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Tuesday, 26 March 2013
Curis Resources shows positive economics of Florence project using other development scenarios
Curis Resources (TSE:CUV) said Tuesday it will file its technical report for its Florence copper project in central Arizona later this week, and provided today two other operating and capital cost scenarios using different copper recovery rates to the ones used in the prefeasibility study released last month.
Using the base case 70 percent copper recovery rate, the report, authored by M3 Engineering & Technology, showed that using a long-term copper price of US$2.75 a pound, the project had an after tax net present value of $505 million using a $2.75 per pound copper price and a 7.5 percent discount rate, with a 31 percent internal rate of return (IRR) and a payback period of just under three years.
The direct operating cost for the life of the project was estimated at US$0.79 per pound of copper recovered, with initial capital costs pegged at US$196 million last month.
The company said Tuesday though that in finalizing the results, it was recognized that pre-production costs associated with developing a production-grade leach solution would have to be included in the initial capex, resulting in slightly higher capital costs of $208 million for the base case.
The IRR at a price of $2.75 per pound of copper also fell slightly to 29 percent, and adjustments in operating cost, total production cost, operating income and net cash flow, after tax, were less than 1 percent, Curis said in its release today.
Today, the company also provided further development case scenarios for the Florence copper project, using 63 percent and 75 percent copper recoveries, saying "positive economics" were indicated in both cases.
Using the lower copper recovery rate of 63 percent from the base case, and the same $2.75 per pound copper price, net present value post tax is still pegged at $440 million at a 7.5 percent discount rate, with an IRR of 28 percent.
"These engineering evaluations illustrate the robustness of the project under changing economic and operating parameters, confirming both the economic and technical viability and the significant near term development opportunity associated with the Florence Copper project" said Curis in the statement, citing president and CEO, Michael McPhie.
The property, which is located in central Arizona and owned outright by Curis, hosts a shallowly buried porphyry copper deposit with a significant oxide mineral resource that is amenable to in-situ copper recovery.
The in-situ recovery process requires no movement of rock or overburden, and there is therefore a substantially smaller footprint, with much less of an environmental impact on the surrounding area than with more traditional open pit mining operations.
The technique also requires substantially less mechanical energy in the form of trucks and explosives, and therefore generates significantly lower operating and capital costs.
The Florence project has a long history - having been advanced to a prefeasibility study level, and attaining full project permits when it was owned by BHP Copper in the late 1990s.