Metallica Resources Announces Receipt of El Morro Feasibility Study
January 21 2008 - 8:30AM
Marketwired
TORONTO, ONTARIO (AMEX: MRB) is pleased to report that it has
received the Feasibility Study from its joint venture partner,
Xstrata Copper, for Metallica's 30% owned El Morro copper-gold
project in Chile. The Feasibility Study is contained within 75
large binders that reach 25 feet in height. Due to the immense
amount of data that will have to be analyzed, a comprehensive press
release will be issued in due course. Below are the Base Case
elements of the Feasibility Study. All dollar amounts are in US
dollars.
- An initial capital investment of $2.5 billion is projected,
which includes an allowance for price escalation and a contingency
of 13%. The total life of mine (LOM) capital expenditure, including
sustaining capital, is estimated at $2.8 billion. The capital cost
estimates are considered to be accurate to within 15%.
- The Feasibility Study shows positive returns at long-term
prices of $1.92/lb for copper and $500/oz for gold, when discounted
at a rate of 8%.
- Operating costs are estimated at $10.56/tonne of ore and a
mine site cash cost of $0.74 cents/lb copper, after gold credits at
a long-term gold price of $500/ounce. The operating costs are
considered to be accurate to within 15%.
- The Feasibility Study was based on 487 million tonnes of ore
grading 0.56% copper and 0.44 g/t gold with a total waste to ore
ratio of 3.4:1, of which a portion will be capitalized
pre-stripping. Metallurgical recoveries are estimated at 88% for
copper and 69% for gold.
- Average annual production during the first five years has been
projected to be 195,285 tonnes/year (tpy) of copper and 353,774
ounces/year (oz/y) of gold. The average annual LOM production over
the currently estimated 15-year mine life is projected to be
157,453 tpy copper and 337,255 oz/y gold.
- The Feasibility Study includes a Project Execution Plan (PEP)
that calls for Environmental Impact Assessment approvals,
infrastructure detailed engineering and the procurement of
long-lead items during 2008.
Richard J. Hall, Metallica's President and CEO, states, "The
receipt of the El Morro Feasibility Study marks an important
milestone in the development of this very exciting project.
Metallica, along with its consultants, have already begun the task
of analyzing the extensive study provided to us by Xstrata."
Peter Forrestal, Executive General Manager of Project
Development for Xstrata, stated, "The Feasibility Study
demonstrates the potential for El Morro to contribute to Xstrata
Copper and Metallica's growth profile. We remain committed to
working with our partners, Metallica Resources, to advance the
project".
Metallica has engaged Pincock Allen & Holt (PAH) to act as
its technical consultant and Qualified Person responsible for
preparing an independent NI 43-101 Technical Report to be filed on
SEDAR. Prior to the filing of the NI 43-101 Technical Report, and
following meetings with Xstrata who will provide Metallica with a
thorough review of the study and plans for the project going
forward, Metallica will file a comprehensive press release
detailing the Feasibility Study.
Metallica Resources is a Canadian gold and silver producer. It
currently has 92.6 million shares outstanding and no debt. For
further details on Metallica Resources, please visit the company's
website at www.metal-res.com.
Information in this news release that is not current or
historical factual information may constitute forward-looking
information or statements within the meaning of the United States
Private Securities Litigation Reform Act of 1995 and applicable
Canadian securities legislation. Implicit in this information,
particularly in respect of statements as to future operating
results and economic performance of the Company, and resources and
reserves at the Company's mineral projects, are assumptions
regarding projected revenue and expense, gold, silver and copper
prices, and mining costs. These assumptions, although considered
reasonable by the Company at the time of preparation, may prove to
be incorrect. Readers are cautioned that actual results are subject
to a number of risks and uncertainties, including risks relating to
general economic conditions and mining operations, and could differ
materially from what is currently expected. The Company disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Contacts: Metallica Resources Inc. Richard J. Hall President and
CEO (303) 796-0229, Ext. 1 Metallica Resources Inc. Rhonda Bennetto
Investor Relations (303) 640-3292 Website: www.metal-res.com
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