Newmont, Teck to invest $152m in Chilean copper-gold project

In 2015, Teck and Goldcorp (now Newmont) announced an agreement to combine their respective Relincho and La Fortuna (El Morro) projects into a single venture — NuevaUnión. (Image courtesy of Teck Resources.)

Newmont (NYSE: NEM, TSX: NGT) and Teck Resources (TSX:TCK.A & TCK.B) (NYSE:TCK) are injecting new life into their NuevaUnión 50-50 joint venture in Chile by investing $152 million into the project, located in the northern Atacama region.

In an evaluation request filed with Chile’s environmental evaluation service SEA this week, the companies said they plan to conduct two drilling campaigns this year at the La Fortuna copper-gold deposit, to reduce geological uncertainty.

The first drilling campaign will go on for about 15 months and is expected to provide geological information for the characterization of the deposit’s deep levels.

Their NuevaUnión 50-50 JV will conduct two drilling campaigns to reduce geological uncertainty at La Fortuna deposit

The second campaign, estimated to last 49 months, should allow the companies to lay the foundations for the development of a mining plan focused on La Fortuna’s deep levels, the document says.

NuevaUnión (meaning new union), symbolizes the merger of two projects the companies had in the region, Relincho and la Fortuna, which are 40km apart.

It’s expected to provide Newmont and Teck with a number of key benefits, including reduced environmental footprint, an optimized mine plan, enhanced community benefits and greater returns over either standalone project.

Overall, the new mine will mean lower costs and improved capital efficiency — before joining Relincho and La Fortuna, the estimated costs for each project were $3.9 billion and $4.5 billion respectively.

With total capex of $7.2 billion for NuevaUnión’s three phases and an estimated lifespan of 38 years, the mine is expected to have an annual production of 224,000 tonnes of copper, 269,000 ounces of gold and 1,700 tonnes of molybdenum, according to a pre-feasibility study from early 2018. 

Completion of NuevaUnión’s feasibility study, commenced in the third quarter of 2018, is expected before the end of March.

Earlier this week, juniors Metalla Royalty & Streaming (TSX-V: MTA) and BatteryOne acquired a 2% royalty on future gold and copper production respectively from a portion of the La Fortuna deposit and prospective exploration grounds on NuevaUnión.

Newmont and Teck’s project is said to be one of the world’s largest undeveloped copper-gold-molybdenum proposed mines.

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