Toromocho study projects major output for Peru Copper

Vancouver – Results from the Toromocho pre-feasibility study indicate very positive economics for Peru Copper’s (PCR-T, CUP-X) proposed copper-molybdenum operation in central Peru.

The study estimates average annual output of 601 million pounds (272,788 tonnes) of copper and 11.9 million pounds (5,387 tonnes) of molybdenum over a 21-year mine life. A net present value of US$814 million is calculated along with an after-tax internal rate of return of 16%.

Project economics were estimated using metal values of US$1.10 per pound for copper, US$10.00 per pound for molybdenum and US$6.50 per oz. for silver, and a discount rate of 8%.

Pretax operating costs are estimated at a relatively low 51.4 per pound of copper, rising to 68.3 per pound when worker’s participation, government royalties and income taxes are factored in. Anticipated capital costs for the large-scale, open pit project comes in at a whopping US$1.5 billion.

Toromocho hosts a total measured and indicated resource of 1.8 billion tonnes grading 0.47% copper, 0.016% molybdenum and 6.8 grams silver per tonne (0.68% copper equivalent). Within the resource, a central core of 967 million tonnes of 0.6% copper, 0.023% molybdenum and 8.1 grams silver (0.88% copper equivalent) was reviewed using a 0.6% copper equivalent cut-off grade.

Planned open pit mining of the large porphyry deposit will benefit from favourable orebody geometry, resulting in a very low waste-to-ore stripping ratio of 0.57-to-1. Additionally, Peru Copper’s project enjoys good access to infrastructure, situated adjacent to a major highway and near a railway operating between Doe Run’s La Oroya smelter complex and Lima.

Peru Copper is examining all options in its planned development of Toromocho, including evaluating potential major company involvement.

Shares of Peru Copper rallied on the production estimate news, gaining as much as 18% or 69 to the $4.50-level on strong volume. The company posts a $412 million market capitalization based on its 98.2 million shares outstanding. An additional 19.6 million warrants, exercisable into common shares at US$2.00 apiece, expire in mid-March and are very likely to be fully exercised.