Released on Tuesday (August 20), the revised PEA details an after-tax net present value of US$1.48 billion at an 8 percent discount, and an after-tax internal rate of return of 22.2 percent.
Oroco intends to employ a staged approach at Santo Tomas, with throughput of 60,000 metric tons each day in the first year of operation, with that amount rising to 120,000 metric tons daily by the eighth year.
The Mexico-based project will last about 22 years and covers a large area of nearly 9,000 hectares.
Over its entire lifespan, the property is expected to produce around 4.77 billion pounds of payable copper. Building the project will take two years, with an additional year for pre-stripping before mining starts.
Oroco estimates that the project’s initial capital costs will come to US$1.1 billion, with another US$1.73 billion needed for ongoing and future costs. Santo Tomas is projected to bring in US$21.52 billion in total revenue over its entire life, with a pre-tax payback period of 2.9 years and a post-tax payback period of 3.8 years from first concentrate production.
In its first seven years of output, Santo Tomas is projected to have an average copper equivalent grade of 0.51 percent, which Oroco said sets it up to be one of the most cost-effective large-scale copper projects worldwide.
“When we completed the initial PEA in December 2023 it was clear there was additional value to be unlocked at Santo Tomas. Upon careful analysis, a staged approach to the mine expansion and a focus on exploiting the higher-grade near surface material in the early years of mining has unlocked a considerable increase in value,” said CEO Richard Lock.
The new resource estimate outlines an indicated resource of 540.6 million metric tons at 0.33 percent copper, along with an inferred resource of 530.3 million metric tons grading 0.31 percent copper.
The company’s management team remains focused on optimizing the project’s operational aspects, including potential enhancements in metallurgical recoveries and capital cost reductions.
Market participants reacted positively to the news, with Oroco shares ending Tuesday up 7.14 percent at C$0.38.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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