Caravel Minerals Ltd. will proceed to a pre-feasibility study at its namesake copper project in Western Australia after a scoping study estimated a posttax net present value, discounted at 7%, of A$705 million, with a 20% internal rate of return, a four-year payback period and a 23-year mine life.
The study envisions initial open pit mining of 16 million tonnes per annum for the first five years, ramping up to 30 Mtpa from year six onwards. Initial capex was pegged at A$481 million, according to the May 29 news release.
The ramp up to 30 Mtpa starting year six will require additional capex of A$256 million.
Over its entire mine life, Caravel will produce 45,000 tonnes of copper per year until year five, when it ramps up to 65,000 tonnes per year. C1 cash costs were estimated at US$1.45 per pound after byproduct credits.
Caravel is expected to generate life-of-mine cashflow of A$3.1 billion on net revenues of A$10.6 billion.
Copper concentrate from the project will then be transported via public roads for export at nearby ports in Western Australia.
The study is based on a resource of 662 million tonnes at 0.28% copper for 1.86 million tonnes of contained copper, based on a 0.15% copper cut-off.
Following the release of the scoping study, the company said it will proceed to more advanced feasibility studies, including a pre-feasibility study and a definitive feasibility study, subject to funding.
Completion of a pre-feasibility study is expected to take six months and a definitive feasibility study a further up to two years. Caravel expects to reach a decision to mine in mid-2021.