Positive PEA for Filo del Sol with a US$705 Million NPV and 23% IRR

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Filo Mining Corp announced the results of a positive Preliminary Economic Assessment (“PEA”) at its flagship 100% owned Filo del Sol project on the border between Argentina and Chile, setting up one of the most exciting development projects in South America.

Filo del Sol PEA Highlights (considering only the oxide portion of the resource):

  • A $705 million after-tax NPV using an 8% discount rate and an IRR of 23%
  • Pre-production capital cost of $792 million, including $71 million in capitalized pre-stripping
  • Average annual production of approximately 50,000 tonnes of copper, 115,000 ounces of gold, and over 5 million ounces of silver per year
  • Life of Mine revenue split approximately 56% copper, 26% gold, and 18% silver
  • Robust resource, with most of the mine plan derived from Indicated Mineral Resources (79%)
  • Open pit mining followed by heap leach processing to produce copper cathode and gold-silver doré
  • Excellent metallurgy and fast leach kinetics provide unique processing opportunities

Commenting on the results, CEO Adam Lundin stated, “The results of the initial PEA for the oxide portion of Filo del Sol are excellent. With only approximately 25% of the alteration zone drilled to date, and none of the sulfide resource included in the study and economics, it is already a robust project. We are excited about the upcoming field season and we will now move forward with the Pre-Feasibility Study.

 

Project Description

The Filo del Sol project is located on the border between Chile and Argentina, 140km southeast of the city of Copiapó and is covered under the Mining Integration and Complementation Treaty between Chile and Argentina, which provides the framework for the development of cross border mining projects.

The project is a high-sulphidation epithermal copper-gold-silver deposit associated with a large porphyry copper-gold system. Overlapping mineralizing events combined with weathering effects, including supergene enrichment, have created several different styles of mineralization, including gold oxide (AuOx), copper-gold oxide (CuAuOx), silver-rich (Ag) and primary sulphide (Sulphide). These four main domains are based primarily on mineralogy and have different metallurgical characteristics.

The PEA contemplates open pit mining of the AuOx, CuAuOx and Ag zones. All material is processed by heap leaching through one of three processing streams: AuOx to a permanent cyanide leach pad; low-gold CuAuOx to a permanent acid leach pad; and high-gold CuAuOx plus Ag to a dynamic on/off pad for initial acid leaching to recover copper and then moved to the permanent cyanide leach pad to recover the precious metals. All the copper is sold as cathode, while the precious metals are sold as doré. The primary sulphide mineralization was not included in the PEA study and remains a potentially significant upside opportunity for future development.

Including pre-stripping, Filo del Sol would be in operation for 15 years, processing at a rate of 50,000 tonnes per day (tpd), for a total of approximately 215 million tonnes (Mt) of material over the life of the mine.

 

Project Opportunities

  • Evaluating unique processing opportunities to take advantage of the fast leach kinetics which could reduce project capital by recovering soluble copper through installing a conventional washing system for process feed after the crushing circuit. Further study of this option is planned and, if successful, the washing stage could eliminate the permanent copper and on/off leach pads and their associated materials handling systems, saving on capital and operating costs associated with these installations;
  • Optimizing the mine plan and production schedules by evaluating opportunities to smooth production and bring forward copper revenues;
  • Increasing metallurgical recoveries with further test work and optimization; and
  • Delineating more or higher-grade material through continued exploration on the Company’s extensive land package. The deposit remains open in most directions with several additional exploration targets outside of the immediate deposit area that have seen only preliminary exploration. In addition, there are areas of cover near the deposit that are prospective for discovery that have not been drill tested.

 

Capital & Operating Cost Estimates

Capital costs were derived from a variety of sources including comparative analysis of other operations, derivation from first principles, equipment quotes and factoring from other costs contained within the PEA study.

Estimated Capital Costs US$ million

 

Pre-Stripping $71

 

Mining $79

 

Processing $360

 

Infrastructure & Other $66

 

Total Direct Costs $575

 

Indirect Costs $56

 

EPCM $59

 

Contingency $102

 

TOTAL INITIAL CAPEX $792

 

LOM Sustaining Capital $122

 

Closure $45

 

Total Life of Mine Capital $960

 

 

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