Los Andes Copper (TSXV: LA; US-OTCQX) is keen to restart drilling on the flagship Vizcachitas porphyry copper-molybdenum deposit in Chile whereas it really works in parallel to publish a pre-feasibility examine on the mission earlier than year-end.
“Common engineering work, infrastructure planning, plant design and environmental concerns are all on monitor with the plan to finish the (prefeasibility) within the fourth quarter,” CEO Michael Jones advised The Northern Miner.
“The profitable drilling accomplished in 2022 has been included into the useful resource mannequin, and alternatives to extend the potential mission mining fee are being assessed,” Jones stated in an interview.
Jones says the corporate is presently mobilizing drill groups after a July environmental courtroom choice reinstating the drilling allow with sure operational situations, together with a restricted drilling plan for the primary 12 months.
He underlined that the exploration and PFS workstreams might progress independently of one another, given a March courtroom decision asking the corporate to droop drilling in an order that offers with defending the Andean cat, a threatened species. The courtroom order associated to the affect on the habitat of the vizcachas, a small rabbit that’s a part of the meals chain for the Andean cat, the corporate stated on the time.
“Our drilling plan will enable the corporate to pursue its authentic program of illuminating and defining extensions of the mineralized physique, which stays open,” Jones stated. “Drilling is deliberate to renew quickly to increase the assets past these presently thought-about within the (prefeasibility).” Alluding to the deposit’s progress potential, he added that large-scale intercepts of as much as 1,000 metres of mineralization introduced this yr are nonetheless open within the deposit mannequin.
In the meantime, key engineering work being accomplished as a part of the prefeasibility examine embody figuring out and resolving main bottlenecks within the mine plan, together with rising manufacturing charges by way of enhanced open-pit growth and enhancing crushing and grinding of ore.
“The PEA has a 45-year lifetime of mine, so accelerating manufacturing would profit the mission,” stated Jones, referring to a preliminary financial examine accomplished in 2019.
Los Andes additionally examines methods to boost operations by making use of new applied sciences. The corporate is contemplating incorporating high-pressure grinding rolls and dry stacking of tailings into the mine design course of, for instance, which would scale back water and vitality use significantly. As well as, it lately entered a letter of intent for the procurement of desalinated water with plans so as to add to regional water infrastructure, benefitting the mission and the group.
Located about 120 km north of Santiago, the Minera Vizcachitas mission hosts measured and indicated assets of 1.3 billion tonnes grading 0.396% copper, 141.4 elements per million (ppm) molybdenum, and 1.05 ppm silver for contained steel of 11.2 billion lb. copper, 400 million lb. molybdenum and 43.4 million oz. silver.
Inferred assets add 788.2 million tonnes grading 0.33% copper, 127 ppm molybdenum, 0.88 ppm silver for contained steel of 5.8 billion lb. copper, 221 million lb. molybdenum and 22.3 million oz. silver.
The 2019 preliminary financial evaluation outlining a long-life open pit mine, forecasted a mean head grade of 0.53% copper-equivalent over the primary 5 years of operation.
At an 8% low cost fee, the mission would generate a post-tax internet current worth of US$2.7 billion and an inner fee of return of 26.7% utilizing copper costs of US$3.50 per pound.
The examine, which evaluated three instances with every day mill throughputs of 55,000 tonnes grading 0.52% copper,125 ppm molybdenum and 1.5 grams silver per tonne; 110,000 tonnes grading 0.47% copper, 129 ppm molybdenum and 1.3 grams silver per tonne; and 200,000 tonnes grading 0.44% copper, 113 ppm molybdenum and 1.2 grams per tonne silver, envisaged a capital value of about $1.3 billion to $2.8 billion.
The feasibility examine will search to increase on these situations.
The Vizcachitas property features a porphyry copper-molybdenum deposit that gives potential for a low strip, open pit operation in an space of low elevation with glorious infrastructure, together with water and energy in central Chile. The Vizcachitas deposit happens in the identical metallogenic belt as the massive copper-molybdenum porphyries Rio Blanco-Los Bronces, Los Pelambres-El Pachon and El Teniente.
The corporate’s mission lands are topic to internet smelter return royalties of two% on floor manufacturing and 1% on any underground manufacturing.
Exploration upside
In line with Los Andes, the Vizcachitas porphyry system is related to a fancy of hydrothermal breccias and porphyries inside Miocene volcanic rocks. 5 totally different drilling campaigns have been undertaken on the property from 1993 thus far.
A complete of 165 diamond drill holes have been drilled, totalling 52,256 metres. Jones explains that the drilling carried out in 2015 to 2017 confirmed the brand new geological fashions and confirmed the significance of the early diorite porphyry and hydrothermal breccias in controlling the higher-grade mineralization of the deposit.
The brand new geological mannequin additionally outlined a near-surface higher-grade supergene enriched mineralization outlining an space of 400 by 400 metres the place all of the drill holes have returned common supergene grades larger than 0.5% copper.
Among the many spotlight outcomes from this yr’s accomplished drilling program was gap CMV-12B, which intersected 861.2 metres of 0.39% copper-equivalent from 29.5 metres depth, together with 330.7 metres of 0.63% copper-equivalent from 560 metres depth. One other spotlight intercept in gap CM-001B hit 1,177 metres of 0.5% copper-equivalent from 180 metres depth.
“The drilling program outcomes, with the one-kilometre intercepts of copper, clearly level to Vizcachitas turning into the following important deposit in line for growth in a district which hosts three of the most important porphyry copper mines on the earth. We’re solely simply now beginning to see its full potential,” stated Jones, including the corporate continues to be on the lookout for the centre of mineralization on the property.
“Massive-scale, superior copper tasks like Vizcachitas are uncommon and are anticipated to be in excessive demand because the copper market heads in the direction of an anticipated important provide deficit within the years forward,” he stated. “Los Andes Copper’s 100% possession of Vizcachitas with no copper offtake entanglements can also be enticing to bigger copper producers within the area.”
Nonetheless, the manager laments that regardless of the present useful resource, the near-term worth catalysts, mission economics and the remaining useful resource upside, the corporate is buying and selling at solely about an x1 NAV a number of.
“It’s incomprehensible how copper juniors are usually not getting the love they deserve. By Goldman Sachs’ estimates, there’s a 5 to eight-million-tonne per yr copper provide hole opening up from 2025 onwards – within the case of a 150,000-tonne per yr mission like Vizcachitas, that’s 85 new mines simply to maintain up with baseline demand. All these new mines are realistically by no means going to occur,” says Jones.
The corporate’s Toronto-quoted fairness has come off a March excessive at $17.73 however continues to be up greater than 55% over the 12-month timeframe, giving it a market cap of $368.2 million.
