The Rapu Rapu polymetallic project in the Philippines could well be economically viable, according to a preliminary feasibility study.
The study, led by Signet Engineering of Australia, calls for mining of the Ungay Malobago deposit by open-pit methods and processing of 800,000 tonnes annually by conventional flotation to create copper and zinc concentrates. The concentrates would then be shipped elsewhere for smelting and refining.
Since late 1998, Australian-listed Lafayette Mining has been operating and funding the project to earn a 63.75% interest from
Resources (by Australian standards) are pegged at 6.6 million tonnes grading 1.32% copper and 2.14% zinc, plus 2.61 grams gold and 31.26 grams silver per tonne. Nearly 90% of the resource is classified as measured. Over an estimated mine life of seven years, production would consist of about 62,400 tonnes copper, 85,000 tonnes zinc, 316,000 oz. gold and 3.41 million oz. silver.
Capital costs ring in at US$35 million and would be funded out of equity. Payback is expected within two years. Operating costs are projected at just over US$21 per tonne, or US$123 million over the life of the mine.
Assuming metal prices of US80 cents per lb. copper, US55 cents per lb. zinc, US$260 per oz. gold and US$5.25 per oz. silver, the project would yield an internal rate-of-return (IRR) of about 47% and a net present value (NPV) of US$44 million. Both figures exclude interest and tax; the latter could be waived in the first four years of operations.
Total net revenue is pegged at US$241.8 million, net of smelting, refining and related charges. Minus the cash costs, the study estimates a life-of-mine operating cash flow of US$118.7 million.
Plans call for tailings to be deposited on land, though Lafayette is considering disposing of them in the sea. If the sea option is chosen, capital costs would fall to US$32.65 million and the IRR and NPV would rise to 61% and US$58.9 million, respectively. (These estimates assume a gold price of US$320 per oz. and a silver price of US$5.60 per oz.) Lafayette is in discussions with potential financiers to determine the scope and extent of a bankable feasibility study.
Mineralization remains open in all directions and the southernmost hole drilled, No. 80, so far has returned 80 metres grading 1.23% copper, 2.09% zinc, 3.81 grams gold and 29.75 grams silver.
To earn its 63.75% interest, Lafayette must spend US$3 million on the project within four years, which would leave TVI with 25% and a privately held Philippine company with the remainder.
Meanwhile, at TVI’s Canatuan project, also in the Philippines, a group of about 50 demonstrators is holding up a drill program. As a result, only two of five planned holes have been sunk. The demonstrators are described by TVI as “self-styled area owners,” at least one of whom is engaged in “illegal small-scale mining” on the property. The company has applied for a restraining order and injunction against the protesters and expects to resume drilling shortly.
The program is part of a letter-of-intent agreement between TVI and two Japanese companies. A joint-venture agreement will follow if metallurgical tests and a feasibility study prove positive (T.N.M., July 12/99).
Canatuan hosts an oxide resource of 935,500 tonnes grading 4.12 grams gold and 133.44 grams silver, plus a sulphide resource of 1.3 million tonnes grading 3.36% copper, 2.45% zinc, 1.45 grams gold and 73.02 grams silver.
An existing pilot plant will be expanded to 300 tonnes per day to treat the oxides, and TVI will build a 850-tonne circuit to treat the sulphides. The Japanese firms would buy all the copper and zinc concentrates produced.
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