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.
Vancouver’s Los Andes Copper (TSXV: LA) has signed a $20 million royalty agreement with Ecora Resources. The royalty includes a 0.25% net smelter royalty (NSR) on sales from open pit operations and a 0.125% NSR on underground production.
The new agreements are in addition to existing NSRs of 2% for open pit production and 1% for underground output.
Los Andes is developing its 100% owned Vizcachitas copper-molybdenum project in Chile, 150 km north of Santiago. The prefeasibility study released in February 2023 demonstrated a 26-year open pit operation at 136,000 t/d.
With a copper price of $3.68/lb., the after-tax net present value at an 8% discount is $2.78 billion with an internal rate of return of 24%. The pre-production capex is $2.4 billion with a construction period of 3.25 years and a payback period of 2.5 years after production begins.
The all-in sustaining cost will be $2.23/lb. copper for the first eight years and $2.35/lb. copper over the life of the project.
The project has proven and probable reserves of 1.22 billion tonnes grading 0.36% copper, 136 ppm molybdenum, and 1.1 g/t silver or 0.41% copper equivalent (CuEq).
Measured and indicated resources, inclusive of reserves, total 1.54 billion tonnes grading 0.383% copper, 155 ppm molybdenum, and 1.1 g/t silver or 0.436% CuEq. There are also inferred resources of 1.82 billion tonnes grading 0.342% copper, 123 ppm moly, and 0.9 g/t silver or 0.384% CuEq.
