Vancouver — Inca Pacific Resources (IP-V) has inked a deal to purchase Anaconda Peru’s 51% interest in the Magistral copper-molybdenum project in Peru, for US$2.09 million.
The deal is still subject to regulatory approval, but is expected to close by the end of February. An economic evaluation performed by Anaconda Peru envisaged a mining operation producing 15,000 tonnes-per-day with a mine life of 15 years . The estimated the capital cost was pegged at US$131 million. It was estimated that Magistral could crank out 45,000 tonnes of copper, 2,000 tonnes of molybdenum and 500,000 ounces of silver per year.
“Inca Pacific is pleased to be in position to own 100% of Magistral and to be ready, willing and able to advance this excellent project to the bankable feasibility stage,” commented Anthony Floyd, President and CEO of Inca Pacific.
The net present value of the project based on before-tax evaluation with a 10% discount rate was set at $150 million. This was based on the following metal prices; copper US$1.00 per lb., molybdenum US$5.00 per lb., and silver US$5.50 per ounce.
The total mineral resources are estimated at 105 million tonnes averaging 0.74% copper, 0.052% molybdenum and 3.90 grams silver per tonne, using a copper cut-off grade of 0.50%.
Interpretations of geological, geochemical and drill data collected to date, suggest that the skarn and porphyry-style mineralization forms a coherent body which still remains open at depth.
Inca Pacific and Anaconda Peru have together spent over US$6 million on the property so far. Work included 24,640 metres of diamond drilling in 76 holes, geotechnical analyses, preliminary metallurgical testing, preliminary mine layout and open pit design, tailings studies, environmental base line studies, and socio-economic studies. In addition, scoping studies, some at the pre-feasibility level of detail, have been carried out by Anaconda Peru. These studies so far indicate that no significant technical obstacles hinder the development of a 15,000 tonne-per-day open pit mining operation at Magistral.
Late last year Inca Pacific completed a financing of 25 million Units at a price of $0.20 per Unit for gross proceeds of $5 million, including the full exercise of an over-allotment option.
The junior will used the net proceeds from the offering to purchase Anaconda Peru’s 51% interest in Magistral. The balance of the money will be used to accelerate exploration activities as for general working capital purposes. Upon exercise of the option which is expected to take place in January 2004, Inca Pacific will hold a 100% interest in the Magistral project.