Preliminary Economic Assessment (PEA) Summary
The PEA, initiated in late 2019 was produced by a team of independent consultants that possess extensive expertise in their respective fields. Further details on the contributors can be found in the Qualified Persons section of this news release.
All amounts are in United States dollars unless otherwise specified. Base case economics were calculated using a gold price of $1,400 per ounce, copper price of $2.75 per pound, molybdenum price of $9.00 per pound and a silver price of $16.00 per ounce. The effective date of the PEA is June 8, 2020 and a technical report relating to the PEA will be filed on SEDAR within 45 days of this news release
The PEA’s highlights include the following estimates:
The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that the PEA will be realized.
Table 1: Summary of Cangrejos Economic Results by Gold and Copper Price
|Percentage of Base Case Prices||80%||100%||120%|
|Gold Price (per oz)||$1,120||$1,400||$1,680|
|Copper Price (per lb)||$2.20||$2.75||$3.30|
|Pre-Tax NPV (5%) ($M)||$960||$2,555||$4,150|
|Post-Tax NPV (5%) ($M)||$451||$1,571||$2,519|
Table 2: Comparison to 2018 PEA
|Assumption / Value||June 2018 PEA||June 2020 PEA||Comments|
|Post-Tax NPV (5%)||$920 million||$1,571 million|
|Processed Tonnes||339 Mt||640 Mt||Increases with expanded Cangrejos and addition of Gran Bestia.|
|Processed Gold Grade Yr 1-5||0.79 g/t Au||0.76 g/t Au|
|Processed Copper Grade Yr 1-5||0.11% Cu||0.14% Cu|
|Processed Gold Grade LOM||0.69 g/t Au||0.56 g/t Au||Reduced due to lower average grade at Gran Bestia later in the mine life.|
|Processed Copper Grade LOM||0.12% Cu||0.10% Cu|
|Contained Gold LOM||7.5 Moz||11.4 Moz|
|Contained Copper LOM||0.9 Blbs||1.5 Blbs|
|Average Annual Gold Production||373 koz||366 koz|
|Average Annual Copper Production||43 Mlbs||46 Mlbs|
|Mine Life||16 years||25 years|
|Initial Capital Costs||$831 million||$1,000 million||Capital increases are driven by the addition of a CIL plant, tailings filtration and tailings / mineralized rock conveying costs.|
|Expansion Capital Costs||$401 million||$454 million|
|Sustaining Capital||$230 million||$445 million|
|Ecuadorian NSR Royalty||5.0%||3.0%|
Table 3: Cangrejos Life of Mine Capital Expenditure Estimate Breakdown
|Initial Capital ($M)|
|Process Plant, Infrastructure & Dry Stack Tailings Storage Facility||$429|
|Equipment (Mining and Ancillary Facilities)||$158|
|Pre-production Mine Development||$27|
|Other Direct and Indirect Costs||$168|
|Contingency (14% weighted average) (1)||$108|
|Working Capital, Freight Duty and Taxes (12% VAT on certain items) (2)||$111|
|Total Initial Capital||$1,000|
|Expansion Capital ($M)|
|Process Plant Expansion Capital||$348|
|Contingency (17% weighted average) (1)||$58|
|Working Capital, Freight Duty and Taxes (12% VAT on certain items) (2)||$49|
|Total Expansion Capital||$454|
|Sustaining Capital and Closure Costs ($M)|
|Life of Mine Sustaining Capital||$445|
|Average Annual Life of Mine Sustaining Capital||$18|
|Net Closure Costs (Closure, Severance and Salvage)||$97|
Note: Totals may not add up due to rounding.
(1) The contingency allowance was developed on an area by area assessment of estimate confidence. The assessment considered scope, quantification, and pricing factors to assign a contingency amount to each area.
(2) VAT on initial capital is recoverable in year one. Other VAT is recoverable on 12% of the export value once the Project is in production. VAT of $85 million was calculated on initial capital, with an additional $37 million on expansion capital.
Table 4: Summary of Cangrejos Operating Cost Estimates and Cash Costs
|Average Operating Costs||Years 1-5||Years 6-25||LOM|
|Mining Costs per Tonne Mined||$2.00||$1.85||$1.88|
|Per Tonne Milled|
|Processing and Tailings Management Costs||$6.80||$6.51||$6.54|
|General, Administrative, Environmental and Site Costs||$1.37||$0.71||$0.78|
|Total Operating Costs||$15.90||$10.76||$11.31|
|Average Net Cash Costs per Ounce(1)||Years 1-5||Years 6-25||LOM|
|Refining and Transport||$67||$79||$77|
|Government 3% NSR Royalty||$50||$51||$51|
|C1 Cash Cost Net of By-products||$589||$537||$545|
|Sustaining Capital and Net Closure Costs||$120||$49||$59|
|All-in Sustaining Net Cash Cost||$709||$586||$604|
|Average Gold Equivalent Cash Costs per Ounce(2)||Years 1-5||Years 6-25||LOM|
|Refining and Transport||$54||$62||$61|
|Government 3% NSR Royalty||$40||$40||$40|
|C1 Gold Equivalent Cash Cost||$749||$721||$725|
|Sustaining Capital and Net Closure Costs||$96||$39||$47|
|All-in Sustaining Gold Equivalent Cash Cost||$845||$760||$772|
Note: Totals may not add up due to rounding. By-products and equivalents calculated using $1,400 per ounce gold, $2,75 per pound copper, $9.00 per pound molybdenum and $16.00 per ounce silver.
Net Cash Cost: (Operating costs including transportation and refining costs + Royalties – By-product credits) / Payable Au oz.
Gold Equivalent Cash Cost: (Operating costs including transportation and refining costs + Royalties) / Payable Au Eq oz.
All-in Sustaining Cash Cost: Adds sustaining capital and closure costs to the Net Cash Cost and Gold Equivalent Cash Cost.
(1) Average annual Year 1-5 production of 267 koz and 31 Mlbs copper. Average annual Year 6-25 production of 391 koz and 50 Mlbs copper.
(2) Average annual Year 1-5 gold equivalent production of 333 koz, average annual Year 6-25 gold equivalent production of 497 koz and average LOM gold equivalent production of 464 koz.
Mining and Processing Facility
The PEA contemplates large-scale open pit mining using a 100% owner operated equipment fleet. Five mining phases were designed for Cangrejos and two mining phases were designed for Gran Bestia, both using a technique that optimizes present value by using a declining cut-off grade over the mine life.
Gran Bestia material begins to enter the mine production schedule in Year 5, however the majority of the Gran Bestia economic mineralization (88%) is mined in the last nine years of the production schedule.
Table 5: Mined and Processed Material Summary
|Processed Material Type||Tonnes
|Saprolite & Saprock||14||0.60||0.08||2.27||5.2||0.27||24||1.02||0.16|
Note: Totals may not add up due to rounding.
Table 6: Processing Schedule
|Years 1-5||Years 6-25||LOM|
|Avg. Processed Tonnes (Mt/a)||14||29||26|
|Avg. Gold Grade (g/t)||0.76||0.53||0.56|
|Avg. Copper Grade (%)||0.14||0.10||0.10|
|Avg. Silver Grade (g/t)||0.74||0.66||0.67|
|Avg. Molybdenum Grade (ppm)||25.3||19.4||20.0|
For more detailed information please view the full news release for Jun 9, 2020: Click Here
The scientific and technical information contained in this news release pertaining to the Project has been reviewed, verified and approved by the following Qualified Persons as defined by NI 43-101: Adrian Karolko, P.Geo., Robert Sim, P.Geo. (Mineral Resource), of SIM Geological Inc. (who has also verified the sampling, analytical, and test data underlying the disclosed Mineral Resource estimate); Joseph McNaughton, P.E. (Mining), of Independent Mining Consultants, Inc.; Robert Michel, SME Registered Member (Economic Analysis and Infrastructure) of Robert Michel Enterprises; Nelson King, SME Registered Member (Metallurgy); Kathleen Altman, P.E., PHD (Process) Scott Elfen, P.E. (Waste Rock and Tailings Management Facilities and Site Infrastructure) of Ausenco Limited, Norm Norrish, P.E. of Wiley & Norrish (Pit Slope Design) and Larry Breckenridge, P.E. (Hydrology, Hydrogeology, Geochemistry, and Infrastructure) of Global Resource Engineering, Ltd. All of the Qualified Persons are independent of Lumina.
Leo Hathaway, P.Geo, a "qualified person" within the definition of that term in NI 43-101, has reviewed and approved the scientific and technical information contained on this page.
A preliminary economic assessment is preliminary in nature, includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.