Candente Copper Corp. (TSX:DNT, BVL:DNT, US:CDOUF) ("Candente
Copper” or “the Company") is very pleased to announce completion by
Ausenco Engineering Canada Inc. (“Ausenco”) of a positive
Preliminary Economic Assessment (“the 2022 PEA”) for its 100% owned
Cañariaco copper project in Northern Peru.
Based on projected average annual metal
production of 173 million (“M”) pounds (“lb”) (78,543 tonnes)
copper, 31,395 ounces (“oz”) gold (“Au”), and 703,588 oz silver
(“Ag”) for 28 years and an initial capital cost estimate (“CapEx")
of $1.04 B, the Cañariaco Norte project has an after-tax net
present value (“NPV”) of US$1,010 M, and after-tax internal rate of
return (“IRR”) of 16.3% using a copper price of US$3.50 /lb,
US$1,650/oz Au, US$21.50/oz Ag and a discount rate of 8%.
The NPV increases to US$1,833 M, with an IRR of
21.9% and payback of 4.5 years when using a copper price of
US$4.50/lb, US$1,650/oz Au and US$21.50/oz Ag. The C1 cash
operating cost (*see below under Operating Costs) is estimated to
be US$1.28/lb of copper. The forecast strip ratio is
0.66.
Commenting on the results, President and CEO
Joanne C. Freeze stated, “We are very pleased with the results of
this new PEA which has achieved three key project objectives: 1) a
lower initial capital cost; 2) a subsequent project expansion
financed from cash flow and 3) enhanced environmental, social, and
governance (“ESG”) practices. The lower CapEx offers many more
opportunities to finance the project. The focus on enhancing ESG
practices led to a single dry stack waste management facility (WMF)
with co-mingling and co-disposal of waste rock and filtered mill
tailings, would produce an overall smaller footprint for the
project that is further distanced from farming communities.
Building on the ESG mandate, geometallurgical modelling of the
Cañariaco Norte deposit gives a better understanding of the
mineralization, resulting in a highly marketable concentrate with
no need for arsenic treatment and lowers the projected operating
cost estimate (“OpEx”)”.
“The 2022 PEA presents an alternative business
case for developing the Cañariaco Project with a smaller initial
CapEx, however larger companies could prefer to develop it as a
larger project with a much higher throughput on
start-up. The Cañariaco project offers many advantages.
It is reasonably close to key road and power infrastructure, has a
low strip ratio, moderately soft rock (BWI 11.2), low operating
cost and offers excellent potential for discovery of additional
mineralization. The very large data base from previous
engineering work supports the 2022 PEA which together could allow
moving directly into a feasibility evaluation phase,” also stated
Joanne Freeze.
The 2022 PEA by Ausenco builds on earlier
advanced engineering studies conducted from 2010 through 2014. Key
highlights follow:
- Initial CapEx of $1.04 B – 40,000
tonnes per day (“tpd”) mine and plant;
- Mine and plant expansion to 80,000
tpd in year 7 with additional CapEx of $305 M from cash flow;
- Cash operating cost of US$1.28/lb
of copper including all on-site and off-site costs, treatment and
refining charges (“TC/RC"), net of by-product credits;
- Advanced ESG development strategies
result in improved Infrastructure Design including a single waste
management facility (WMF) with co-mingling and co-placement of
waste rock and filtered mill tailings creating a smaller overall
footprint further distanced from populated areas;
- Waste to mineralized material strip
ratio of 0.66:1
- After-tax NPV of US$1,010 M for
base case of US$3.50/lb Cu, US$1,650/oz Au, US$21.50/oz Ag, and 8%
discount rate;
- After-tax IRR of 16.3% for base
case of US$3.50/lb Cu, US$1,650/oz Au, and US$21.50/oz Ag;
- After-tax NPV increases to US$1,833
M, with an IRR of 21.9% and payback of 4.5 years when using a
copper price of US$4.50/lb.
- Payback of pre-production capital
in 7.1 years using base case price of US$3.50/lb Cu and 4.5 years
using US$4.50/lb Cu;
- Highly leveraged to copper
prices;
- Life-of mine (“LOM”) metal
production of 4,848 Mlb (2,199,215 tonnes) Cu, 879,051 oz Au, and
19,700,467 oz Ag;
- Average annual metal production of
173 Mlb (78,543 tonnes) Cu, 31,395 oz Au, and 703,588 oz Ag during
the LOM;
- Average annual metal production of
120 Mlb (54,539 tonnes) Cu, 24,375 oz Au, and 548,667 oz Ag for the
first six years;
- Average annual metal production of
193 Mlb (87,475 tonnes) Cu, 34,243 oz Au per year, and 766,753 oz
Ag per year for the second mine phase, which will run for 21.4
years;
- Average LOM metal recoveries of
88.1% for Cu, 64.7% for gold and 57.2% for silver;
- Concentrate grades are forecast to
average approximately 26% Cu, 3.63 g/t Au and 84.16 g/t Ag for
first six years;
- LOM Concentrate grades are
projected to average approximately 26% Cu, 3.27 g/t Au and 75.40
g/t Ag;
- Conventional crush/grind and
flotation technology;
- Decreased OpEx with marketable
concentrate with no need for arsenic treatment;
- Pre-production capital cost of
US$1.04 B is based on leased mining equipment and includes a
contingency allocation of 18.5%;
- All-in capital cost of US$1.57 B
based on leased mining equipment and including life-of-mine
sustaining capital, expansion capital and closure cost;
- 28-year mine life, with potential
for extension if additional resources identified below proposed pit
can be included in a mine plan;
- Located at a moderate elevation
with pit centroid and process plant at approximately 3,000 metres
above sea level;
- Connection to the national power
grid is planned to be by direct line approximately 55 km from the
project site to the Carhuaquero substation site;
- Significant potential for discovery
of additional mineralization at nearby Cañariaco Sur and Quebrada
Verde targets.
The Cañariaco Norte Mineral Resource estimate
has been updated (see Table 5 below and also the Company’s news
release NR 144 dated January 28, 2022) and using a 0.15% Cu applied
cut-off, which represents an approximate breakeven cut-off,
contains 9.29 Blb Cu, 2.14 Moz Au and 59.43 Moz Ag in the Measured
and Indicated categories as well as 2.66 Blb Cu, 0.55 Moz Au and 18
Moz Ag in the Inferred category.
Measured, Indicated and Inferred Mineral
Resources were used in the 2022 PEA mine plan. Within the ultimate
pit, at the $6.52/t NSR cut-off the classification breakdown of the
mill feed material is 54% Measured Mineral Resources, 38% Indicated
Mineral Resources and 8% Inferred Mineral Resources.
The 2022 PEA is preliminary in nature. It
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 2022 PEA will be
realized. Mineral resources that are not mineral reserves do not
have demonstrated economic viability.
An Inferred Mineral Resource estimate was also
recently completed for a portion of Cañariaco Sur which contains
2.2 Blb Cu, 1.2 Moz Au and 15 Moz Ag (NR 144), however the 2022 PEA
mine plan only includes resources from Cañariaco Norte.
The current scope of development incorporates
open pit mining, crushing, semi-autogenous grinding (“SAG”), and
flotation followed by a waste management facility using co-mingling
(mixed together) and co-placement (not mixed together) deposition
strategies for filtered tailings and waste rock. The initial
production rate is expected to be 40,000 tpd with an expansion to
80,000 tpd in year 7 of operation. The LOM waste to mineralized
material stripping ratio is very low at 0.66:1, with the majority
of waste coming out by year 10. Incorporation of the filtered
tailings technology is favoured for new mining projects as it
eliminates the need for wet slurry tailings deposition along with
being considered best practice for environmental compliance and
social acceptance. The 2022 PEA mine plan calls for a mine life of
28 years, however additional mineral resources exist below the
current pit outline which may offer potential to extend the mine
life.
Importantly, updated geometallurgical modelling
of Cañariaco Norte has provided a more detailed understanding of
the deposit and mineralization and enabled development of a mine
plan that could produce a marketable copper concentrate with no
requirement for treatment to reduce arsenic.
Financial Analysis
The NPV of the Cañariaco project at various
copper price points and discount rates are presented in Table 1.
Candente Copper has selected as the base case long-term metal
prices of US$3.50/lb Cu, US$1,650/oz Au and US$21.50/oz Ag. The
Cañariaco project is highly leveraged to the price of copper. At
long term copper prices above US$3.50/lb, the after tax NPVs and
IRRs increase significantly. Sensitivity to the copper price is
also presented in Tables 1 and 2.
Table 1: Project Net Present Value &
IRR (After Tax)*
Cu Price (US$/lb) |
|
3.00 |
3.25 |
3.50 |
4.00 |
4.50 |
5.00 |
Undiscounted Cumulative Net Cash Flow (US$ M) |
|
3,990 |
4,680 |
5,368 |
6,734 |
8,092 |
9,444 |
Discounted Cash Flow (US$ M) |
6% |
|
1,014 |
1,286 |
1,556 |
2,092 |
2,624 |
3,153 |
8% |
|
591 |
802 |
1,010 |
1,423 |
1,833 |
2,241 |
10% |
|
299 |
465 |
630 |
955 |
1,278 |
1,599 |
IRR (%) |
|
13.2 |
14.8 |
16.3 |
19.2 |
21.9 |
24.4 |
Average Annual Cash Flow (US$M) |
|
180 |
204 |
229 |
278 |
326 |
375 |
Payback (Years) |
|
8.6 |
7.9 |
7.1 |
6.3 |
4.5 |
3.8 |
Table 2: Project Net Present Value &
IRR (Pre-Tax)*
Cu Price (US$/lb) |
|
3.00 |
3.25 |
3.50 |
4.00 |
4.50 |
5.00 |
Undiscounted Cumulative Net Cash Flow (US$ M) |
|
6,762 |
7,968 |
9,174 |
11,586 |
13,998 |
16,410 |
Discounted Cash Flow (US$ M) |
6% |
|
1,969 |
2,443 |
2,917 |
3,866 |
4,814 |
5,762 |
8% |
|
1,291 |
1,657 |
2,023 |
2,754 |
3,485 |
4,216 |
10% |
|
821 |
1,109 |
1,397 |
1,974 |
2,550 |
3,126 |
IRR (%) |
|
17.2 |
19.4 |
21.6 |
25.7 |
29.5 |
33.3 |
Average Annual Cash Flow (US$M) |
|
279 |
322 |
365 |
451 |
537 |
623 |
Payback (Years) |
|
7.4 |
6.6 |
6.1 |
3.9 |
3.3 |
2.8 |
*Gold and silver prices used did not vary and
are US$1,650/oz Au and US$21.50/oz Ag
The financial model is based on open pit mining
by the owner with financed mobile mining equipment including
scheduled additions and replacements. All other project costs are
the responsibility of the Owner, including process and
infrastructure preproduction capital, LOM sustaining capital, and
closure costs.
Taxes have been estimated by a third-party tax
consultant and include a Peruvian corporate income tax of 29.5%
(plus 2% during the term of an assumed Stability Agreement),
employee profit sharing of 8% of taxable income and mining taxes
for the exploitation of mineral resources which are based on the
operating profit (mining royalties on a sliding scale of 1% to 12%
with a minimum of 1% of sales and special mining tax on a sliding
scale of 2% to 8.4%). Depreciation on capital equipment,
development and exploration cost as permitted by Peru tax
regulations has been applied. Finance charges for project
construction capital have not been applied in the financial
model.
Capital Costs
Pre-production direct capital costs for the
40,000 tpd initial phase of the project are estimated to be US$744
M, which includes US$119 M for mine preproduction development,
US$49 M for mining infrastructure and equipment, US$360 M for the
process plant, US$116 M for the waste management facility, and
US$85 M for infrastructure (including access road, and external
power line), US$7 M for site-wide water services, and US$7 M for
site-wide power and lighting. The total indirects, Owner’s costs,
and contingency are estimated to total US$299 M.
The capital cost estimate is predominantly based
on Q4 2021 costs. In addition to the pre-production capital cost,
the financial analysis includes LOM sustaining capital costs of
US$119 M, Phase II expansion capital costs of US$305 M, and closure
costs of US$104 M.
Table 3: Capital Cost
Summary
|
PHASE I (40,000 tpd) |
PHASE II (80,000 tpd) |
Cost Area |
Cost (US$M) |
Cost (US$M) |
Pre-stripping |
119 |
- |
Mining Infrastructure & Equipment |
49 |
- |
Process Plant |
360 |
204 |
Site Related Infrastructure (inc. Ext Power) |
85 |
2 |
Tailings and Waste Rock Management |
116 |
- |
Sitewide Water Services |
7 |
1 |
Sitewide Power and Lighting |
7 |
- |
Subtotal – Directs |
744 |
207 |
Indirects |
137 |
42 |
Owner's Cost |
14 |
5 |
Contingency |
148 |
50 |
Subtotal - Indirects |
299 |
97 |
TOTAL PREPRODUCTION CAPITAL |
1,043 |
305 |
Sustaining Capital (Life-of-Mine) |
45 |
74 |
Closure Costs |
|
104 |
Subtotal Life-of-Mine |
45 |
178 |
TOTAL PROJECT CAPITAL COSTS* |
1,088 |
483 |
*Note to Table 3 - Totals may not sum due to
rounding
Capital cost for the mobile mining equipment
including drills, haul trucks and shovels (LOM total of US$71M) is
assumed to be financed at 20% down, 4.25% interest and terms up to
60 months.
Operating Costs
Life of mine operating costs are summarized in
Table 4. C1 cost of US$1.28/lb of payable copper consists of
mining, processing, site general and administrative (“G&A”),
off-site treatment and refining, transport, and royalties net of
by-product credits (Au and Ag). C3 cost of US$1.39/lb of payable
copper includes C1 plus sustaining capital, expansion capital, and
closure costs.
Table 4: Life of Mine Operating Costs
Summary
Area |
Unit |
US$ |
Unit |
US$ /lbCu |
|
|
|
|
|
On-site Costs |
|
|
|
|
Mining |
$/t processed |
2.62 |
$/lb Cu |
0.38 |
|
Processing |
$/t processed |
4.76 |
$/lb Cu |
0.69 |
|
Co-mingle Tailings |
$/t processed |
0.12 |
$/lb Cu |
0.02 |
|
General & Administration |
$/t processed |
0.70 |
$/lb Cu |
0.10 |
|
Sub-total Site Costs |
$/t processed |
8.21 |
$/lb Cu |
1.19 |
|
|
|
|
|
|
Off-site Costs |
|
|
|
|
Concentrate Transport |
$/t concentrate |
127.47 |
$/lb Cu |
0.24 |
|
Smelting & Refining |
$/t concentrate |
119.10 |
$/lb Cu |
0.22 |
|
Sub-total Off-site Costs |
$/t concentrate |
246.57 |
$/lb Cu |
0.46 |
|
Total Cost On-Site &
Off-Site |
|
|
$/lb Cu |
1.64 |
|
Credits (Gold, Silver) |
|
|
$/lb Cu |
(0.39 |
) |
Total Cost |
$/lb Cu |
1.28 |
|
Cañariaco Norte Project
Description
An outline of the Cañariaco Norte project
including mineral resources, mining, processing, product handling,
and financial analysis is provided above. The development scope for
Cañariaco Norte is based on proven industry technology.
Cañariaco Norte Mineral
Resources
The mine plan for the 2022 PEA is based on the
2022 Mineral Resources summarized in Table 5.
Table 5: Mineral Resource Estimate
(0.15% Copper Cut-off Grade)
|
|
|
|
|
|
Contained Metal |
ResourceClassification |
tonnes(Mt) |
Cu Eq(%) |
Cu(%) |
Au(g/t) |
Ag(g/t) |
Copper(B lbs) |
Gold(M Ozs) |
Silver (M Ozs) |
Measured |
423.5 |
0.48 |
0.43 |
0.07 |
1.9 |
4.04 |
0.98 |
25.71 |
Indicated |
670.7 |
0.39 |
0.36 |
0.05 |
1.6 |
5.25 |
1.16 |
33.72 |
Measured+Indicated |
1,094.2 |
0.42 |
0.39 |
0.06 |
1.7 |
9.29 |
2.14 |
59.43 |
Inferred |
410.6 |
0.32 |
0.29 |
0.04 |
1.4 |
2.66 |
0.55 |
18.09 |
**Notes to accompany Cañariaco Norte
Mineral Resource table:
-
The Mineral Resources estimate has an effective date of January 27,
2022. The Qualified Person for the estimate is David Thomas, P.Geo.
of DKT Geosolutions Inc.
-
The Mineral Resources were reported in accordance with the Canadian
Institute of Mining and Metallurgy ("CIM") Definition Standards for
Mineral resources and Mineral Reserves (2014) and estimated using
the CIM "Estimation of Mineral Resources and Mineral Reserves Best
Practice Guidelines; " (2019);
-
Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability.
- The Mineral Resources are reported
within a constraining Lerchs Grossmann pit shell developed using
Hexagon’s MinePlan 3D™ software using:
- A copper price of US$3.50/lb
-
Mining cost of US$1.60/t;
-
A combined processing, tailings management and G&A cost of
US$6.52/t;
-
Variable pit slope angles ranging from 36 to 39 degrees;
-
A copper process recovery of 88%;
-
Copper concentrate smelter terms: US$75/dry metric tonne treatment
charge, US$0.075/lb refining charge and 96.2% payable;
- Estimated concentrate shipping
costs of US$133.00/wet metric tonne of concentrate;
- Copper equivalent grades including
contributions from gold and silver, were estimated using metal
prices (copper US$3.50/lb, gold US$1,650/oz, and silver
US$21.50/oz), metallurgical recoveries of copper 88%, gold 65%;
silver 57%) and smelter payables of copper 96.5%: gold 93%; silver
90%. Copper grade equivalent calculation: Cu Eq% = Cu % + ((Au
grade x Au price x Au recovery x Au smelter payable%) + (Ag grade x
Ag price x Ag recovery x Ag smelter payable))/(22.0462 x Cu price x
31.1035 g/t x Cu recovery x Cu smelter payable%);
-
All figures are rounded to reflect the relative accuracy of the
estimate. Totals may not sum due to rounding as required by
reporting guidelines;
-
The contained metal figures shown are in situ.
David Thomas, P.Geo. of DKT Geosolutions Inc.
produced the updated resource estimate for the Cañariaco Norte
deposit based on drilling information and geological interpretation
provided by Candente Copper. Mr. Thomas undertook quality assurance
and quality control studies on the mineral resource data for the
Cañariaco Norte project and concluded that the collar, assay and
geological data are adequate to support resource estimation.
This updated mineral resource estimate is based
on 230 drill holes as well as a review of the deposit lithology,
alteration and specific gravities.
The recently disclosed (NR 144) Inferred Mineral
Resource estimate for Cañariaco Sur are not included in the 2022
PEA mine plan.
Waste Management Facility (Tailings and
Waste Rock)
The filtered tailings and waste rock will be
placed together using co-mingle (mixing them together at the
facility) and co-placement (not mixing them together at the
facility) deposition strategies to produce a single dry stack waste
management facility (“WMF”). The facility is located west of the
process plant, which will significantly reduce site water run-off.
During co-placement operations, the waste rock will be used to
create exterior berms to reduce erosion and sediment transports of
tailings during rainfall events. Both materials will be conveyed to
the site using conveyor systems. The waste rock will be crushed and
the tailings will be filtered prior to conveying.
In pre-production, waste rock will be placed at
the bottom of the WMF to create a stable platform on which the
co-mingled and co-placed filtered tailings and waste rock will be
deposited. In the initial six years, waste rock and filtered
tailings will be conveyed, co-mingled at the WMF, and compacted
using dozers and compactors to improve overall stability of the
storage facility. In subsequent years when there is less waste
rock, the filter tailings and waste rock will continue to be
transported by conveyors, but placement will use the co-placement
strategy, i.e. the waste rock will be used to create exterior berms
along with compact the filtered tailings to contain sediment during
rainfall events. Both materials will be spread and compacted using
dozers and compactors.
As part of the WMF water management, rock
drains, temporary contact water collection ditches, non-contact
water diversion channels, and a contact water pond will be
constructed to manage the facility waters. Rock drains will be
placed along the lowest elevation line (thalweg) of all drainages
below the facility to capture near surface groundwater and seepage
through the facility and discharge it into a water management pond
below the facility. Temporary collection ditches located within the
WMF will convey surface water to the contact water pond below the
facility. Staged non-contact diversion channels will be constructed
to convey non-contact surface runoff around the facility. Water
from the contact water pond will be used for process water or
treated and discharged to the environment.
For closure, the WMF will be capped with a cover
system that will include a vegetative cover.
Mining
The 2022 PEA envisions a large-scale open pit
mine using conventional truck and shovel mining. Mining will be
performed on 15 m benches, using 35 m3 electrified hydraulic
shovels, diesel blasthole drills, and 218 t haul trucks. The single
pit will have four pit phases. The mine plan calls for the
extraction of 702.7 Mt of mineralized material and 465.3 Mt of
waste over the projected two years of pre-production and 28 years
of operating life (strip ratio of 0.66:1). Average LOM head grades
to the process plant will be 0.38% Cu, 0.07 g/t Au and 1.7 g/t Ag.
Importantly, the mine grades during the first seven years of
production will be higher, with average feed grades of 0.45% Cu,
0.08 g/t Au and 2.0 g/t Ag. The mined quantities and Cu grades by
year are shown below.
A photo accompanying this announcement is
available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/f20aaecb-ade3-4dc4-907c-07bc0509459a
Measured, Indicated and Inferred Mineral
Resources were considered for processing. Within the ultimate pit,
at the $6.52/t NSR cut-off the classification breakdown of the mill
feed material is 54% Measured Mineral Resources, 38% Indicated
Mineral Resources and 8% Inferred Mineral Resources.
The open pit slope design was developed based on
geotechnical logging of drill core plus rock quality evaluation and
compressive strength testing of a limited number of core samples.
The amount of geotechnical data available is sufficient to support
PEA-level designs for the pit wall slopes. Additional geotechnical
drilling in the proposed pit area will be required to permit a
feasibility level pit wall design. Candente Copper plans to
complete the required geotechnical drilling and rock quality
testing as part of a feasibility study program.
Metallurgy and Process
Grinding and flotation test work was performed
by SGS Lakefield located in Santiago, Chile, under the direction of
Transmin Metallurgical Consultants, based in Lima.
The metallurgical test work indicates that the
sulfide mill feed can be processed by conventional crushing,
grinding and flotation technologies to recover copper, gold, and
silver from the Cañariaco Norte deposit to a copper
concentrate.
Cañariaco concentrator throughput for the first
six years of production will average 40,000 tpd, ramping up to
80,000 tpd in year seven for the remainder of the mine life.
Process equipment will be added and optimised within the
concentrator in order to achieve annual average copper production
for the LOM of approximately 173 Mlb per year. Average annual
production for the first six years is estimated at 120 Mlb Cu.
The 2022 PEA eliminates the roasting of the
concentrate and associated plant facilities that were envisaged in
earlier studies. As a result, the technical challenges associated
with roasting of the concentrate and copper cathode production were
eliminated from the flow sheet. Instead, the 2022 PEA will produce
a lower-grade copper concentrate to manage potential issues with
deleterious elements reporting to the concentrate. Average arsenic
grade of the concentrate is estimated to be 0.49% for first six
years and 0.52% for LOM, resulting in minimal expected penalty
charges totalling US$26M for LOM.
The run-of-mine (“ROM”) pad and primary crushing
station will be located adjacent to the mine infrastructure area
(“MIA”). Mineralized material and waste will be processed through
separate primary crushers and conveyed via an overland conveyor to
two separate crushed material stockpiles.
Crushed mineralized material for both grinding
lines, (the second grinding line will be installed for the plant
expansion that starts operations the beginning of year seven), will
be stored in a single conical stockpile with a total capacity of up
to 250,000 t and a live capacity of 62,500 t.
Coarse mineralized material will be reclaimed
from the stockpile by apron feeders onto the SAG mill feed
conveyor, two for each grinding line.
The grinding circuit will consist of two
identical, parallel lines. Each grinding line will consist of a
single SAG mill followed by a single ball mill operating in closed
circuit with a cyclone cluster. The SAG mills will be located at
the north end of the grinding building while the ball mills will be
to the south. A pebble crusher for each grinding line will be
housed in an open steel structure near the stockpile.
The copper flotation circuit area will take
advantage of the natural ground slope for process slurry flow. The
circuit will consist of two parallel trains of rougher flotation
cells, rougher concentrate regrinding. followed by first and second
stage cleaner cells.
The copper regrind circuit will be adjacent to
the copper flotation area. The facility will consist of a concrete
containment area with an open structure housing all equipment.
Final copper concentrate will be dewatered and
filtered before being stored in a covered stockpile. Copper
concentrate will be loaded onto trucks via a front-end loader
before trucking to a load-out port facility near Salaverry in
Northern Peru for ocean shipment to offshore smelters.
The process plant will be located entirely to
the south of the planned Cañariaco Norte pit and west of the
Cañariaco River.
Water Management
Candente Copper management recognizes and fully
respects the importance of water to both the daily lives of the
surrounding communities and agricultural projects downstream. A
controlled water management system was developed for the 2022 PEA,
and preliminary engineering studies indicate that the Cañariaco
project will have minimal impact on the local water resources.
Local ground water and surface water courses
within the proposed mine area are expected to be adequate to supply
the majority of water required for the proposed mine operation.
Discharge of water to the environment is anticipated only after
project closure. The water management system will ensure that
discharge streams meet the appropriate Peruvian and International
regulations for water quality and be suitable for downstream
agricultural usage. As part of the next phase of project
engineering study Candente Copper plans to work with the local
community to assess opportunities for the provision and
distribution of water for agricultural purposes.
Environment and Community
The Cañariaco Project is located within the
surface rights of the San Juan de Cañaris farming Community, in the
district of Cañaris, province of Ferreñafe, department of
Lambayeque. The project ecosystem consists of dry plateaus and
cloud forests at higher elevations and cultivated land at lower
elevations. The project is not located in protected natural areas
or buffer zones. Intensive study of the project area has provided a
greater understanding of the biodiversity within the ecosystem.
The development of the Cañariaco project could
significantly increase local and regional, direct and indirect,
employment opportunities. In addition, it would generate
significant ongoing revenues for regional and national suppliers of
goods and services required for construction and production at the
mine. Furthermore, the project would provide a substantial
long-term addition to the tax base for the Lambayeque region.
In keeping with industry best practices,
Candente Copper intends to follow the Equator Principals and World
Bank Standards for the proposed mining development at Cañariaco.
These protocols outline best practices for developing projects with
regard to protecting the environment, biodiversity and managing
social impact. The Company will also continue to comply with
Peruvian environmental regulations.
Since 2007, Candente Copper has contracted
baseline studies for biodiversity indicators such as species
richness, level of endemism (for amphibians, orchids, insects, and
small mammals), and the presence of endangered species. These
studies have resulted in a greater understanding of the
biodiversity of the overall region as well as the project area and
have identified diverse flora and fauna assemblages present in the
Project area as well as the greater region. In addition, many
protected and endangered species have been recorded or sited within
the greater project footprint and all of these have also been found
in similar habitats within Peru or in neighbouring countries.
To date, Candente Copper instigated two
conservation projects that encompass the relocation of protected
flora and fauna found at the site and the identification of an area
for conservation and environmental management.
Candente Copper has also offered support for a
national conservation initiative for the creation of a 60,000 ha
National Park south of the project for the protection of similar
habitats and species.
Permitting Advances
Various environmental studies have been carried
out since 2007. Several semi-detailed Environmental Impact Studies
(“EIAsd”) were conducted for drilling permits over the years and
the Company had consultants begin collecting data for a detailed
EIA (EIAd) in 2007. Approved Environmental Permits include:
Resolución Directoral No. 0063-2007/MEM-AAM in February 2007;
Resolución Directoral No. 354-2007/MEM-AAM in Oct 2007; Resolución
Directoral No. 045-2008-MEM/AAM in Feb 2008; Resolución Directoral
No. 177-2012-MEM/AAM in May 2012; and Resolución Directoral No.
0462-2014-MEM/DGAAM in September 2014. Most of the work between
2007 and 2014 was conducted and prepared by AMEC Peru S.A., an
environmental consultancy based in Lima, Peru.
In 2020, the Company engaged Global Yaku
Consulting (“Yaku”), a Peruvian-based environmental consultancy to
conduct an updated EIAsd for the Project. No material issues that
would affect project permitability have been identified to
date.
Candente Copper has received several permits for
certain aspects of the Cañariaco project development. A Certificate
of Non-existence of Archaeological Remains (CIRA) N° 2008-403 was
obtained for the area of the Cañariaco Norte pit. In 2007, 2010,
2011 and 2014, archaeological evaluations were carried out, the
results of which were presented as part of the EIAsds and the
Modification of the EIAsd, which were approved by the various
Directorial Resolutions. Most recently in October 2021, Yaku
conducted an archaeological assessment to complement the evaluation
of the proposed pit area. No archaeological artefacts were
identified in the area.
Opportunities
Based on the work completed to date there are
several significant opportunities that may offer the potential to
further enhance the Cañariaco project including:
- Further
iterations of mine planning may result in reductions of
pre-stripping quantities, which could reduce the initial capital
cost and potentially improve project economics;
- The Cañariaco
Norte deposit is open to depth and the potential exists for the
mine life to be extended beyond the assumed 28 years in the 2022
PEA if mineralization below the current pit base can be included in
a mine plan;
- There may also
be potential to reduce cost by increasing the mining and/or
processing rate. Both opportunities offer the potential to enhance
the economics of the Cañariaco project;
- The potential
exists to discover and delineate additional mineralization at the
Cañariaco Sur and Quebrada Verde targets, which are located within
4 km south of the Cañariaco Norte deposit. Such mineralization may
provide supplemental mill feed to the proposed Cañariaco
plant;
- Additional
geotechnical drilling could offer the potential to steepen pit
walls which could potentially increase economics.
Risks
Geotechnical investigations in the WMF area have
not been completed and as a result there is a risk that the
facility design may require revision. The design basis will be
reviewed during future more detailed studies.
As with most projects at this level of
assessment, risks exist that may affect the development of the
project. Factors that could pose a risk to the Cañariaco project
include changes in world commodity markets, equity markets, costs
and supply of labour and materials relevant to the mining industry,
extent of resources actually contained in mineral deposits,
geotechnical conditions, actual recoveries achieved in processing
mineralized material, marketing of concentrate, technological
change, water management, local community opposition, environmental
permitting, change in government and changes to regulations
affecting the mining industry.
Qualified Persons and NI 43-101
Technical Report
The 2022 PEA summarized here for the Cañariaco
project was completed by Ausenco Engineering Canada Inc., of
Vancouver British Columbia.
The findings of the 2022 PEA and the Initial
Inferred Resource for Cañariaco Sur will be disclosed in a NI
43-101 Technical Report which will be completed and available on
SEDAR and Candente Copper’s website by March 14, 2022.
The qualified persons for the 2022 PEA and this
News Release are identified below:
Mr. David Thomas, P.Geo. of DKT Geosolutions
Inc. and an independent Qualified Person as set forth by NI 43-10
is responsible for the Cañariaco Norte Mineral Resource estimate
updated in the 2022 PEA.
Mr. Jay Melnyk, P.Eng. Principal Mining Engineer
at AGP Mining Consultants Inc. and an independent Qualified Person
as set forth by NI 43-101, is responsible for mine design and mine
capital and operating costs.
Mr. Kevin Murray, P.Eng. Manager Process
Engineering at Ausenco Engineering Canada Inc. and an independent
Qualified Person as set forth by NI 43-101, is responsible for the
financial model as well as mineral processing and metallurgical
resting, recovery methods, and process and infrastructure capital
and operating costs.
Mr. Scott Elfen, P.E., Global Lead Geotechnical
and Civil Services at Ausenco Engineering Canada Inc. and an
independent Qualified Person as set forth by NI 43-101, is
responsible for the waste management facility and associated
capital and operating costs, and the site-wide water management
design.
Mr. Scott Weston, P.Geo., Vice President of
Business Development at Hemmera Envirochem Inc. and an independent
Qualified Person as set forth by NI 43-101, is responsible for
environmental studies, permitting, and social and community
impacts.
Joanne Freeze, P.Geo., President, CEO and
Director has reviewed and approved the contents of this release for
Candente Copper.
Conference Call
Candente Copper will host a telephone conference
call for investors and analysts on Thursday February 10th, 2022, at
2:00pm EST to discuss the 2022 PEA for the Cañariaco Copper
Project, Peru.
Sean Waller, Director and Joanne Freeze, CEO as
well as Emin Meka from Ausenco will review the report and take
questions.
Details of the conference call, including
call-in numbers and passwords, will be available on the Company
website at www.candentecopper.com.
The conference call will be archived for later
playback and details on how to access it will be available on the
Company website at www.candentecopper.com.
About Candente Copper
The Company’s flagship project is Cañariaco,
within which Cañariaco Norte, is the 10th largest late-stage copper
resource in the world and 6th highest in grade (RFC Ambrian,
December 2021 and Haywood, December 2021). In addition to Cañariaco
Norte, the Cañariaco Project, includes the Cañariaco Sur deposit
and Quebrada Verde prospect, all within a 4km NE-SW trend in
northern Peru’s prolific mining district.
The Company is very pleased to now have
Cañariaco Norte included in 4 research reports that compare various
global copper projects. RFC Ambrian:
Cañariaco Norte in top 10 of 23 projects with potential to involve
third party M&A (December 2021); Haywood:
Cañariaco Norte is one of 18 assets selected as likely to be
considered by majors looking to acquire (December 2021);
Deutsche Bank: Cañariaco Norte identified as one
of 3 projects required to meet the upcoming copper supply-demand
gap (February 2021); Goldman Sachs: Cañariaco
Norte identified with incentive copper price in the lowest quartile
of the top 84 copper projects worldwide (October 2018).
About Ausenco
Ausenco is a global company redefining what's
possible. Its team is based across 26 offices in 14 countries, with
projects in over 80 locations worldwide. Combining their deep
technical expertise with a 30-year track record, Ausenco provides
innovative, value-add consulting and engineering studies and
project delivery, asset operations and maintenance solutions to the
mining & metals, oil & gas and industrial sectors.
This press release contains forward-looking
information within the meaning of Canadian securities laws
(“forward-looking statements”). Forward-looking statements are
typically identified by words such as: believe, expect, anticipate,
intend, estimate, plans, postulate and similar expressions, or are
those, which, by their nature, refer to future events. All
statements that are not statements of historical fact are
forward-looking statements. Forward-looking statements in this
press release include, without limitation: the results of the 2022
PEA, including the projected CapEx, the estimated after-tax NPV and
IRR, the estimated mine life and estimated concentrate grades; the
potential production from and viability of the Cañariaco Project;
the risks and opportunities outlined in the 2022 PEA; the potential
tonnage, grades and content of deposits; the extent of mineral
resource estimates; and estimated production and operating costs.
These forward-looking statements are made as of the date of this
press release. Although the Company believes the forward-looking
statements in this press release are reasonable, it can give no
assurance that the expectations and assumptions in such statements
will prove to be correct. The Company cautions investors that any
forward-looking statements by the Company are not guarantees of
future results or performance, and are subject to risks,
uncertainties, assumptions and other factors which could cause
events or outcomes to differ materially from those expressed or
implied by such forward-looking statements. Such factors and
assumptions include, among others, variations in market conditions;
the nature, quality and quantity of any mineral deposits that may
be located; metal prices; other prices and costs; currency exchange
rates; the Company’s ability to obtain any necessary permits,
consents or authorizations required for its activities; the
Company’s ability to access further funding and produce minerals
from its properties successfully or profitably, to continue its
projected growth, or to be fully able to implement its business
strategies. In addition, there are known and unknown risk factors
which could cause our actual results, performance or achievements
to differ materially from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Known risk factors include risks associated with
exploration and project development; the need for additional
financing; the calculation of mineral resources; operational risks
associated with mining and mineral processing; fluctuations in
metal prices; title matters; government regulation; obtaining and
renewing necessary licenses and permits; environmental liability
and insurance; reliance on key personnel; local community
opposition; currency fluctuations; labour disputes; competition;
dilution; the volatility of our common share price and volume;
future sales of shares by existing shareholders; and other risk
factors described in the Company’s annual information form and
other filings with Canadian securities regulators, which may be
viewed at www.sedar.com. Although we have attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that forward-looking statements
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements. We are under no obligation to update or
alter any forward-looking statements except as required under
applicable securities laws.CAUTIONARY NOTE TO U.S. INVESTORSWe
advise U.S. investors that this news release uses terms defined in
the 2014 edition of the Canadian Institute of Mining, Metallurgy
and Petroleum (CIM) “CIM Definition Standards on Mineral Resources
and Mineral Reserves”, as incorporated by reference in Canadian
National Instrument 43-101 “Standards of Disclosure for Mineral
Projects”, for reporting of mineral resource estimates. These
Canadian standards, including NI 43-101, differ from the
requirements of the United States Securities and Exchange
Commission (SEC) as set forth in the mining disclosure rules under
Regulation S-K 1300. Regulation S-K 1300 uses the same
terminology for mineral resources, but the definitions are not
identical to NI 43-101 and CIM Definition Standards.
Regulation S-K 1300 uses the term “initial assessment” for an
evaluation of potential project economics based on mineral
resources. This study type has some similarities to a
Preliminary Economic Assessment, but the definition and content
requirements of an initial assessment are not identical to the
definition and content requirements for a PEA under NI 43-101.
On behalf of the Board of Candente
Copper Corp.
“Joanne C. Freeze” P.Geo., President, CEO and
Director
For further information please contact:Jonathan
PatersonJonathan.Paterson@HarborAccessllc.com+1 475 455
9401
info@candentecopper.comwww.candentecopper.com
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