Productora- Chile’s next Coastal Copper Mine in the Making
Location & Ownership
The Productora Project is located on the coastal range in Region III Chile, at low altitude (~800m elevation), just 17 kilometres south of the regional township of Vallenar. The Project enjoys the unique advantage of being surrounded by existing infrastructure, including a power substation, Port facility, Pan-American Highway, railway network, and aerodrome, among other facilities.
The Productora Project is 100% owned by a Chilean incorporated company named Sociedad Minera El Aguila SpA (SMEA). SMEA is a Joint Venture company, 80% owned by Sociedad Minera El Corazón Limitada (a 100% subsidiary of Hot Chili Limited), and 20% owned by CMP Productora (a 100% subsidiary of Compañía Minera del Pacífico S.A (CMP).
The Joint Venture agreement provides access to key infrastructure as well as securing an experienced major Chilean partner with substantial operational, financial and development capability to jointly develop Productora towards production. CMP also have an option to increase its stake in Productora to 50.1% following completion of the Definitive Feasibility Study (DFS).
Productora Tier 1 Copper Porphyry Potential
For the full "Hunting Giants" Productora copper porphyry presentation please click on the link Hunting Giants Presentation
The following describes some of the evidence for the porphyry potential at Productora and also compares the Productora footprint to some other Tier 1 porphyry camps:
Tier 1 Porphyry Copper Deposit- The Evidence Revealed
- Right location for Tier 1 copper deposit (130km spacing)
- Discovery of Alice porphyry copper resource adjacent to planned central pit
- Large scale surface alteration and geophysical porphyry footprint (several large scale IP chargeability targets detected near-surface)
- Dating evidence that Productora’s 1.5Mt copper and 1Moz gold resource originates from and is part of a much larger porphyry copper deposit setting
Giant Copper Camp Settings in Chile
- Chilean Tier 1 - +5Mt copper metal endowment
- +5Mt Chilean Copper Camps generally form in clusters at regular 130km spacing
- Typically at the intersection of regional transfer faults and the Atacama (AFZ) and Western Fisher Fault Zones (WFZ)
- Productora sits within a Giant Copper Camp setting- ideal location to discover a “missing” Tier 1 copper deposit
Living Next Door to Alice
- Major 6km x 4km porphyry lithocap (advanced argillic alteration) lying immediately next to Productora Main Zone
- Sulphur endowment can be used as a proxy for copper. Sulphur volumes from drilling and surface soil analysis indicates potential Tier 1 copper endowment
- Alice porphyry copper discovery reveals small window into larger potential
Productora has Potential to Get Much Bigger!
- 3D modelling of near-surface IP porphyry targets indicate Productora has potential to grow its current resource base by several multiples
Basis & Team
The Productora PFS was based on the following key parameters:
- Productora Mineral Resource update of:
- Higher Grade Mineral Resource- 236.6Mt@ 0.48% Cu, 0.10g/t Au, 135ppm Mo for contained metal of 1.13Mt copper, 0.73Moz gold and 32kt molybdenum (reported at or above 0.25% Cu)
- Low Grade Mineral Resource- 218.0Mt@ 0.16% Cu, 0.04g/t Au, 58ppm Mo for contained metal of 0.34Mt copper, 0.25Moz gold and 13kt molybdenum (reported at or above 0.1% Cu and below 0.25 % Cu)
- Productora Ore Reserve update of 166.9Mt@ 0.43% Cu, 0.09g/t Au, 138ppm Mo for contained metal of 0.72Mt copper, 0.47Moz gold and 23kt molybdenum (based upon an optimised pit shell using price assumptions of Cu US$3.00/lb, Au US$1200oz, Mo US$14.00/lb)
- Open‐pit earthmoving mining operations conducted by contractors
- Infrastructure to produce copper-gold concentrate, molybdenum concentrate and copper cathode
- Processing plant and infrastructure built under a combination of Engineering, Procurement, Construction and Management (EPCM) and EPC contracts and managed by Hot Chili Owner’s Team (Owner’s Team)
Key project physical metrics are tabled below.
Key Outcomes of the Pre-feasibility Study
Key PFS Outcomes for the Project are included in the below table. The estimated Ore Reserve, which comprises 99% of the production target, has been prepared by competent persons in accordance with JORC Code 2012.
C1 = Paid metal, adjusted to exclude deferred waste stripping, includes gold and molybdenum credits
C2 = C1 plus depreciation
C3 = C2 plus interest and indirect costs
Significant increases in the Productora Mineral Resource inventory were achieved as part of the PFS, with the total resource increasing by 43% contained copper, 45% contained gold and 55% contained molybdenum metal.
The Mineral Resource estimate (inclusive of Ore Reserves) for the Productora project is presented in the below tables.
Productora Project Higher Grade Mineral Resource, March 2016
Reported at or above 0.25 % Cu. Figures in the above table are rounded, reported to two significant figures, and classified in accordance with the Australian JORC Code 2012 guidance on Mineral Resource and Ore Reserve reporting. Metal rounded to nearest thousand, or if less, to the nearest hundred.
Productora Project Low Grade Resource, March 2016
Reported at or above 0.1% Cu and below 0.25 % Cu. Figures in the above table are rounded, reported to two significant figures, and classified in accordance with the Australian JORC Code 2012 guidance on Mineral Resource and Ore Reserve reporting. Metal rounded to nearest thousand, or if less, to the nearest hundred. Metal rounded to nearest thousand, or if less, to the nearest hundred.
It is proposed that a mining contractor will conduct the mining activities at Productora with technical and managerial direction provided by Hot Chili. The mine is planned to be an open pit operation incorporating drill and blast, load and haul, and ore and waste management.
Final pit designs were based on a Lerchs-Grossmann WhittleTM shell using a copper price of US$3.00/lb, gold price of US$1,200/oz and molybdenum price of US$14/lb.
An overall strip ratio (including pre-strip) of 2.7:1 (waste:ore) has been achieved, with total mining rate peaking at 89 Mtpa in Year 4.
Significant growth at the Project has been achieved through the PFS, with contained metal now standing at 0.72Mt copper and 0.47Moz of gold- nearly double that of the previously announced Productora Ore Reserve.
The Probable Ore Reserve estimate is based on Mineral Resource classified as Indicated, No Inferred material has been used for Ore Reserve estimation.
Productora Project Ore Reserve Statement, March 2016
Note 1: Figures in the above table are rounded, reported to two significant figures, and classified in accordance with the Australian JORC Code 2012 guidance on Mineral Resource and Ore Reserve reporting. Note 2: Price assumptions: Cu price - US$3.00/lb; Au price US$1200/oz; Mo price US$14.00/lb. Note 3: Mill average recovery for fresh Cu - 89%, Au - 52%, Mo - 53%. Mill average recovery for transitional; Cu 70%, Au - 50%, Mo - 46%. Heap Leach average recovery for oxide; Cu - 54%. Note 4: Payability factors for metal contained in concentrate: Cu - 96%; Au - 90%; Mo - 98%. Payability factor for Cu cathode - 100%.
Ore Processing & Production
The sulphide treatment plant is designed to process 14 Mtpa of sulphide ore via a conventional bulk flotation copper sulphide concentrator producing a copper concentrate grade of 25%, and a molybdenum concentrate grading 50% molybdenum. Gold will report to the copper concentrate.
The Project will also process up to 3.3 Mtpa of oxide ore via a conventional crushing/ agglomeration/ heap leach circuit coupled with a Solvent Exchange – Electro Winning (SX-EW) plant producing up to 10,000 tpa of copper cathode.
A summary of sulphide and oxide ore processed is outlined in the below tables.
Productora sulphide ore summary
Productora oxide ore summary
Infrastructure & Implementation
The Productora Project has the benefit of being able to utilise existing infrastructure and services in the Vallenar/ Huasco region. The township of Vallenar (17 km from the mine site) will provide accommodation and services to support the Project. Other general infrastructure around Vallenar/ Huasco includes:
Environment & Sustainability
The Environmental Impact Assessment (EIA) of the Productora Project will be submitted for approval using the Environmental Impact Assessment System (EIA System) that is currently being applied in Chile.
The environmental baselines describe the condition of relevant environmental components that may be affected by the project. Baselines for the project included the following activities:
It is estimated that there is an additional 6 months’ work before EIA completion. Importantly all seasonal baseline studies have been completed, so the remaining work is not season (ie. time) dependent.
Pre-Production Capital Cost (CAPEX)
Capital cost estimate for the Productora Project, developed using US dollars (Q4 2015), accuracy level +/- 25%
Operating costs have been estimated for mining, sulphide and oxide plant processing, administration, concentrate transport and seawater supply areas. All costs are presented in US dollars and are based on prices for the fourth quarter of 2015.
Financial analysis utilised a power cost of $0.065/kWh and a diesel cost of $0.50/litre in line with independent recommendations and current long-term forecasts, respectively.
Pit optimisation, cut-off grade definition and associated Ore Reserve estimate utilised a power cost of $0.095/kWh and a diesel cost of $0.64/litre to ensure a more robust definition of ore and waste.
C1 cash costs have been calculated pro rata (no credits), with Productora being competitive across individual cost areas and in total cost, as compared to world copper producers.
Cash costs for the Productora Project (Normal- incl credits and Pro-Rata- no credits)
Key financial outcomes
PFS financial analysis, base case (US$3.00/lb), (US$3.25/lb) and Wood Mackenzie 2020-2030 long-term case (US$3.50/lb)