Los Andes Copper (TSXV: LA; US-OTC: LSANF) has completed a positive prefeasibility study for its 100% owned Vizcachitas project in Chile, highlighted by a US$2.8-billion post-tax net present value using an 8% discount rate and an internal rate of return of 24%.
The economics were calculated using metals prices of US$3.68 per lb. for copper, US$12.9 per lb. for molybdenum and US$21.79 per oz. for silver.
Preproduction capital costs for Vizcachitas are pegged at US$2.4 billion, with a construction period of 3.3 years. This is expected to be paid back 2.5 years from initial production.
The initial life of mine is 26 years, during which Vizcachitas is expected to produce 8.8 billion lb. copper, 273.3 million lb. molybdenum and 32.7 million oz. silver, with average annual copper production of approximately 183,000 tonnes for the first eight years.
The production is based on updated proven and probable reserves of 1.2 billion tonnes grading 0.36% copper, 136 ppm molybdenum and 1.1 grams silver per tonne (o.41% copper equivalent).
Santiago Montt, Los Andes Copper’s CEO, said the study shows that Vizcachitas is “clearly a Tier 1 asset that has the potential to join the ranks as one of the largest and most profitable copper mines in Chile.”
“The new mine design incorporates a number of optimizations including expanding access works, allowing for a faster ramp-up of production and minimizing uphill material movement and haulage distances. This has reduced the OPEX and led to a shorter payback further strengthening the economics of the project,” he added.
Located within the Andes Mountains in the province of San Felipe, about 150 km northeast of Santiago, Vizcachitas represents a world-class porphyry copper deposit and one of the largest of its kind not controlled by the majors in the Americas.
Los Andes was ordered to halt exploration last March after an environmental court ruling related to the project’s potential effects on the habitat of the vizcachitas — a rodent that’s a food source for the threatened Andean cat. The company resumed its program in the fall, after a July court ruling that allowed drilling with some conditions and restrictions.
Los Andes reported a 16% rise in measured and indicated resources to 13 billion lb. copper, 526 million lb. molybdenum, 54 million oz. silver in 1.5 billion tonnes grading 0.383% copper, 155 ppm molybdenum, 1.1 grams silver per tonne (or 0.436% copper equivalent).
Inferred resources also increased by 130% since a 2019 preliminary economic assessment to 13.7 billion lb. copper, 495 million lb. molybdenum, 55 million oz. silver in 1.8 billion tonnes grading 0.342% copper, 123 ppm molybdenum, and 0.9 gram silver (0.384% copper equivalent).
Montt said the project is “economically robust with the potential for considerable upside” through further drilling to upgrade inferred resources and bring them into the mine plan.