Sunday, December 24, 2006 Capital payback for Tampakan project predicted in 5 years
A TOP executive of an Australian firm with major interest in a mining company engaged in copper and gold exploration project in Tampakan recently said the firm can achieve capital payback in less than five years after starting full operations.
Indophil Resources NL managing director Tony Robbins pegged the project capital costs at US$1.4 billion, excluding infrastructure costs worth about US$500 million for power station and port development.
His disclosures were contained in an "Open Briefing," an Australian service launched in September 1999 with the support of the Australian Stock Exchange.
"The capital payback time is expected to be less than five years under very conservative price assumptions," he said, adding the Tampakan project has a mine life of 50 to 70 years.
Robbins said the cost of infrastructures will be shouldered by third parties, which he did not identify.
Indophil owns 95 percent stake of the Tampakan project being pursued by its Philippine affiliate Sagittarius Mines Inc. in the towns of Tampakan in South Cotabato, Columbio in Sultan Kudarat and Kiblawan in Davao del Sur.
The $1.4 billion capital is a big increase to the initial $650 million capital projections raised by Sagittarius officials when the company assumed the project in 2003.
Western Mining Corp. formerly owns the project.
When the firm started the pre-feasibility study (PFS) more than two years ago, Robbins said the capital cost stood at $1 billion.
The pre-feasibility study was completed last September.
"Our current estimate of operating costs is less than US$0.70 per pound and there's scope to reduce that considerably. The long term operating cost is less than US$7 per ton of ore," Robbins said.
"Altogether we think we've conducted a robust PFS and we're very pleased with the results," he added.
Results of the pre-feasibility study revealed that the Tampakan project is a world class, two billion ton deposit, containing 11.6 million tons of copper and 14.6 million ounces of gold at a 0.3 percent copper cut-off grade.
The Tampakan project is gearing towards a definitive feasibility study, which will be solely funded by Xstrata Queensland Limited (Xstrata Copper), a subsidiary of Xstrata Plc, to the tune of $30 million or P1.5 billion.
This stage is expected to be completed in 18 months.
Robbins said the company is currently looking at production stage in early 2011, a little adjustment from pronouncements earlier that full blast operations would take place not later than 2010. (BSS)
