Monterrico looking positive on Rio Blanco

Monterrico Metals has announced an operational update on the Bankable Feasibility Study (BFS) on the Rio Blanco copper-moly project in northern Peru. A mine production plan for the first 20 years of the project has been completed on the basis of mining 500 Mt of ore at 25 Mt/y with an overall waste:ore ratio after pre-strip of 0.73:1. This initial schedule extracts 40% of the total resource of 1,260 Mt at the 0.4% Cu cut-off grade.

The average production rate for the first three years is 25 Mt/y of ore at a Cu grade of 0.93% and a recovery of 90% to produce an average of 210,000 t/y of copper plus around 2,450 t/y of molybdenum. Additional mine planning studies continue to demonstrate that the greater resource base at Rio Blanco would support a planned increase to 50 Mt after the third year of production.

Mine planning studies continue to demonstrate that it is possible to mine higher grade ore early in the mine life. The average run of mine grades for years 1 – 5 and over 20 years are estimated as follows:

  Year 1 to 5 Year 1 to 20
Tonnes mined 125 million tonnes 500 million tonnes
Average copper grade 0.87% 0.63%
Contained copper 1.1 million tonnes 3.12 million tonnes
Average Molybdenum grade 200ppm 215ppm
Contained Molybdenum 25,991 tonnes 103,151 tonnes

Discussions are underway with mining contractors to determine the cost benefits of contract mining versus outright purchase of mining equipment. The company will continue to evaluate the capital cost versus operating cost trade-off of contracting outside groups to build, own and operate non-core elements of the Project such as the road, power line and port facility and the use of contract mining and support services. Initial studies indicate that it would be possible to reduce initial capital cost of the project whilst maintaining competitive operating costs.

The location for the process plant has been defined, close to the open pit, at a relatively low altitude. This provides operational cost benefits compared to other sites examined during trade-off studies. The site also has sufficient area for the addition of a second milling circuit and flotation circuit for the future upgrade to 50 Mt/y.

Monterrico has completed trade-off studies to determine the optimal location of the copper – molybdenum separation plant. These studies concluded that there are both capital and operating cost benefits locating the plant adjacent to the port facility rather than at the mine site. Ongoing work is now focussing on final process plant layouts and equipment design.

A number of studies have been completed which will locate the tailings dam in the Atlantic drainage of the Cordillera and which are close to the process plant site. Conceptual designs have been completed on the preferred sites and cost estimates completed to a conceptual level. Ongoing work will select one preferred tailings dam location and complete design to bankable level.

A concentrate pipeline will transport copper and molybdenum concentrate from the processing plant located next to the mine to the port site on the Pacific cost. The pipeline will be some 300 km in length and has social, environmental and operating cost benefits over the alternative of trucking concentrates by road. The pipeline was designed from the outset to accommodate a scale-up production scenario. The feasibility study and costs for the pipeline have been completed. The pipeline route has been defined and the initial environmental, archaeological and geotechnical evaluation has been completed. Ongoing work is now designed to narrow the pipeline corridor prior to land purchase and completion of final cost estimates to BFS level.

The feasibility study for the port facility has been completed. Final port selection provides for access to deep water close to shore allowing a wider selection of vessels to load copper concentrates. Krupp Canada has been retained to complete the port facility design and cost estimation to BFS standards.

All environmental and social scoping studies as part of the first phase of the Environmental Impact Assessment have been completed. Baseline studies are underway and are on schedule for completion as planned. Studies have been completed to determine the best use of water produced in the filtration of the concentrates. These indicate that evapotranspiration by use of forestry is the preferred route. Monterrico is evaluating the ideal trees to be planted in these zones to maximise value added to the project.

The BFS is currently ahead of schedule and within projected budget cost. Work on the technical components of the BFS will focus on more detailed design and costing to produce a development plan and capital and operating cost estimate to BFS standard of +/- 15%.