Santo Domingo
Location Map
(Click picture to enlarge).
Overview
The Santo Domingo Project, owned 70% by Capstone and 30% by Korea Resources Corp. ("KORES") is a large-scale copper-iron-gold development project located approximately 800 kilometres north of Santiago in Region III, Chile. Santo Domingo has the potential to be a long lived significant copper and iron ore producer.
The Project is strategically located near key infrastructure (highway, rail, power, port, smelter and airport) at low elevation (1,000 metres) in an established mining district with several significant copper and iron mining and smelting operations. A pre-feasibility study, completed in the third quarter of 2011, contained the following highlights:
- Average annual production of 144 million pounds of copper, 4.1 million tonnes of iron concentrate and 15 thousand ounces of gold.
- Copper production will average 255 million pounds in the first five years of the Project.
- Base Case1 after-tax net present value (NPV), discounted at 8%, of $1.1 billion. Spot Case2 after-tax NPV (8%) of $4 billion.
- After-tax internal rate of return (IRR) of 22% with a payback period of 3.0 years (Base Case).
- Expected life of mine total cash production costs are estimated to be $0.11 per pound of payable copper (net of magnetite iron and gold by-product credits and selling costs); $0.32 in the first five years.
- Total capital costs estimated to be $1.24 billion, which includes a 14% contingency on total costs.
18 year mine life with operations expected to commence in late-2015. - Nominal plant throughput rate of 63,500 tonnes per day; 70,000 tonnes per day in the first five years.
- Favourably located close to existing infrastructure, with direct access to Asian markets.
- Off-take agreements (at market pricing) committed for 50% of the copper and 50% of the iron concentrate, life of mine, as part of the strategic partnership with KORES for development of the Project.
All amounts in U.S. dollars unless otherwise indicated and reflect 100% of the project.
1 Base Case at constant $2.50/lb. copper price, $1.00/dmtu iron price ($65/t conc. at 65% Fe), $1,000/oz. gold price. All calculations are Base Case except where otherwise specified.
2 Spot Case at constant $4.00/lb. copper price, $2.00/dmtu iron price ($130/t conc. at 65% Fe), $1,400/oz. gold price.
Location
The Santo Domingo Project is located 50 kilometres west of Codelco's El Salvador copper mine, and 130 kilometres north northeast of Copiapó in Region III, Chile, near the town of Diego de Almagro. Elevation at the site ranges from 1,000 to 1,280 metres above sea level, with relatively gentle topographic relief.
Access to the project is 1 kilometre off the paved highway C-17 from Diego de Almagro to Copiapó. Regional infrastructure is good and highways connect the site to the main regional towns and cities. Regularly scheduled air services are available between Santiago and El Salvador and the Atacama airport located northwest of Copiapó. The project is 60 kilometres from the pacific coast, providing seawater to the site and access to deep water port facilities.
Moving Forward
The project is expected to be fully-funded through a long-term strategic partnership with KORES who purchased 30% of the project from Capstone and acquired an 11% ownership in Capstone for US$372 million. In addition, KORES will arrange for debt financing for 65% of the capital costs of the project. Capstone anticipates that it will develop the Santo Domingo project for production commencing in 2015.
The PFS builds on the Preliminary Assessment ('PA') completed in 2008. Since the PA, considerable work has been done on the project. The mineral resource has been increased from 240 to 486 million tonnes, the metallurgical performance, using seawater for copper and iron recovery, has been proven, and a large data set to support grinding characteristics/throughput estimates has been gathered.
The Santo Domingo Project will be an open pit operation, using conventional drilling, blasting, loading with diesel hydraulic shovels, and truck haulage. The process plant will have an annual average throughput of 63,500 tonnes per day using SAG and ball milling, with conventional flotation utilizing seawater to produce a copper concentrate. Magnetite iron will be recovered from the copper rougher tailings using Low Intensity Magnetic Separation (LIMS). A pipeline will bring seawater from the coast, approximately 74 kilometres from the project, and both copper and iron concentrate will be transported to the coast in a slurry pipeline for export.
Preparation of the Environmental Impact Study is currently underway and a project implementation schedule has been developed for a Feasibility Study with additional test work and engineering, to be followed by procurement and construction of the process plant, related facilities, and infrastructure, with commissioning completed in late-2015.
| Project Milestones | |
| 2002 | Far West Mining strikes exploration agreement with BHP |
| 2002 | Area flown by BHP proprietary Falcon system |
| April 2005 | BHP converts exploration agreement into 2% NSR |
| July 2005 | Discovery drill-hole of Santo Domingo IOCG deposit |
| June 2006 | Initial Mineral Resource Estimate |
| Oct 2007 | Updated Mineral Resource Estimate |
| May 2008 | Preliminary Assessment issued |
| August 2010 | Updated Mineral Resource Estimate |
| June 2011 | Capstone acquires Far West Mining and Santo Domingo project |
| August 2011 | Pre-Feasibility Study issued |
| September 2011 | General Manager appointed |
| September 2011 | EIS awarded to Knight Piésold |
| January 2012 | Feasibility Study contract awarded to AMEC and NCL |
Geology and Mineralization
The project was initiated in 2002 when the former owner and BHP Billiton formed a strategic alliance to explore for Iron-Oxide-Copper-Gold (IOCG) deposits in northern Chile's IOCG belt. The Santo Domingo deposit was discovered in 2005 using BHP's proprietary Falcon system. The Santo Domingo Project comprises four deposits: Santo Domingo Sur, Iris, Iris Norte and Estrellita.
The IOCG belt stretches over a length of almost 1,200 kilometres from just north of Santiago in the south, to the city of Antofagasta in the north along the coastal cordillera of Chile. The belt is one of the most prospective IOCG provinces in the world and hosts numerous large copper deposits including Candelaria operated by Freeport-McMoRan (470Mt at 0.95% Cu) and Manto Verde operated by Anglo American (350Mt at 0.75% Cu).
The Chilean IOCG belt has traditionally been under explored and the exploration potential for IOCG deposits remains high. Large parts of the belt are under cover similar to Santo Domingo and Capstone intends to explore its properties in the belt for additional discoveries.
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Technical Reports |
