UNIVERSAL Resources’ Roseby copper project in Queensland will return a life of mine operating cash flow of $970 million per year, up 96% from the company’s previous estimates.
The company said on Friday its definitive feasibility study (DFS) into the project showed robust economics for the potential mine, even at the base case level.
The results from the DFS show a “marked” increased in the net present value (NPV) estimates for the project compared to Universal’s preliminary studies.
Roseby’s NPV is now estimated at $282 million, up from $96 million in the preliminary study, while the project’s internal rate of return is estimated at 32%.
Universal’s chairman Peter Ingram said the result of the DFS was impressive.
“The study has shown that Roseby stacks up financially as a project that will deliver robust returns to Universal, and future finance partners,” he said.
“High future copper price market expectations have played an important role in delivering the value increase. We have also had some success in reducing the expected power consumption at the project, with a direct impact on the operating surplus.”
The project’s capital costs increased by 10% to $195.5 million, which Universal said was due to an increase in civil and earthworks expenses.
Universal intends to mine 255,000 tonnes of copper from Roseby from the second half of 2009, with throughput pegged at 4 million tonnes per annum.
The project has an expected mine life of 12.5 years with annual average copper production of 20,754t, along with 4779oz of gold.
The company has indicated it would like to increase throughput to 8Mtpa by 2012, which could cost around $100 million, but this increase has not been included in the DFS.
Shares in Universal gained 0.2c to 7.5c on Friday but fell back to 7.4c this morning.
URL Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
