Positive study at Exall’s Santo Tomas

A new copper mine may be in the works for Exall Resources (TSE), following completion of a positive prefeasibility study on the Santo Tomas project in Mexico’s Sinaloa state.

The study — carried out by Bateman Engineering, Mintec and Mountain States R & D — envisions a 60,000-tonne-per-day operation that would produce, on an annual basis, 306 million lb. copper, 69,000 oz. gold and 2.3 million oz. silver.

The mining rate could eventually be increased to 120,000 tonnes per day, with financing potentially available through cash flow.

Exall President Stephen Roman told The Northern Miner that the company is considering two possibilities with regard to development. One is to form a joint venture with a senior company to complete a full feasibility study and develop a subsequent mining operation. “Another possibility would be to complete the feasibility study ourselves and then joint-venture the project,” Roman said.

Mining would be via open pit with initial production coming from the North Area, which is one of two deposits outlined. Minable reserves in the North Area, using a 0.2% copper cutoff, are calculated to be 428.8 million tonnes grading 0.368% copper, 0.057 grams gold and 1.87 grams silver per tonne. The stripping ratio is estimated at 1.4-to-1 and production costs (including smelting and refining charges) are projected to be US66 cents per lb. Additional reserves of 567.7 million tonnes grading 0.405% copper are present in the South Area deposit.

Test work has shown that more than 90% of the contained metals can be recovered by conventional milling. Concentrates are expected to contain 28% copper. High recoveries were also obtained using a bacterial vat leaching process known as BRISA. A solvent extraction-electrowinning circuit would follow this process.

The concentrate will be shipped via truck, rail or ship to other facilities for smelting and refining. Excess smelter capacity has been identified in the U.S., Mexico and several Asian countries.

Capital costs for a 60,000-tonne-per-day operation utilizing all new equipment are estimated at US$318 million. The payback period will be 6.6 years with a rate of return (ROI) estimated at 16%. These estimates are based on US$1 per lb. copper, US$380 per oz. gold and US$5 per oz. silver.