Irish metals prospector Ormonde Mining today said it was upbeat on the economics for its Spanish mine.
The company said its La Zarza Copper-Gold Project in southwest Spain would involve a Phase 1 development from surface to 460 metres depth via a ramp-decline access mine, and a processing plant.
The additional work programmes to complete the bankable feasibility study by mid 2007 are already underway.
Phase-1 development envisages an underground mining operation producing 450,000 tonnes a year over a 10-year mine life, a statement from the company said.
Ormonde added that pre-production capital costs are estimated to be €26m and that operating costs would be €31 per tonne treated.
'At metal prices of $4,400/tonne ($2/lb) copper and $550/ounce gold, the ungeared IRR would be 21%, rising to 36% with appropriate gearing (at current prices of $7,000 copper and $600 gold, the IRR would be 65%),' the statement said.
Kerr Anderson, MD, said : 'the positive outcome of the study confirms our view that we have a viable mining project. The study gives us confidence in the project's cash-flow potential at the metal prices used, and if metal prices were to remain high, the economic returns could increase substantially'.
