Minera Alamos Inc. is pleased to announce that it is re-initiating the development of its Los Verdes copper-molybdenum project in Sonora, Mexico. Development plans for the project were detailed in the Company's Preliminary Economic Assessment issued January 12, 2012.
Recent work by Minera Alamos has identified the potential for a phased approach that would begin with an initial small-scale production operation followed by an expansion towards the full project scope. Internal estimates currently target project construction to be initiated in 2016.
Minera Alamos also reported today that it has retained IBK Capital Corp. as financial advisor to assist in the ongoing funding requirements of the project as well as the evaluation of additional opportunities currently contemplated by Minera Alamos management.
"Reducing the size of the initial build-out can minimize our capital requirement while reducing the project's risk with respect to copper price fluctuations," said Chris Frostad, President and CEO, Minera Alamos Inc. "The objective is to adjust the project development parameters to better suit current market conditions and accelerate the path to cash flow. Once we achieve stable production, we can move to expand the operation up to PEA levels."
Opportunities that have been identified for Phase 1 of the project development schedule include:
- A "starter pit" identified within the existing 43-101 compliant resource model for Los Verdes that contains average grades approaching 2.0% CuEq
- Considerably lower up front capital costs to construct a 400 to 500 tonne per day milling operation while allowing for subsequent expansion in Phase 2;
- The ability to utilize used processing equipment that was largely unavailable when the Project PEA was completed in 2012.
Based on this level of throughput and current copper prices, the reduction in upfront capital costs for construction should allow for project payback timelines to be reduced significantly from those outlined in the PEA. In addition, testing is currently underway to confirm the positive preliminary results achieved from rock sorting test work on samples from Los Verdes. If successful, the implementation of this additional step will significantly decrease the project milling costs by rejecting low-grade mineralization prior to final processing for copper/molybdenum recovery.
Minera Alamos will focus the remainder of 2015 on refining and optimizing the new mine plans, plant design, and the production of a final tailings containment plan which will be necessary prior to receiving the final project permits.