AlaraResources Ltd. said March 31 that a feasibility study supported thefinancial viability of the AlHadeetha copper-gold project in Oman, as the base case scenariopegged net present value at A$37.8 million, and an internal rate of return of21%.
The project will generate revenue of A$586.5 million over 10years of mine life with an estimated EBITDA of A$191.9 million. Free cash flow wasprojected at A$109.5 million.
CapEx was seen coming in at A$66.6 million, includingcontingency and working capital. Unit cash operating costs were estimated to beUS$26.71 per tonne of processed material.
The base case assumes a conservative copper price range ofUS$5,190 to US$5,593 per tonne until 2019, and after that the price is fixed atUS$5,593 per tonne, which is lowest price point projected for the remainingperiod.
Meanwhile, the study uses gold price of US$1,200 per ounceand refining charges of US$5 per ounce with 90% payable, while copper treatmentcharges of US$80 per tonne and refinery charges of 8 U.S. cents per pound of96.5% payable quality.
The base case NPV is most sensitive to copper prices,followed by copper grade and recovery.
The study is based on mineral inventory of inferred andindicated 10.11 million tonnes at 0.84% copper and 0.19 g/t of gold.
From this mineral inventory, 313,423 dry tonnes of copperconcentrate containing 77,102 tonnes of copper metal and 18,151 ounces of gold,with an average annual concentrate production of 30,402 tonnes of coppercontaining 1,762 ounces of gold has been estimated.
The company plans to conduct further reverse circulationdrilling at the Washihi deposit next month to upgrade more inferred resourcesto indicated category.