Vancouver – Soaring molybdenum prices have nudged Amerigo Resources (ARG-T) to add facilities to recover the metal at its Minera Valle Central (MVC) plant near Santiago, central Chile.
The company recovers copper from tailings at Codelco’s El Teniente, the largest underground mine in the world. MVC treats all fresh tailings from present production. Rights to the 213 million tonne Colihues abandoned tailings impoundment are also held.
Copper ore from El Teniente also contains molybdenum which remains in recoverable quantities in the tailings. A positive engineering report has prompted Amerigo to add a plant to extract the molybdenum.
Estimated annual production is 700,000 lbs. of molybdenum in the form MoS2 at an operating cost of about US$2 per pound. Current world price of molybdenum oxide is in the US$16 per pound range. The report used a 5-year average price of US$4.20 per pound in the economic analysis.
Capital expenditure of US$2.1 million is estimated along with a six month construction period. The molybdenum recovery operation will leverage existing, available equipment and infrastructure keeping start-up costs low.
Amerigo produces an average of 140 tonnes of concentrate daily containing 29.8% copper and 0.894% molybdenum.
El Teniente has been in operation since 1904 and has reported over 3 billion tonnes of reserves, sufficient for over 60 more years of operations at present rates. The mine produces about 90,000 tonnes of ore daily at an average grade of 1.16% copper. It is expected the operation will produce 1.14 billion tonnes of tailings over the next 25 years averaging 0.112% total copper. The abandoned Colihues tailings contains 213 million tonnes of 0.26% total copper.
Molybdenum prices have risen dramatically this year due to supply shortages and surging Chinese demand. The metal is used predominantly in the steel industry as a hardening alloy.
As of the latest figures, the company reports 62.8 million shares outstanding.