Los Andes Copper PFS puts $2.8bn NPV on Vizcachitas project

Vizcachitas project site looking south. Credit: Los Andes Copper

Los Andes Copper (TSXV: LA) has announced the results of a positive pre-feasibility study (PFS) for its 100% owned Vizcachitas project in Chile, highlighted by a $2.8 billion post-tax net present value using an 8% discount rate and an internal rate of return of 24%.

The economics are calculated using metals prices of $3.68/lb. for copper, $12.9/lb. for molybdenum and $21.79/oz. for silver.

Pre-production capital cost for the Vizcachitas project is pegged at $2.4 billion, with a construction period of 3.25 years. This is expected to be paid back 2.5 years from initial production.

The initial life of mine is 26 years, during which Vizcachitas is expected to produce 8.8 billion lb. copper, 273.3 million lb. molybdenum and 32.7 million oz. silver, with average annual copper production of approximately 183,000 tonnes for the first eight years.

The production is based on updated proven and probable reserves of 1.22 billion tonnes grading at 0.36% copper, 136 ppm molybdenum and 1.1 g/t silver, which equates to a copper-equivalent grade of 0.41%.

Santiago Montt, Los Andes Copper’s CEO, said the FPS results show that Vizcachitas is “clearly a Tier 1 asset that has the potential to join the ranks as one of the largest and most profitable copper mines in Chile.”

“The new mine design incorporates a number of optimizations including expanding access works, allowing for a faster ramp-up of production and minimizing uphill material movement and haulage distances,” Montt said in a news release. “This has reduced the OPEX and led to a shorter payback further strengthening the economics of the project.”

Located within the Andes Mountains in the province of San Felipe, approximately 150 km northeast of Santiago, the Vizcachitas project represents a world-class porphyry copper deposit and one of the largest of its kind not controlled by the majors in the Americas.

The project contains a measured resource of 2.6 billion lb. copper, 84 million lb. molybdenum and 11 million oz. silver, and an indicated resource of 10.4 billion lb. copper, 442 million lb. molybdenum and 43 million oz. silver, for a total M+I resource of 14.8 billion lb. copper-equivalent, representing a 16% increase over the previous estimate.

The inferred resource also increased by 130% over the 2019 preliminary economic assessment to 15.4 billion lb. copper-equivalent (13.7 billion lb. copper, 495 million lb. molybdenum, 55 million oz. silver).

According to Montt, the project is “economically robust with the potential for considerable upside through further drilling to upgrade this inferred resource to measured and indicated, thereby bringing them into the mine plan.”