A REVISED bankable feasibility study (BFS) for Finders Resources’ Wetar Copper Project on Wetar Island has achieved all its objectives, including reducing project capital intensity, reducing the overall funding requirement and reducing construction time. The BFS has also increased total and maximum copper production and produced an earlier, stronger cash flow.
The crushing plant at Wetar awaiting commencement of stacking operations.
The revised BFS was based on an upgrade of the demonstration plant to 3000 tonnes/annum and the refurbishment and upgrade of the Whim Creek plant to an annual capacity of 25,000 tonnes, giving the project the capacity to annually produce 28,000 tonnes of copper cathode.
The results of the BFS valued the Wetar project at post tax US$273 million at a US$7000 per tonne copper price and 10% discount rate. Project IRR using these same criteria is 67%. At current copper prices, project EBITDA for the first full year of production would exceed $132 million – a payback period on capital costs of 1 year.
It outlines life-of-mine copper production of 155,000 tonnes over a planned 10.5 years production period and total capital costs are expected to be US$132.4 million (before contingency). Because of the greater level of detail in the revised BFS, Finders expects any contingency to be reduced. It estimates operating cash costs of US$0.88 per pound while the project is operating at efficient production levels.
The positive improvement to the BFS has allowed the company to proceed with the renewal of finance for the project and in December 2013 Finders received responses from seven banks interested in providing credit facilities. Finders expects these facilities will be materially larger than the US$138 million facilities previously approved on the basis of the original BFS. The increase reflects the improved economics of the project.
Last August Finders announced it would upgrade and restart the demonstration plant, which is to be upgraded from an annual 1825 tonnes of copper cathode to 3000 tonnes. The restart involves mining and stacking of 140,000 tonnes of ore from the Kali Kuning pit and leaching it to produce copper cathode while construction of the earthworks and main plant is completed.
Finders contracted established Indonesian contractor PT Madhani Talatah Nusantra to undertake mining and earthworks during the restart. The project has made significant advances and while the company is still working towards commissioning during the current quarter, both weather and supply disruptions have interfered with the work.
Also, a critical item of electrical equipment was damaged by third party contractors during shipment. The equipment is being repaired in Kupang where it was damaged. The commissioning will proceed and start‐up may commence at about 40% capacity phasing up to the 3000 tonne capacity as final repairs are carried out. Despite the delays, Finders still expects to produce copper from fresh ore stacked on the heap during the current quarter.