Trilogy Metals Outlines $394 Million After Tax NPV For Bornite Copper Project
Trilogy Metals (TSX: TMQ) this morning released the results of a much-anticipated preliminary economic assessment that was conducted on its Bornite copper project, a joint venture equally owned by South32.
The estimate outlines an underground mining operation capable of processing 6,000 tonnes per day, with the operation to repurpose the infrastructure from the Arctic project for use with the Bornite project, once resources have been depleted from Arctic. That study currently calls for a mine life of 13 years, which on a combined basis with Bornite, would potentially expand mine activity under the joint venture to over 30 years.
The PEA has outlined a net present value of $394.0 million on an after-tax basis for the project, using an 8% discount, and a payback period of 4.4 years. The project contains an after-tax IRR of 20.0%, which is based on the recovery of 1.9 billion pounds of copper over a 17 year mine life. The estimate uses a metal price of $4.20 per pound copper.
Annual production at Bornite is estimated at 109,061 pounds, with operating costs amounting to $98.91 per tonne, with cash costs estimated at $2.76 per pound. All in sustaining costs per pound are pegged at $3.35.
Initial capital expenditures are estimated at $503.8 million, while sustaining capital is pegged at $363.1 million, for total Capex of $866.9 million. Mine closure and reclamation costs are pegged at $81.2 million.
“Although we believe that further exploration along the 100km volcanogenic massive sulphide belt will extend the mine life of the Arctic Project beyond the 13 years established by the current Arctic Feasibility Study, the Bornite PEA study shows it is possible, with existing known resources, to continue mine activity at the UKMP beyond 30 years,” commented Tony Giardini, CEO of Trilogy.
Trilogy Metals last traded at $1.57 on the TSX.
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