Oroco Resource disclosed that the Santo Tomas porphyry copper project in Mexico will require an initial capital expenditure (Capex) of $1.1bn, based on the findings of a preliminary economic assessment (PEA).
The sustaining and expansion capital for the Mexican porphyry copper project is estimated to be $1.73bn.
Prepared by Ausenco Engineering USA South, the PEA is based on a staged open pit mine and processing plant achieving a production rate of 60,000 tonnes per day in the first year of the project.
The Canadian mineral exploration company said that the Santo Tomas project will have a total life of 23.5 years. It includes one year of pre-stripping and one final year of stockpile rehandling at the mill.
Phase 2 of the project, which marks the expansion of the porphyry copper project to 120,000 tonnes per day, will start in the eighth year of operation.
Located in Sinaloa State, the Santo Tomas property includes 9,034ha of mineral concessions covering significant porphyry copper mineralisation in northern Sinaloa and southwest Chihuahua.
The PEA estimates an after-tax net present value (NPV) of $1.48bn for the Mexican porphyry copper project. It projects a post-tax internal rate of return (IRR) of 22.2% with an after-tax payback period of 3.8 years from the first concentrate production.
Oroco Resource CEO Richard Lock said: “When we completed the initial PEA in December 2023 it was clear there was additional value to be unlocked at Santo Tomas.
“Upon careful analysis, a staged approach to the mine expansion and a focus on exploiting the higher-grade near surface material in the early years of mining has unlocked a considerable increase in value.
“We have established a plan that invokes a very efficient use of capital and establishes a rapid post-tax payback of 3.8 years. The plan starts with the use of smaller equipment to provide rapid entry to the mineralised material and maintains a higher-grade feed profile to delay the requirement of an expansion until year 8.”
