ST Augustine Gold and Copper is focusing on key de-risking activities at the King-king Copper Gold Project in Mindanao with a goal of moving the project to construction in 2015 and ultimately reaching production in 2018. After completing a preliminary feasibility study (PFS) in 2013, the main activities this year include securing permits and funding.
The King-king property at Pantukan in the Compostela Valley is one of the largest copper-gold proven and probable mineral reserves in the world. The proven mineral reserves are 99.1 million tonnes @ 0.349% total copper, 0.132% soluble copper and 0.514 grams/tonne gold. The probable mineral reserves are 518.8 million tonnes @ 0.290% total copper, 0.075% soluble copper, and 0.373 grams/tonne gold. The proven and probable mineral reserve consists of 4.1 billion pounds of contained copper and 7.8 million troy ounces of contained gold.
St Augustine’s CEO Andrew Russell says, “2013 was a year marked with significant milestones in the development of King-king.” The PFS contained robust results including after-tax NPV of US$1.8 billion, after-tax IRR of 24% and a capital payback period of 2.4 years driven by higher grades in the initial years of production.
He says the PFS also outlined of mine production of 3.16 billion pounds of copper and 5.43 million ounces of gold over a 25-year mine and process life.
The company also announced the restructuring of its joint venture with Nationwide Development Corp (NADECOR) which, it says, will streamline project ownership and help attract strategic partners.
St Augustine’s focus this year is to complete critical project development work that will support the start of construction in 2015. 2014 milestones include:
- Advance permitting, obtain approval of the Environmental Impact Statement and Declaration of Mining Project Feasibility and receive the Environmental Compliance Certificate;
- Secure land acquisitions;
- Structure project financing arrangement(s) through strategic advisors or engagement of major financial institution(s) in coordination with NADECOR;
- Completion of the joint venture restructuring and project structure as described in the Project Framework Agreement (PFA);
- Assist NADECOR with the steps necessary to transfer the Mineral Production Sharing Agreement (MPSA) into the joint project structure; and
- Advance critical project work related to development supporting the initiation of construction in 2015.
St Augustine continues to work with NADECOR to align stakeholder interests and move the project closer to construction, and then production. Trade-off and recovery studies are under way which management is optimistic will further improve project economics. Large scale project fundraising plans have been initiated, and management remains optimistic that project financing will be achieved.