REDBANK ADVANCES TOWARD 2010 PRODUCTION
Redbank Copper Limited (ASX: RCP) has today released its Development Study setting out the Management’s basis for the planning and development for its high grade Redbank copper project in the Northern Territory to commence production in the second half of this year.
Highlights of the Development Study include:
o Increased processing and production forecast:
§ Copper Cathode: 2,500tpa (99.9% copper metal)
§ Copper Concentrate: 20,000tpa (27.5% copper), expanding to 30,000tpa
o Average operating costs of US$1.40/lb of contained copper
o Project revenue of $539m
o Start up capital for cathode production of $17.25m
o Total project capital cost of $54.8m
o Net cash flows over 10 years of $177m (after capital, before interest and tax)
o NPV of cashflows $93m with an Internal Rate of Return of 68%
The Development Study outlines an increase in planned copper production with capacity for copper cathode output lifted from 2,100 tonnes to 2,500 tonnes per year.
The Study has been developed with a copper price of US$3.20/lb, exchange rate of 90c and is based on internal management’s assessment of production and processing plans, copper recoveries, operating and capital costs as set out in Attachments 6, 7, 8, 9 and 10 of the Study.
Redbank has engaged Calder Project Services to design and construct the Solvent Extraction-Electro Winning (SX-EW) plant for cathode production, with construction set to commence on site in the first half 2010, after the wet season.
The Company has also accelerated the proposed ramp-up of its copper sulphide production stream. The initial rate is 20,000tpa of copper concentrate for the first year (2012) from 300,000tpa of sulphide ore, increasing to 30,000tpa from 500,000tpa sulphide ore.
Redbank Managing Director Bruce Morrin said the Development Study was a further refinement of the comprehensive Mine Study released in September last year.
“In the past six months we have moved forward with the project with a successful exploration program and resource upgrade, finalizing plans for the SX-EW plant, appointment of Project Managers and submission of our Environmental Impact Statements”, Mr Morrin said.
The Study incorporates Redbank’s increased copper resource and grade position announced in December, and includes a reduction in forecast capital costs as the Company moves toward commencement of copper production in mid 2010. It requires additional material amounting to 1.75 million tonnes of sulphide mineralisation and 1.35 million tonnes of oxide mineralisation to provide a ten year life.
These quantities represent an equivalent of about two to three additional breccia pipes containing resources similar to those already discovered at Redbank. Exploration in 2009 has discovered new resources together with four new breccias pipes and these will be followed up with an exploration program in 2010.
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