Amur Minerals Corporation (AIM:AMC, OTC:AMMCF) completed its TEO project, the Russian equivalent of a feasibility level study, on its Kun-Manie nickel-copper sulphide project.
The project envisaged a 19-year open pit operational design with revenue generation derived from two saleable concentrates allowing for the recovery of payable values for both copper and nickel.
Minor payable amounts for gold, platinum and palladium will also be recovered.
The design parameters maximise revenue generation to the Russian Federation based on fully loaded taxation and royalty schemes. The total net present value deliverable to the Russian Federation is projected to be US$628mln. This approach does not optimise the financial return to the project operator, which is addressed during the next and final requirement, the mine planning stage.
A life of mine cutoff grade was defined to be 0.2% nickel. The annual nominal production rate of 12.4 million ore tonnes was selected.
Life of mine capital costs are estimated at US$1.92bn, with US$1.14bn allocated as preproduction and construction costs, US$698mln as sustaining costs and US$85mln as working capital.
The increase in the capital cost estimate from previously reported projections is attributable to the more than doubling of the previous annual operational capacity impacting the expansion of the open pit mining fleet, the addition of a copper recovery circuit within the process plant, tailings expansion, power plant requirements and the need to construct a dual carriage way access road capable of handling the increased mine support and concentrate transport needs.
Operating costs per ore tonne are projected to be US$42.32, including ore and waste mining costs, depreciation and royalties.
The LOM combined payable metals from the two concentrates total 627,000 nickel tonnes, 177,000 thousand copper tonnes, 1.5 tonnes of gold, 3.3 tonnes of platinum and 3.5 tonnes of palladium.
Nickel and copper account for 95% of the revenue obtained from the two intermediate nickel and copper intermediate concentrate products.
"The TEO Project feasibility study results generated by the GKZ expert commission indicates the Kun-Manie operation should be scaled up to as much as 12.4 million ore tonnes per year for a 19 year open pit operation,” said Amur chief executive Robin Young.
“This is a more than doubling of the previously anticipated capacity of six million ore tonnes per year. Given the current commodity prices for nickel and copper are substantially higher than the US$6.56 per pound nickel and US$3.07 per pound copper utilised in the TEO project, there is substantial upside potential.”