. reported the results of a new mining study of its Los Calatos copper project in southern Peru. The study, completed by Runge Pincock Minarco, considers a 6-million-mt/y underground mining operation using a sublevel caving mining method. Pre-production capital expenditure is estimated at $650 million, including contingencies of $111 million. Production would average 45,000 mt/y of copper in concentrate over a mine life of 17 years. Production would peak at 56,800 mt/y of copper in concentrate.

The new study is based on mineable measured, indicated, and inferred resources of 94 million mt grading 0.88% copper and 0.051% molybdenum. Life-of-mine C1 cash operating costs after by-product credits are estimated at $1.20/lb of copper. Underground production would start only 150 m below surface, so project development time would be relatively short.

An earlier 2013 mining study evaluated Los Calatos as a high-tonnage, low-grade, open-pit/underground mining opportunity with an average annual milling rate of 24 million mt, producing 98,400 mt/y of copper in concentrate over a mine life of 34 years. Pre-production capital for the open-pit/underground project was estimated at $1.32 billion.

Regarding the current study, Metminco Managing Director William Howe said, “There is a significant gap in the market for near-term development copper projects like Los Calatos. Located in an excellent jurisdiction and infrastructure setting, requiring modest capex, and producing approximately 50,000 mt of copper metal annually, Los Calatos is a deliverable mine.

“Metminco will now focus on advancing the project toward development, subject to funding. Attracting a partner for Los Calatos remains a priority, and we are well positioned to further engage with a number of parties currently undertaking detailed due diligence. The company will outline its implementation plan for the further development of Los Calatos during the third quarter of 2015.”

Metminco is initiating an in-fill drilling program to upgrade that part of the Los Calatos mineral resource that would be mined during the first 10 years of production. The drilling will also facilitate collection of metallurgical samples and geotechnical and hydrogeological information required for development of the underground mining operation.

Exploration drilling at the TD2 hydro-thermal breccia target adjacent to the main Los Calatos deposit remains a priority, as any resources discovered would complement currently planned development at Los Calatos.

An environmental baseline study will be initiated to accommodate the legislated requirements for completion of an Environmental Impact Assessment.

Metminco is an Australian company, headquartered in North Sydney, New South Wales, and listed on the ASX and AIM exchanges.