Initial scoping study looks positive for Antares Minerals’ Haquira project

A scoping study and preliminary economic assessment of the near-surface leachable portion of the Haquira copper deposit in south-central Peru suggest there is an opportunity for an economic operation at “manageable” capital costs, Antares Minerals (ANM-V, ANMFF-O) says.

The preliminary economic assessment evaluates the near-surface secondary copper mineralization that is amenable to low-cost solvent extraction-electrowinning processing (SX-EW), but doesn’t take into account any of the recently discovered underlying copper-molybdenum-gold primary sulphide mineralization at Haquira East, the company notes.

The SX-EW project will probably be the initial stage of a larger integrated mining operation that would incorporate conventional milling and flotation processing of the underlying copper-molybdenum-gold primary sulphide mineralization, which currently is being defined at Haquira East.

An initial primary resource will be defined at Haquira East within the next few months and Antares says it will complete an integrated scoping stage evaluation by the end of this year.

In the meantime, Antares is proceeding with a prefeasibility study at the project, which is contiguous and immediately south of Xstrata Copper‘s (SXRAF-O, STA-L) Las Bambas copper-gold project.

Results of the preliminary economic assessment announced today indicate that the near-surface leachable portion of the Haquira deposit would produce average annual revenues of US$220 million, with average annual after-tax profit of US$46 million.

An open-pit, solvent extraction-electrowinning operation there would mine an average of 50,000 tonnes of ore per day.

Using a base-case copper price of US$2.00 per lb would yield an after-tax internal rate of return (IRR) of 25.9%.

It would also produce an after-tax net present value (NPV) of US$224.4 million, using an 8% discount rate. (Interestingly, the NPV of just the near-surface leachable portion of the Haquira copper deposit exceeds the company’s current market capitalization.)

Initial capital costs come in at US$301 million, and average production would reach about of 109 million lbs of copper cathode over the course of the mine’s estimated 11-year lifespan.

An early, higher grade starter pit would allow for payback in 2.9 years. Cash operating costs would be in the range of US$1.09 per lb copper over the duration of the mine life, including royalties.

The resource base for the scoping study consisted of an indicated resource of 212.2 million tonnes grading 0.42% total copper and an additional inferred resource of 77.2 million tonnes grading 0.36% total copper (resources were reported at 0.2% copper cut-off.)

Antares has an option agreement with Minera Phelps Dodge del Peru to acquire a 100% interest in Haquira by completing optional payments of US$15 million over a five-year period.

At mid-day in Toronto, Antares was trading up 30 a share, or 8.82%, at $3.70.

The junior exploration company has traded between $1.45 and $5.14 over the last 52 weeks and has 42.27 million shares outstanding.

In addition to its Haquira project with Minera Phelps Dodge, Antares plans to start exploration drilling in July at the new Cristo de los Andes project, 10 km south of Haquira.

In Argentina, Antares is exploring the Rio Grande copper gold porphyry project in northeastern Salta province in an option-joint-venture agreement with Mansfield Minerals (MDR-V, MFMNF-O).