Toromocho study predicts major output for Peru Copper

Vancouver — Results from the Toromocho prefeasibility study indicate impressive economics for Peru Copper‘s (PCR-T, CUP-X) proposed copper-molybdenum operation in central Peru.

The study estimates average annual output of 601 million lbs. (272,788 tonnes) copper and 11.9 million lbs. (5,387 tonnes) molybdenum over a 21-year mine life. A net present value of US$814 million is calculated along with an after-tax internal rate of return of 16%.

Project economics were estimated using metal values of US$1.10 per lb. for copper, US$10 per lb. for molybdenum, and US$6.50 per oz. for silver, as well as a discount rate of 8%.

Pretax operating costs are estimated at a relatively low US51.4 per lb. of copper, rising to US68.3 per lb. when worker’s participation, government royalties and income taxes are factored in. Anticipated capital costs for the large-scale, open-pit project come in at a whopping US$1.5 billion.

Toromocho hosts a total measured and indicated resource of 1.8 billion tonnes grading 0.47% copper, 0.016% molybdenum and 6.8 grams silver per tonne (0.68% copper equivalent). Within the resource, a central core of 967 million tonnes 0.6% copper, 0.023% molybdenum and 8.1 grams silver (0.88% copper equivalent) was reviewed using a 0.6% copper-equivalent cutoff grade.

Planned open-pit mining of the large porphyry deposit will benefit from favourable orebody geometry, resulting in a very low waste-to-ore stripping ratio of 0.57:1. The project also enjoys good access to infrastructure; it is adjacent to a major highway and near a railway that runs between Doe Run’s La Oroya smelter complex and Lima.

Peru Copper is examining all options in its planned development of Toromocho, including partnering with a major company.

Shares of Peru Copper rallied on the production estimate news, gaining as much as 18% or 69 to around $4.50 on strong volume. The company posts a $412-million market capitalization based on its 98.2 million shares outstanding. An additional 19.6 million warrants, exercisable for common shares at US$2.00 apiece, expire in mid-March.