Venturex Resources Ltd.'s definitive feasibility study for the Sulphur Springs copper-zinc project in Western Australia pegged a posttax net present value, based on a discount rate of 8%, of A$310 million and an internal rate of return of 39%.
The company added that on a pretax basis, net present value came in at A$472 million, compared to A$388 million in a February 2017 value engineering study. The pretax internal rate of return slid to 51%, compared to 52% previously.
Average production is expected to be 15,000 tonnes per annum copper and 35,000 tonnes per annum zinc over a 10.3 year mine life, higher than the previously estimated 12,000 tonnes of copper per year and 32,000 tonnes of zinc per year over a 12-year mine life.
Payback has been lengthened to 3.6 years, from 2.6 years previously.
The company noted Oct. 10 that that preproduction CapEx is estimated at A$146 million for a 1.25 million tonnes per annum processing plant and other infrastructure, down from A$167 million previously, in addition to A$23 million for other preproduction costs including site access and prestrip mining. The project's total revenue is expected to be A$2.63 billion, with average annual cash flow of about A$80 million.
Additionally, Venturex reported an increased ore reserve of 8.5 million tonnes at 1.4% copper and 3.1% zinc, up from 7.3 million tonnes at 1.2% copper and 3.5% zinc, representing a 42% increase in contained copper.
"With the DFS now complete, we are confident that we will be able to move rapidly to secure an appropriate project finance package supported by strategic off-take arrangements that will allow us to start development in the near term," said Managing Director AJ Saverimutto.