The low cost, high return Productora copper project in Chile will benefit from seawater processing advantages, easy connection to grid power and nearby port capacity.
By Reuben Adams
RAPID development of a globally significant coastal copper project in Chile could mean first production as early as 2019 or 2020, according to aspiring miner Hot Chili.
Perth-based Hot Chili is behind the US$725 million Productora copper project, regarded as one of Latin America’s fastest post-discovery developed projects. More than US$90 million has been invested in Productora across the past five years, culminating in “robust” pre-feasibility outcomes, announced by the company in March.
Hot Chili aimed to deliver at least 66,000 tonnes of copper concentrate and 25,000 ounces of gold per annum across the first eight years of production. The coastal project would benefit from seawater processing advantages, easy connection to grid power and nearby port capacity.
The pre-feasibility study highlighted a revenue stream over life of mine of US$4.3 billion, a C1 cash cost of just US$1.47 per pound to deliver post-tax net present value (NPV) of US$220 million and a payback period from start of production of just under four years. Surrounding porphyry targets were expected to lead to additional scale and mine life.
Hot Chili managing director Christian Easterday told Paydirt 2016 Latin America Downunder conference attendees that a key focus continued to be de-risking Productora, which has an initial 10 year mine life and resources of 1.47 million tonnes of copper and 980,000oz of gold.
“Capital prudence is important in the work we still need to do to bring Productora into production in our forecast timelines,” he said. “The project is financially competitive against its global peers in the copper space and has substantial upside outside of the pre-feasibility study outcomes so there is an opportunity to see this project emerge still as an even larger scale undertaking.”
The mine will host a large open pit slightly longer than San Francisco’s 2km Golden Gate Bridge. Hot Chili and its Chilean resource partner CMP are evaluating whether to mine the deposit using surface infrastructure owned by CMP to reduce costs further and keep Productora in the lower half of the global cost curve.