Serengeti Resources Inc. said April 3 that the preliminary economic assessment of the Kwanika copper-gold porphyry project in British Columbia estimates a pretax net present value, at a 7% discount rate, of C$324 million and a 21.1% pretax internal rate of return.
The project requires CapEx of C$476 million and a sustaining capital of C$37 million over a 15-year mine life.
The study used a base case of an average operating cost per tonne of C$21.15 and metal prices of US$2.90 per pound of copper, US$1,270 per ounce of gold and US$19.00 per ounce of silver adjusted to a U.S.-dollar-to-Canadian-dollar exchange rate of 0.77.
Metal production at the project is pegged at 600.6 million pounds of copper, 676,300 ounces of gold and 2.7 million ounces of silver in concentrates over the life-of-mine, while annual metal production in the first eight years is expected at 50.4 million pounds of copper, 70,100 ounces of gold and 181,100 ounces of silver in concentrate.
The company said independent consultants recommended advancing the project to a higher level of study leading to a pre-feasibility study and eventually to a feasibility study.
Serengeti optioned Kwanika to Daewoo Minerals Canada Corp., where the latter may earn up to a 35% interest in the project by providing up to C$8.2 million in funding.