Vancouver’s Los Andes Copper (TSXV: LA; US-OTC: LSANF) has signed a US$20-million royalty agreement with Ecora Resources (TSX: ECOR). The royalty includes a 0.25% net smelter royalty (NSR) on sales from open pit operations and a 0.125% NSR on underground production.
The new agreements are in addition to existing NSRs of 2% for open pit production and 1% for underground output.
Los Andes is developing its 100% owned Vizcachitas copper-molybdenum project in Chile, 150 km north of Santiago. A prefeasibility study released in February outlined a 26-year open pit operation at 136,000 tonnes per day. The pre-production capex is forecast at US$2.4 billion with a construction period of 3.3 years and a payback period of 2.5 years after production begins. Using a copper price of US$3.68 per lb. and 8% discount rate, the study estimated the after-tax net present value at US$2.8 billion and its internal rate of return of 24%.
Over the first eight years of operation, all-in sustaining costs are pegged at US$2.23 per lb. copper. Over the life of the project, they rise to US$2.35 per lb. copper.
The project has proven and probable reserves of 1.2 billion tonnes grading 0.36% copper, 136 ppm molybdenum, and 1.1 grams silver per tonne or 0.41% copper equivalent.
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