Cordoba’s Alacran feasibility unlocks US$40M payment from Chinese partner

Cordoba Minerals (TSXV: CDB; US-OTC: CDBMF) has delivered a feasibility study for its Alacran joint venture in Colombia that outlines a US$420.4-million copper project with a 14.2-year mine life.

China’s JCHX Mining Management is Cordoba’s 50/50 joint venture partner at the open pit project.

Alacran has an after-tax net present value of US$360 million (at an 8% discount) with an internal rate of return of 23.8% and a payback period of three years, the study showed. 

The feasibility study reinforced a majority of metrics and economic figures presented in the project’s 2022 prefeasibility study, which showed an NPV of US$415 million, an IRR of 25.4%, and an almost identical payback period.

Total metal production is calculated at 797.2 million lb. of copper, plus 550,000 oz. of gold and 5.35 million oz. of silver. These are mined from total probable mineral reserves of 97.9 million tonnes grading 0.41% copper, 0.23 gram gold per tonne and 2.63 grams silver.

The information from the feasibility forms the basis for the project’s environmental impact assessment (EIA). The company said it filed its EIA application on Dec. 11.

JCHX acquired a 50% interest in late 2022 in return for US$100 million, to be paid in three installments. As part of the agreement, Cordoba is expected to receive a second installment of US$40 million in the coming days. The third and final payment of US$20 million is due after approval of the EIA.

“The filing of the EIA in conjunction with the completion of the feasibility study for Alacran officially commences the next chapter for Cordoba as we transition from a pure exploration company to a development enterprise,” CEO Sarah Armstrong-Montoya stated in a press release.

Located 390 km northwest of Bogotá and 160 km north of Medellín, the Alacran project is positioned to be the largest copper mine in Colombia in the near future, and has already been declared a “project of national interest” by the government. It forms part of the larger San Matias land package consisting of 22 mining concessions.

Following the latest project milestone, it is expected that detailed mine engineering and design work will begin shortly, with early engineering targeted for completion late in the second quarter. The feasibility level of engineering work, which is approximately 30-40% of the total engineering tasks required for the project, had already been carried out to support the capex calculations in the feasibility.

As previously agreed, JCHX has the right of first offer to bid on the engineering, procurement and construction and detailed design agreement contracts.

“Given our partner JCHX’s deep experience in mine construction, development, and contract mining, we are very confident that the company will be able to swiftly compose the most optimal plan and assemble the best possible team to promptly bring the Alacran project online,” Armstrong-Montoya added.

Cordoba shares ended the day up 1.7% to 30¢ each. The junior miner has a market capitalization of $27.3 million.