Aqua RicaYamana reports February 13th
A 28 year mine life...
Agua Rica, Argentina
During the year, the Company announced an integration agreement with Glencore International AG and Newmont Corporation (collectively the “Parties”), pursuant to which the Agua Rica project would be developed and operated using the existing infrastructure and facilities of Minera Alumbrera Limited (“Alumbrera”) in the Catamarca Province of Argentina. The Company would own 56% of the integrated project. The Parties established a Technical Committee to direct the advancement of the Integrated Project.
The integration is expected to significantly de-risk the development of Agua Rica due to the ability to rely on the current Alumbrera plant and infrastructure. The Integrated Project is also expected to generate significant synergies by bringing together the extensive mineral reserves of Agua Rica with the existing infrastructure of Alumbrera to create a unique, high-quality, low-risk brownfield project with an optimized environmental footprint that is expected to bring significant value to shareholders, local communities and stakeholders.
On July 19, 2019, the Company announced positive PFS results that underscored Agua Rica as a long-life, low-cost project with robust economics and opportunities to realize further value, including the opportunity to convert economic-grade inferred mineral resources and expanding throughput scenarios to increase metal production and returns, among other opportunities.
The PFS highlights include a long mine life of 28 years, annual production for the first 10 full years increased to 533 million pounds of copper equivalent(i) production, cash costs(5) decreased to $1.29 per pound, AISC(5) decreased to $1.52 per pound for the first ten years of production, net present value increased to $1.935 billion and an increased internal rate of return of 19.7%(ii). Furthermore, proven and probable copper mineral reserves increased by 21% from year-end 2018 to 11.8 billion pounds and gold mineral reserves increased by 13% to 7.4 million ounces.
The Company believes Agua Rica represents one of the lowest capital intensity copper development projects in the world, with capital intensity measured based on the amount of copper produced and the amount of copper in the ground.
- Copper equivalent metal includes copper with gold, molybdenum, and silver converted to copper-equivalent metal based on the following metal price assumptions: $6,614 per tonne of copper ($3 per pound), $1,250 per ounce for gold, $24,250 per tonne for molybdenum, and $18.00 per ounce for silver.
- Assuming metal prices of $3.00 per pound of copper, $1,300 per ounce of gold price, $18.00 per ounce of silver, $11.00 per pound of molybdenum and using an 8% discount rate.