Capstone Mining has announced the results of a pre-feasibility study (PFS) for a mine-life extension of its Pinto Valley open-pit mine in the Globe-Miami mining district of Arizona that extends the mine life by eight years from 2018 to 2026.

Under the new operating plan, designated PV2, Pinto Valley will produce an average of 128.4 million lb/y of copper contained in concentrate and 6.6 million lb/y of copper cathode during the first five years of operation. Life-of-mine production will average 119.5 million lb/y of copper contained in concentrate plus 6.3 million lb/y of cathode copper, as well as 1.4 million lb/y of molybdenum and 235,000 oz/y of silver credited to concentrate.

Total sustaining capital costs for PV2 are estimated at $187.9 million over 12.3 years.

Pinto Valley’s proven and probable mineral reserves currently stand at 232 million mt grading 0.33% copper. This evaluation is constrained by the permitted capacity of existing tailings facilities.

Capstone believes there is potential to extend Pinto Valley operating life if mineral resources not included in the PV2 mine plan can be successfully converted into mineral reserves. Capstone intends to commence engineering and economic studies to consider all remaining current mineral resources not included in the PV2 mine plan and their potential for development beyond 2026.

Mineral resources at Pinto Valley currently stand at 1.563 billion mt grading 0.30% copper at a cutoff grade of 0.18% copper, up from mineral resources of 968 million mt grading 0.35% copper at a cutoff grade of 0.25% copper published in December 2013.

The Pinto Valley mine is a conventional open-pit operation. Concentrate production is based on a primary-secondary-tertiary crushing system, six ball mills, and flotation concentration to produce a copper-molybdenum concentrate. Copper cathodes are produced at an SX/EW plant by leaching run-of-mine material grading above 0.10% copper and below 0.18% copper.

The PV2 PFS has identified the need for approximately $48 million in additional mining equipment from 2014 to 2017 to meet increased production requirements, including one new drill, two new hydraulic shovels, and four new Cat 789 haul trucks. Additional auxiliary fleet will also be purchased.

Ore feed to the mill is planned to continue at 50,000 mt/d for the first two years followed by an increase to 52,000 mt/d for the remaining life of the mine. Low-grade ore that will be stockpiled earlier in the mine life will be processed in 2025 and 2026. Metal recoveries average 88% for copper and 42.8% for molybdenum.

Extension of Pinto Valley mine life will require amendments to the existing Aquifer Protection Permit issued by the Arizona Department of Environmental Quality to add proposed low-grade and waste dumps as discharge facilities. A Plan of Operations is currently under review with the U.S. Forest Service related to a consolidation of permit renewals required for the current operation of Pinto Valley. The scope of PV2 does not require any changes to this application. The impact on the closure plan will also be considered as part of the review but is not expected to be material.

Capstone acquired the Pinto Valley operation and the associated San Manuel Arizona Railroad Co. from BHP Billiton in 2013.