Metminco (ASX: MNC) shares advanced on Monday after it revealed additional work on the scoping study at Los Calatos had considerably improved the economics of the copper project.
The company, which is trying to find a strategic partner for the huge project in Peru, said optimisation had indicated higher recoveries, improved production rates and lower upfront costs.
The pit optimisation work carried out by consultant RungePincockMinarco (RPM) confirmed the potential to increase the mining rate for the open pit and underground block cave operations to 75,000 tonnes per day (tpd) and 70,000 tpd respectively, it said.
The optimised scenario for the project, (the L3 model) now envisages average annual production rates of 100,100 tonnes per annum (tpa) of copper and 5,000tpa of molybdenum in concentrate over a mine life of 34 years.
This represents a 20% and 35% annual increase in copper and molybdenum production compared to the March scoping study.
Total tonnes mined rise by 24% to 811mln tonnes due to higher conversion ratios of the current mineral resource.
An increase in the life of mine of the open pit from seven to 14 years also delays the start of the underground operation and reduces initial capital costs by 12% to US$1.32bn.
Cash operating costs are now forecast at US$1.06 per pound including gold, silver and rhenium credits compared to US$1.15 in the March study.
William Howe, Metminco’s managing director, said "Following the completion of the scoping study on Los Calatos, the company has completed further optimisation work, which supports the opportunity to increase production rates for both the open pit and the underground mining operations.
“With the higher mineral resource conversion, improved production rates, and reduction in pre-production capital, the project economics improve considerably".
It's been a busy period for the South America focused explorer and its shares have surged ahead in recent weeks.
Today, the shares stood up 16.83% at 2.36p, but they have more than doubled in value since mid-July this year.
At the end of last month, Howe said the company was continuing to engage with potential strategic partners over Los Calatos’s development.
That came on the back of the development, which saw the company granted approval to expand the surface area of the deposit.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.