World Copper PEA for Escalones offers post-tax NPV of $1.5bn, payback in 2.2 years

The initial capital requirement at Escalones is $438.4 million, followed by a sustaining investment of $192.5 million over the 20-year life of the project.

World Copper (TSXV: WCU) has released a positive preliminary economic assessment for its Escalones copper project. The property is within the renowned Chilean porphyry copper belt that runs north-south in the central Andes Mountains. It is only 35 km from Codelco’s El Teniente, one of the world’s largest underground copper mines.

World Copper is anticipating a 50,000 t/d open pit mine and heap leach operation that will treat a total of 365.8 million tonnes of ore. Copper will be recovered from the pregnant leach solution using solvent extraction and electrowinning technologies. Estimated copper recovery is 72.5%.

The initial capital requirement at Escalones is $438.4 million, followed by a sustaining investment of $192.5 million over the 20-year life of the project. Payback of the initial capex will occur after 2.2 years.

The average annual copper production during the first five years of operation will be 124.7 million lb. at an all-in sustaining cost of $1.42 per lb. of copper. During that time, the head grade should average 0.49% copper.

At a copper price of $3.20 per lb., Escalones has post-tax numbers including a net present value, with an 8% discount rate, of $1.5 billion and an internal rate of return of 46.2%.

“Escalones has several attributes that make it attractive for development including robust economics, strong value metrics and the potential of rapid returns for a comparably low capital investment,” World Copper president and CEO Nolan Peterson said in a release.

“These factors combine leading to a profitability index in the top quartile of peer group companies with a capital intensity in the bottom quartile. Furthermore, the project’s lowest quartile position on the global cash cost curve indicates profitability in even the weakest copper market scenarios.”

The Escalones deposit has an inferred resource of 426.2 million tonnes grading 0.367% copper for 3.4 million contained pounds of acid soluble copper.

(This article first appeared in the Canadian Mining Journal)