Investors liked the progress made by Avanco Resources (ASX: AVB) on the feasibility of a early stage "starter mine" generating early cash flows mining the high grade copper at Antas South.
Even at current low copper prices, project economics were forecast to be robust, with strong cash flows based on a JORC compliant high grade resource of 210,000t at 11.65% copper. With an in-situ generated value in excess of US$120M.
The Antas South Deposit is located on the Rio Verde Property in the World Class Carajas Mineral Province of Brazil.
Key points from the study:
- Avanco envisages a fast-track approach to the implementation and exploitation of the starter project
- Recovery process flow sheet design with supporting metallurgical test work report expected during in the coming months
- Study based on targeted production of 7,000t of copper per year for an initial four year mine life
- Streamlined permitting applications now well advanced with regulatory approval expected to be in place during early 2010.
- Opportunities for in country copper sales exist and may attract premiums on LME copper price. Discussions with potential off-take buyers underway.
- Capex for development of the project to be finalised on receipt of flow sheet design. Focussed on a low Capex project start-up.
- Further drilling critical to increases and upgrading the high grade resource into the measured and indicated categories.
Additional high grade copper ore opportunities have been identified that are potential sources of feed to a centrally located plant.
Avanco is in discussions with a number of potential partners to jointly develop the Antas South Deposit. Exploitation of the starter project will allow Avanco to operate economically throughout times of week copper prices while having up-side exposure through its larger lower grade JORC resource to any improvements in prices.
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