At long last,
However, since zinc will be the primary metal produced during the first years of operation, the company plans to wait for zinc prices to improve before making a production decision.
The San Nicolas sulphide body is characterized by an upper high-grade zinc zone and a lower copper-rich zone, and is open at depth. A significant tonnage of copper mineralization exists below the defined mineral reserves and could be accessible from the bottom of the pit once open-pit mining is complete, if conditions warrant.
The study envisages a 15,000-tonne-per-day operation producing an average of 230,000 tonnes of copper concentrates annually with an average grade of 23.8% copper over the 12-year mine life, as well as 190,000 tonnes of zinc concentrates averaging 50% zinc per year over 10 years.
Overall copper and zinc recoveries are estimated to be 76.3% and 71.0%, respectively, though gold and silver recoveries are low and will only contribute about 4% to the net smelter return.
Life-of-mine production is pegged at 1.4 billion lbs. copper, 2.1 billion lbs. zinc, 171,000 oz. gold and 18 million oz. silver.
Plans call for a conventional open-pit operation to mine the volcanogenic massive sulphide deposit, which is covered by an average of 170 metres of overburden.
The mine plan is based on mineral reserves totalling 65 million tonnes grading 1.32% copper and 2.04% zinc, plus 0.53 gram gold and 32.1 grams silver per tonne. Included are 1.9 million tonnes in the proven category averaging 0.71% copper, 3.51% zinc, 0.94 gram gold and 44.8 grams silver; and 63.3 million tonnes of probable material running 1.34% copper, 2.01% zinc, 0.52 gram gold and 31.7 grams silver.
The report also identifies several massive sulphide targets in a 10-km radius around San Nicolas. Limited drilling on three of the prospects cut narrow intersections of massive-to-semi-massive sulphides and stringers, as well as strong hydrothermal alteration.
Capital costs are pegged at US$245.6 million, including a contingency of $26.8 million. A 3-km access road is needed to link the project site with an existing paved highway, and a 30-km-long power line is required to connect the site to an existing power grid.
Life-of-mine operating costs total US$8.53 per tonne milled, including mining costs of US$2.18 per tonne, milling costs of US$5.99 per tonne, and management and administration costs of US36 per tonne.
Sensitivity analysis demonstrates that the project is most sensitive to changes in metal prices and freight costs.
Teck Cominco currently holds a 79% interest in the project, with the remainder held by
During the third quarter of 2001, San Nicolas topped the list of Teck Cominco’s non-operating properties that were written down to the tune of $169 million ($122 million after tax).
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