Partners American Bullion Minerals (ABP-T) and Teck (TEK-T) are reviewing a scaled-down version of their prefeasibility study of the Red Chris copper-gold project in northwestern British Columbia.
Teck has a 20% interest in the project, which can be increased to 55% by completing a bankable feasibility study and arranging production financing.
American Bullion would then have a 45% carried interest. Teck has until Aug.
3 to exercise its option.
Ongoing feasibility work is expected to focus on a smaller, less costly operation than previously envisaged. The revised plan calls for a 20-30,000-tonne-per-day mine with a capital cost in the range of $300-350 million. The companies are reworking the minable reserve at a higher cutoff grade, which would decrease reserves while increasing the mining grade.
The current prefeasibility study is based on a 90,000-tonne-per-day, open-pit mine and mill with a minable reserve of 494 million tonnes grading 0.323% copper plus 0.254 gram gold per tonne.
Based on a copper recovery of 88.4% and a gold recovery of 63.1%, yearly output is projected at 207 million lb. copper and 169,000 oz. gold.
The capital cost of a 90,000-tonne-per-day operation is estimated at $541 million. Assuming a 65-to-35 debt-to-equity financing, the project would have a 10-year payback, a 21.5% rate of return, and a net present value (at a 10% discount rate) of $96.3 million. These projections are based on metal prices of US$1 per lb. copper, US$400 per oz. gold and US$5 per oz. silver.
American Bullion has 12.2 million shares outstanding (13.4 million fully diluted) and roughly $3.4 million in working capital.
Be the first to comment on "New study scales back Red Chris"