Santiago — Capstone Mining has entered talks with Chilean industrial group Sigdo Koppers to build a port for its Santo Domingo mine project, the copper producer said Sept. 16.
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Under a memorandum of understanding, Minera Santo Domingo and SK subsidiary Puerto Abierto will jointly study over the next 90 days "mutual synergies and regional benefits" of developing the port included in the Santo Domingo project.
Under the deal, Puerto Abierto would buy, build and operate the deep-water port and finance its development while the Santo Domingo mine would be the port's principal and preferred client.
Capstone owns 70% of the Santo Domingo project which it is estimated could produce 137 million lb/year of copper, 4.2 million mt/year of iron ore and 17,000 oz/year of gold over an 18-year mine life.
South Korea's Korea Resources Corp. owns the balance of shares.
Capstone obtained environmental approval for the mine and port complex in 2015 but development was halted due to the fall in metals prices.
The port would be only one of two ports able to handle Cape-size vessels in northern Chile's Atacama region, "making it an attractive site for bulk shipments and a key asset allowing for broad resource development."
SK will also study using its rail business to carry concentrate from the mine to the port, instead of the 110 km concentrate pipeline included in its environmental license.
Capstone said that infrastructure proposals could reduce the cost of the Santo Domingo project by around $400 million from an updated capital expenditure of $1.5 billion.
Capstone CEO Darren Pylot said the deal would facilitate development of the Santo Domingo project.
"Over the past three months we have seen a surge in interest in our fully permitted Santo Domingo project," Pylot said. "Our path forward includes successful culmination of the strategic sales process, executing a gold stream agreement and arranging project debt financing."