Norsemont Mining Inc. (TSX: NOM, BVL: NOM) today announced the filing on SEDAR of a Technical Report required under National Instrument 43-101 in respect of the Feasibility Study Optimization for the Company's Constancia copper-molybdenum-silver porphyry project in southern Peru.
The Technical Report was prepared by Ausenco Solutions Canada Inc. (Ausenco). Norsemont previously announced the results of the Constancia FSO in a news release dated January 28, 2011.
As presented in the January 28, 2011 news release, the main focus of the FSO was to evaluate the potential to increase mine throughput during the later years of the projected mine life to effectively achieve an average life of mine throughput of greater than 70,000 tonnes per day (tpd), which has now been concluded. The in-pit reserves have been increased by 34%, average annual concentrate production has increased by approximately 28%, the life of mine has increased by approximately 7%, and base case financials have increased the NPV approximately to $810m. A summary of the FSO financials is presented below.
Note: NPV is in USD quoted after taxes, royalties and profit sharing, and sunk costs.
Case 1 (Base Case): For NI-43-101 reporting purposes, Norsemont has elected to use the following long-term commodity price assumptions: $2.50 per pound (lb) copper (Cu), $14.5/lb molybdenum (Mo), $14.00 per ounce (oz) silver (Ag) and $1,000.00/oz gold (Au).
Case 2: $2.75/lb Cu,$14.50/lb Mo, $14.00/oz Ag and $1,000.00/oz Au.
Case 3: $4.00/lb Cu represents the 27 month Cu forward price. Other metals are based on recent metal prices of $16/lb Mo, $18/oz Ag and $1,200/oz Au.
The revised Mineral Reserve Estimate comparison between the 2009 DFS and the 2011 FSO is summarized below.
- Proven and Probable reserve totals for the FSO study are included within the Measured and Indicated resources quoted above. For purposes of the Feasibility Study, 107 million tonnes of low operating margin Measured and Indicated resources above the NSR cut-off grade scheduled for mining from within the ultimate pit have been treated as waste. This mineralisation may be re-classified to reserve in the future, subject to prevailing economic conditions.
- The Mineral Reserve for the FSO study is based on Net Smelter Return (NSR) cut-off since project revenue is derived from copper, molybdenum, silver and gold. For NSR evaluation, metal prices assumed were Cu $2.25/lb, Mo $14.50/lb, Ag $14/oz and Au $1,000/oz while average metal recovery to concentrates was Cu 89%, Mo 40%, Ag 80% to Cu concentrate and Au 60% to Cu concentrate.
"We are very pleased with the results of the FSO, which indicate robust project economics", Norsemont's President and COO Bob Baxter reported.
Qualified Person and Data Verification
The Feasibility Study Optimization and NI 43-101 Technical Report were prepared by an integrated engineering team led by Ausenco as the primary author of the Technical Report. The following Qualified Persons were involved in the development of the FSO and the Technical Report, and have reviewed and approved the contents of this news release:
- Overall management, process plant design and cost estimate preparation for the FSO was led by Greg Lane, MAusIMM, General Manager of Technical Solutions, Ausenco Minerals & Metals.
- Mining studies were completed and Mineral Reserves reported by Dino Pilotto of SRK Consulting, a Registered Professional Engineer, P.Eng. in Saskatoon and Alberta.
- Engineering design and costing of the tailings management facility, waste dump and surface water management infrastructure were the responsibility of Thomas Kerr, President of Knight Piesold and Co. (USA), a Registered Professional Engineer, P.Eng in British Columbia, Ontario and P.E. in California, Colorado and Alaska.
- Pit geotechnical design parameters were provided by Robert Cummings, Registered Professional Engineer in Arizona.
Source: Norsemont Mining Inc.