Just months after closing the deal on its Condestable copper-gold mine in Peru, Rio2 Limited has tabled a significant resource and economics upgrade that extends mine life and bolsters its economics.
The updated technical report has confirmed an extended 14-year mine life running through to 2039 and pins a powerful after-tax net present value of US$710 million (A$1.03 billion) to the project. The underground operation is now forecast to generate a whopping US$1.15 billion (A$1.66 billion) in after-tax free cash flow over its life.
The updated resource estimate for the project’s combined Raúl and Condestable areas now stands at a formidable 82.1 million tonnes in the measured and indicated category, grading 0.69 per cent copper, 0.13 grams per tonne (g/t) gold and 4.12g/t silver. Moving the minable metal content to a hefty 565,000 tonnes of copper, 355,000 ounces of gold and 10.87 million ounces of silver.
However, the real blue sky might be hiding in the inferred category, which also saw a considerable bump to 22.2 million tonnes at a higher grade of 0.76 per cent copper, 0.09g/t gold and 2.78 g/t silver.
The operation is projected to churn out an average of 18,000 tonnes of copper in concentrate annually, along with credits of 12,900 ounces of gold and 304,800 ounces of silver.
The company’s production profile is backed by an impressively low-cost structure, with life-of-mine all-in sustaining costs projected at just US$1.46 (A$2.11) per pound of copper, well below the white-hot copper price of more than US$6 (A$8.7) per pound of the red metal.
Rio2 Limited president and chief executive officer Andrew Cox said: “To complement Rio2’s growth strategy, the company will be conducting studies to expand production at Condestable. The company expects to receive approval for the modification of the mine EIA during Q3 of this year, which will permit an increase in production.”
Condestable sits in Peru’s prolific coastal iron-oxide-copper-gold (IOCG) belt, a stretch of geology that also hosts the giant Mina Justa copper mine, which consistently delivers between 120,000 and 130,000 tonnes of copper per year.
With an eye on future growth, Rio2 says it’s undertaking an aggressive growth exploration program. A massive 46,480-metre diamond drilling campaign is underway, designed to both replace mined reserves and expand the resource base, with more than 17,200m of that program already completed.
The company says it is also assessing the potential for near-surface open-pit mining potential, undertaking a district-scale mapping and geophysics program across its 46,000-hectare land package to generate new expansionary targets.
Rio2 only completed its acquisition of Condestable in late January and this swift and substantial upgrade to the mine’s resources, reserves and operating life has underscored the asset’s significant potential.
With gold now flowing at its Fenix project in Chile and copper exploration humming in Peru, the company is shaping up for yet another growth run.
A major exploration program in motion and a production expansion on the cards, Rio2 appears to be executing a multi-asset growth strategy in South America with impressive speed and cost-saving efficiency.
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By Andrew Todd
