UK Finders completes Wetar copper project scoping study

UK miner Finders Resources said on Friday that scoping study it had conducted on Wetar copper project confirmed the economic viability of its 64 percent-owned project.

The company said that the base case scenario on the project involved key elements of an Indicated and Inferred Mineral Resource estimate of approximately 10.7 Mt, grading 2.4% copper, 0.6g/t gold and 27g/t silver at a cut-off grade of 0.5% copper. The average strip ratio is estimated as 0.67, with mining rate of approximately 1.25 Mtpa of ore, initially from the Kali Kuning deposit with Lerokis production commencing in year 3 with an approximate 9 year mine life.

The study indicated that the mine would be able to produce some 23,000 tpa of LME A-grade good delivery copper metal.

The study also suggested that production of a rough copper concentrate would be conducted at Wetar island. The concentrate would then be shipped to a suitable hydrometallurgical plant.

According to the company, the scoping study model uses a discount rate of 10% with no financial gearing and assumes US$1.50/lb copper; approximately 60% silver recovery, US$10/ ounce silver and zero gold recovery. Key results are as follows: (i) an approximate US$105 million project expenditure requirement to commence production, including project management costs and working capital; (ii) Component capital cost estimates are: Mining, concentrate production and infrastructure on Wetar: US$50 million and Offshore hydrometallurgy plant: US$40 million; (iii) Average cash operating costs of US$0.60/lb copper (after silver by product credits); (iv) operating cash flow of approximately US$300 million with a 2.5 year payback period and (v) a project net present value of US$90M based the application of a 10% per annum discount rate to ungeared after tax projected cash flows, and an internal rate of return of 34%

The company said that 2-stage feasibility studies on the project would commence immediately, to advance technical and commercial aspects of project development, with a view to commencing project construction in Q4 2007. Stage 1 of the proposed feasibility study will include detailed studies to finalize treatment process selection, which is estimated to take 3-6 months and followed by a formal bankable feasibility study, which is estimated to take between 9 and 15 months to complete.(alex)