Oroco Announces 22.2% After-tax IRR and $1.48 Billion NPV for Santo Tomas Project
Oroco Resource Corporation (“Oroco” or the “Company”) (TSXV: OCO; OTCQB: ORRCF, BF: OR6) has released a revised Preliminary Economic Assessment (“PEA”) along with an updated Mineral Resource Estimate (“MRE”) for both the North Zone and South Zone of its Santo Tomas Porphyry Copper Project. The PEA outlines a phased approach for an open pit mine and processing plant, starting with a production capacity of 60,000 tonnes per day (t/d) in the first year and ramping up to 120,000 t/d by year eight, over a projected 22.6-year Life of Mine (“LOM”). Before production begins, there will be two years dedicated to construction and one year for pre-stripping. Ausenco Engineering USA South Inc. prepared the PEA, while the updated MRE and geological model were developed by SRK Consulting (U.S.), Inc. and SRK Consulting (Canada) Inc.
Key Highlights from the Revised PEA
Some of the most notable highlights from the revised PEA include:
- NPV (8%) of US$2.64 billion pre-tax and US$1.48 billion post-tax.
- IRR of 30.3% pre-tax and 22.2% post-tax.
- Total LOM payable copper production estimated at 4,774 million pounds.
- Payback period of 2.9 years pre-tax and 3.8 years post-tax from the start of concentrate production.
- Initial capital costs projected at US$1,103.5 million, with sustaining and expansion capital costs estimated at US$1,734.1 million.
- Annual LOM C1 Cash Cost of US$1.54/lb Cu on a by-product basis.
- Average CuEq grade of 0.51% during the first seven years of production.
- Capital efficiency ratio (NPV / Initial Capital Cost) of 1.34.
- Total mineralized material to be mined is 825.5 million tonnes.
Insights from the CEO on the Updated PEA
CEO Richard Lock shared his thoughts, stating, “When we completed the initial PEA, it became evident that there was more value to be realized at Santo Tomas. After thorough analysis, we found that a staged expansion approach and focusing on the higher-grade near-surface materials in the early mining years significantly increased the project's value. Our plan allows us to maintain a higher-grade feed profile, postponing the need for an expansion until year eight. We expect Copper Equivalent production in the first seven years to reach 1.34 billion pounds, with an average Mill Feed grade of 0.51% Cu Eq.”
Significant Economic Potential
This analysis positions Santo Tomas as one of the most capital-efficient, large-scale, low-cost copper projects globally.
Overview of the Project
The Santo Tomas property spans 9,034 hectares of mineral concessions, showcasing significant porphyry copper mineralization. The PEA was based on data from 68 diamond drill holes, totaling 43,063 meters, and incorporated both historical and recent drilling information. The historical exploration has provided robust data, aiding in the projection of potential value.
Assumptions on Commodity Prices
For the Discounted Cash Flow (DCF) analysis, the following commodity price assumptions were made: Cu at US$4.00/lb, Mo at US$15.00/lb, Au at US$1,900/t.oz, and Ag at US$24.00/t.oz. Ausenco's DCF analysis anticipates substantial returns based on these figures.
Looking Ahead: Future Opportunities
Future opportunities for the project include infill resource drilling, further studies on comminution, and evaluating various process designs to enhance project outcomes. The company is committed to engaging with local communities and is focused on minimizing environmental impacts associated with the project.
About the Company
Oroco holds an 85.5% net interest in the core concessions of the Santo Tomas Project, backed by a comprehensive drilling and resource evaluation program that positions it favorably in the global copper market.
Contact Information
For more information, please reach out to:
Richard Lock, CEO
Oroco Resource Corporation
Tel: 604-688-6200
Email: info@orocoresourcecorp.com
Frequently Asked Questions
What is the IRR and NPV for Oroco's Santo Tomas Project?
The IRR is 22.2% post-tax, and the NPV is $1.48 billion post-tax.
Who prepared the PEA for the Santo Tomas Project?
The PEA was prepared by Ausenco Engineering USA South Inc.
What is the expected production capacity of the mine?
The mine is designed to achieve a production capacity of 60,000 tonnes per day, increasing to 120,000 tonnes per day over time.
What are the planned capital costs for the project?
Initial capital costs are estimated at US$1,103.5 million, with sustaining and expansion capital costs estimated at US$1,734.1 million.
How does Oroco engage with local communities regarding the project?
Oroco maintains transparent communications with local communities to address concerns and share information about the project status and plans.
