Crazy Horse Resources is proceeding with a bankable feasibility study at its Taysan Copper-Gold Porphyry Project after receiving positive results from a preliminary economic assessment.
This shows a net present value (NPV) for Taysan of US$734 million at 10% (discount after tax) using a price of US$3 per pound of copper. At this price it also shows a production forecast of 22.7% internal rate of return.
The assessment is part of a soon to be completed independent scoping study, which indicates the project has an NPV of US$783 million when using prices of US$3 per pound for copper, US$1000 and ounce or gold, US$28 an ounce for silver and US$60 per tonnes of magnetite.
Taysan is estimated to produce 3.1 billion pounds of copper, 1.5 million ounces of gold, 7.4 million ounces of silver and 18.5 million tonnes of magnetite over a 24 year mine life.
Annual average production for years 1-4 is estimated at 173 million pounds of copper and 79,400 ounces of gold. Average annual production over the life of mine is 129 million pounds of copper, 62,000 ounces of gold, 308,000 ounces of silver and 807,000 tonnes of magnetite.
The inferred resource estimate used for the economic analysis was 944 million tonnes @ 0.23% copper and 0.11 grams/tonne gold for 4720 million pounds of copper and 3.4 million ounces of gold.
The inferred estimate will form the basis for a N143-101 compliant resource report for release shortly. It is based on an initial 10-hole confirmatory drill program completed between October and December 2010 to confirm the tenor of historic drilling on the project.
A capital cost estimate of US$1.04 billion is higher than the originally estimated US$914 million due to the addition of a magnetite plant, additional mining fleet, aggressive pre-strip plan and a general increase in cost of materials.
The company has approved the next stage of the feasibility study on that is estimated to take up to 18 months to complete. Five diamond drill rigs continue in-fill drilling of the resource.
Crazy Horse's president Johan Raadsma says, “We remain bullish on the copper price and these positive results clearly show the tremendous economic upside potential of the Taysan copper-gold-silver project. The addition of magnetite provides for further benefits and we will study the benefits of in-country beneficiation during the feasibility stage.”
The project is in southern Luzon in a well-developed mining province and 20km east of the provincial capital and deep-water commercial port of Batangas City.