Northern Orion Resources Inc.Alumbera
Northern Orion Resources Inc. has a 12.5% stake in the Bajo de Alumbrera, one of the world's largest copper and gold mining operations, located in northwest Argentina. The 2006 forecasts for Alumbrera are 400 million pounds of copper and 600,000 ounces of gold. Proven & Probable reserves for Alumbrera are 400 million tonnes at 0.45% copper and 0.49 g/T of gold. The on-site production machinery is capable of processing 100,000 tonnes of primary ore per day.
The 2006 Q2 net earnings per share were $0.18 based on 181,062,000 shares fully diluted. As of June 30, 2006, Northern Orion had cash position including temporary investments of US$172,425,000.
Agua Rica
Northern Orion's 100% owned Agua Rica project is a massive copper-gold deposit located 34km from Alumbrera. It has a drill defined metal inventory of 21.8 billion pounds of copper, 13.3 million ounces of gold and 1.7 billion pounds of molybdenum. Agua Rica has potential for future expansion as it remains open at depth and along two sides.
This puts Agua Rica in the same league as other world-class large copper deposits such as Ivanhoe/Rio Tinto's joint venture on the Oyu Tolga deposit in Mongolia, Peru Copper's Toromocho project in Peru, and Northern Dynasty's Pebble East deposit in Alaska.
Most of the resource is located near the surface, allowing for cost-effective open pit mining. Preliminary findings suggest that Agua Rica will be a very low cost copper producer (possibly even negative based on gold and molybdenum credits). The estimated mine life is 23 years with an overall capital cost of US$1.9 billion.
The proposed 90,000T/Day mill should produce 150,000 tonnes of copper annually, along with associated gold and molybdenum by-products. Using US$435 for gold and US$7 per pound of molybdenum the cash cost of copper would be US$0.09 per pound! Based on US$635 gold and US$26 molybdenum the cash cost would be negative US$1.05 per pound of copper!
Disclaimer: The opinions expressed above are not intended to be taken as investment advice. It is to be taken as opinion only and I encourage you to complete your own due diligence when making an investment decision. I personally own shares of NNO.