Doré Copper Mining Corp's aim to become a significant copper producer in Quebec has moved a step closer as the firm unveiled a positive preliminary economic assessment (PEA) for a restart at the Chibougamau mining camp.
The study envisages a so-called 'hub-and-spoke' operation with the Corner Bay copper-gold deposit acting as the main mine, while the Devlin copper deposit and former Joe Mann gold mine will provide feed to a central mill.
Using base case prices of US$3.75 per pound of copper and US$1,820 per ounce of gold, the 10.5-year project would generate 492 million pounds (Mlbs) of copper, 142,000 ounces of gold, and have a pre-tax net present value (NPV) of C$367 million and 30.7% internal rate of return (IRR).
Ernest Mast, CEO of the company, told investors that the PEA was a "major accomplishment" and followed "excellent" exploration results from Corner Bay in recent years where the resource has grown significantly.
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"The PEA represents today's status of the projects but we envision scaled expansions and future growth at both Corner Bay and Joe Mann while eventually sequencing in other deposits across our large land package in the Chibougamau mining camp.
"With three projects in the PEA, the average annual production over the mine life is approximately 50 Mlbs of copper equivalent, with a high of 90 Mlbs of copper equivalent. Our vision is to operate a viable sustainable hub-and-spoke operation over multi-decades to become a significant copper producer in Quebec," Mast said.
The PEA shows attractive economics and options to expand into a significantly larger operation, said Doré Copper, with the potential to extend the mine life by expanding resources at both Corner Bay and Joe Mann.
In addition, silver and moly from Corner Bay, which are currently not included in the resource, could be added, while there is potential to increase Corner Bay and Devlin concentrate grades which would decrease treatment charges and shipping costs.
Initial (pre-production) capital costs for the project were put at C$180.6 million, while sustaining capital costs over the life of mine (LOM) were pegged at C$402.4 million, which includes the capital to restart Joe Mann and overall closure costs.
The project generates cumulative cash flow of C$455 million on an after-tax basis and C$747 million pre-tax at a base case of $3.75 per pound of copper, based on an average mill throughput of 1,350 tonnes per day (tpd) over 10.5 years, the company noted.
The economics are also significantly influenced by copper prices, it highlighted. For example, using a spot price of US$4.20 per pound, the pre-tax NPV rises to C$555 million and a pre-tax IRR of 40.1%.
Average cash operating costs were pegged at US$1.35 per pound of copper-equivalent (CuEq) and all-in sustaining costs were put at US$2.24 per pound CuEq
Mining would start with underground development of the Devlin deposit and then underground development of Corner Bay via a ramp. Once the Devlin deposit is mined out after around four years, production would start from Joe Mann and be funded from cash flow from operations.
The company said its next steps include starting the feasibility study and submitting a permit application with the provincial government.
Doré Copper Mining has a large land package in the prolific Lac Dore/Chibougamau and Joe Mann mining camps, which has reportedly produced 1.6 billion pounds of copper and 4.4 million ounces of gold.
Its footprint includes 13 former producing mines, deposits and resource target areas within a 60 kilometre (km) radius of its Copper Rand mill.
Contact the author at giles@proactiveinvestors.com