AN independent feasibility study into RTG Mining’s Mabilo Copper-Gold Project in southeast Luzon has shown that the project will be profitable, even at the current lower commodity prices. It shows the project to be high grade and low cost, delivering an internal rate of return (IRR) of 33.45% and a net present value of $223 million.
RTG says the high-quality resource presents an excellent near-term development opportunity that is financially robust and attractive to potential debt providers. It also says that with additional drilling, the resource is expected to grow further, which will enhance the already-strong financials.
Project implementation is planned in two stages with the first intended to minimise initial capital requirements through a direct shipping ore (DSO) operation of an exceptionally high grade, near surface oxide portion of the resource. Utilisation of existing infrastructure within easy transport of the project means the more capital intensive components of primary production can be deferred.
Early cash flow should then also minimise any possible equity dilution in financing the stage 2 primary production plant. This stage involves processing or primary ore through a purpose-built plant on site. This plant would be built in parallel with the oxide mining phase and the stage 2 permitting process.
The study shows both stages are financially robust, with the DSO operation enabling start-up within four to five months of finalising DSO operating permits.
Based on a stage 1 base case of 1.35 million tonnes, the DSO operation would require capital investment of $17.4 million and the IRR of 33.45% would increase to 43.6% with only a 10% lift in commodity prices. The DSO operation is expected to produce 25,000 tonnes of copper and 39,000 ounces of gold.
The stage 2 processing plant would require a further capital investment of $161.3 million and would produce 18,300 tonnes of copper, 67,000 ounces of gold and 347,000 tonnes of iron.
RTG’s CEO Justine Magee said, “Since investing in Mabilo in June 2014, the company has added significant value through rapid and successful exploration to delineate a substantial resource, and again in maintaining this accelerated pace through to a full feasibility study in less than 15 months from the maiden resource.”
Mabilo has a probable mineral reserve of 7.792 million tonnes @ 2.04 grams/tonne (g/t) gold, 1.95% copper, 8.79 g/t silver and 45.5% iron. It has 1.3 million ounces of gold equivalent @ 5.26 g/t and 316,000 tonnes of copper equivalent, both before recoveries.