Hot Chili (ASX:HCH) has today published a positive prefeasibility study and maiden ore reserve for its Costa Fuego copper-gold project in Chile, with the former showing robust production metrics over the expected 20-year mine life, with increased yield from both metals during that time.
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According to the PFS, Costa Fuega’s mine life will now be increased to 20 years, and average annual production has also jumped to 116,000 tonnes per annum (tpa) of copper equivalent, including 95,000 tonnes of copper and 48,000 ounces (oz) of gold during the primary production period of 14 years.
Financial metrics were also strong, showing a life of mine C1 cash cost of US$1.38 per pound and an all-in-sustaining cost of US$1.85/lb (both estimated net of by-product credits).
Over the life of Hot Chili’s mine, copper and gold production is being tipped to increase to 1.5 Mt Cu (3.31 Blb Cu) and 780,000 oz Au).
Revenue from the mine has been set at US$17.3 billion, with a total LOM-free cash flow of around US$3.86 billion – post-tax, after operating costs, capital costs, and royalties.
Operational risk for the project has also been lowered, says Hot Chili, by the project’s probable maiden ore reserve of 502 Mt at 0.37% Cu, 0.10 g/t Au, 0.49 g/t Ag and 97 ppm Mo (molybdenum).
“The study provides a strong basis for our final stage of development and places Costa Fuego within an elite grouping of copper developments globally,” Christian Easterday, the company’s managing director, declared.
“With both copper and gold prices at record highs, our PFS has demonstrated two of the most critical factors in assessing the likelihood of meaningful, near-term copper supply – top quartile production capacity and lowest quartile capital intensity.”
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Mr Easterday continued: “Importantly, exploration success at our recently confirmed La Verde Cu-Au porphyry discovery represents a highly prospective further growth opportunity for Hot Chili.”
HCH shares have jumped 0.71% after the news to trade at 70.5 cents.
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Caroline Smith
The Market Online, Australia
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