World Copper Ltd (TSX-V:WCU, OTCQB:WCUFF) has released the results of a preliminary economic assessment (PEA) on its Escalones copper project that vaults it amongst some of the more compelling South American development assets.
The PEA reveals a post-tax net present value (NPV) of nearly US$1.5 billion based on a $3.60 per pound life of mine copper price, with an internal rate of return (IRR) of 46.2% and payback period of 2.18 years.
Initial capital expenditure comes in at US$438.4 million from a construction decision, according to Vancouver-based World Copper.
The PEA confirms that the Escalones estimated inferred mineral resources are amenable to a large scale, bulk high-tonnage, open pit, mining operation, the company said.
READ: World Copper set to partner with University of Chile to develop new, more environmentally friendly methods in mining
Meanwhile, production would focus on the oxide heap-leachable material processed using a conventional heap leach operation with sulfuric acid and fresh water. The pregnant leach solution is further processed via solvent extraction and electrowinning to produce an average 52,000 tonnes, or around 114 million pounds of copper in cathodes per year over the 20-year life of mine.
Escalones has estimated inferred resources of 426 million tonnes of 0.367% copper, based on nearly 25,000 metres of drill core from 53 holes. World Copper said that the 3.45 billion pounds of copper should be amenable to heap leaching with an average recovery of 71%.
"The exceptional results of the Escalones PEA confirm what we at World Copper have always believed - that Escalones has the potential to be one of the most impressive copper properties in South America,” CEO Nolan Peterson said in a statement.
"Escalones now joins a peer group of large-scale, study backed, development-stage assets. Escalones has several attributes that make it attractive for development including robust economics, strong value metrics and the potential of rapid returns for a comparably low capital investment. These factors combine leading to a profitability index in the top quartile of peer group companies with a capital intensity in the bottom quartile," he added.
Peterson noted that the lowest quartile position on the global cash cost curve shows Escalones can be profitable even at lower copper prices.
“The results of the PEA, combined with Escalones' large land package and resource expansion potential, make it a truly outstanding project,” the CEO said.
Escalones is a porphyry-skarn copper-gold project that spans 161 square kilometres within the Santiago Metropolitan Region, in Central Chile, approximately 97 kilometres southeast of Santiago.
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