China smelter group agrees to lower Q1 copper charges
The charges tend to fall when ore supply declines and rise when more concentrate is available.
Cordoba Minerals’ (TSXV: CDB) Alacran project in Colombia has officially entered its development stage following the completion of its feasibility study, outlining an open-pit copper operation with an initial cost of $420.4 million that will take approximately two years to construct.
The project is anticipated to hold an after-tax net present value of $360 million (at an 8% discount) with an internal rate of return of 23.8% and a payback period of three years, the study showed. The project life is estimated at 14.2 years.
The FS reinforce a majority of metrics and economic figures presented in the project’s 2022 pre-feasibility study, which showed an NPV of $415 million and IRR of 25.40%, with an almost identical payback period.
Total metal production over that period is calculated at 797.2 million lb. of copper, plus 550,000 oz. of gold and 5.35 million oz. of silver. These are mined from total probable mineral reserves of 97.9 million tonnes grading 0.41% copper, 0.23 g/t gold and 2.63 g/t silver.
The information from the FS, as noted by Cordoba, forms the basis for the comprehensive environmental impact assessment (EIA), which is required by Colombian law for the project to proceed. The company said it filed its EIA application with the relevant government authority on Dec. 11, 2023.
As part of the agreement signed with joint-development partner JCHX Mining Management, Cordoba is expected to receive the second installment of $40 million in the coming days upon approval of the FS report.
China-based JCHX entered the Alacran project in late 2022 by acquiring a 50% interest for total consideration of $100 million, to be paid in three installments. The third and final installment of $20 million will be paid once approval of the EIA is obtained.
“The filing of the EIA in conjunction with the completion of the feasibility study for Alacran officially commences the next chapter for Cordoba as we transition from a pure exploration company to a development enterprise,” CEO Sarah Armstrong-Montoya stated in a press release.
Located 390 km northwest of Bogotá and 160 km north of Medellín, the Alacran project is positioned to be the largest copper mine in Colombia in the near future, and has already been declared a “Project of National Interest” by the government. It forms part of the larger San Matias land package consisting of 22 mining concessions.
Following the latest project milestone, it is expected that detailed mine engineering and design work will begin shortly, with early engineering targeted for completion late in Q2 2024. The feasibility level of engineering work, which is approximately 30-40% of the total engineering tasks required for the project, had already been carried out to support the capex calculations in the FS.
As previously agreed, JCHX has the right of first offer to bid on the engineering, procurement and construction and detailed design agreement contracts.
“Given our partner JCHX’s deep experience in mine construction, development, and contract mining, we are very confident that the company will be able to swiftly compose the most optimal plan and assemble the best possible team to promptly bring the Alacran project online,” Armstrong-Montoya added.
Shares of Cordoba Minerals surged 11.7% by 2:15 p.m. ET following the FS announcement. The junior miner has a market capitalization of C$30 million.
