Capstone Mining Corp. (TSX:CS) has released a number of positive updates on its Santo Domingo copper-iron-gold project in Region III, Chile.
President and CEO, Darren Pylot, said an update to the January 3, 2019 Feasibility Study-level Technical Report includes a higher level of CAPEX/OPEX certainty, additional key permits and the development in Section 24 of a Preliminary Economic Assessment with respect to cobalt production.
The 2020 PEA Opportunity also contains pricing updates to the economic model for the Base Case and a potential investment decision for producing battery-grade cobalt sulfate. Santo Domingo is owned 70% by Capstone and 30% by Korea Resources Corporation.
“The 2020 PEA Opportunity for cobalt adds significantly to the already robust copper-iron-gold Base Case. We are very excited as it aligns perfectly with our vision for growth in assets that can deliver strong cash flows in all price environments,” said Darren Pylot, President and CEO of Capstone.
Mr Pylot said the2020 PEA Opportunity outlines potential for a copper-iron-gold mine with battery-grade cobalt sulfate production, resulting in a net present value at an 8% discount rate (NPV8%) of US$1.66 billion after tax.
Incremental construction costs for a cobalt refining complex would be US$0.67 billion, for a combined US$2.18 billion, timed to begin two years after construction begins for the copper-iron-gold plant.
The project would produce at an average of 10.4 million pounds of cobalt per annum in the form of 22,600 tonnes per annum (pa) battery-grade cobalt sulfate, at incremental operating costs of US$3.70 per pound of cobalt production costs and incremental C1 cash costs2 of -US$4.11 per pound of cobalt production (including by-product sulfuric acid produced in the cobalt operation).
“If Santo Domingo was in operation today, refined production of 4,700 tonnes of cobalt per year would make Capstone the fourth largest battery-grade cobalt producer outside of China, and the largest in the Americas,” Mr Pylot added.
“It would also be one of the lowest cost producers in the World. It is exciting to think about what this refining complex could do to open Chile’s vast potential in cobalt.
“For financial flexibility, we have structured the cobalt recovery option as a delayed investment decision, timed to begin approximately two years after construction begins on the copper-iron-gold concentrator. When a strategic partner is selected, we could look to advance cobalt production earlier.”