Canadian explorer Oroco Resource Corporation says a positive preliminary economic assessment (PEA) on a proposed US$1.34 billion openpit copper project in northwestern Mexico paves the way for more work.
Oroco CEO Richard Lock said PEA work by engineering and consulting heavyweights, Ausenco and SRK (resources), was “a significant start to the process of evaluating Santo Tomas”, a low-grade porphyry deposit in mountainous country not far from Jinchuan Group’s Bahuerachi copper mine, Fuerte River tributaries and the Huites Reservoir.
“The combination of excellent infrastructure, simple metallurgy, a cohesive and consistent grade distribution, and a low strip ratio, along with the identification of several existing opportunities for resource expansion, provide additional strength and certainty to the project,” Lock said.
“We have also identified a high probability of additional upside in project economics through the future application of mine and process design improvements, all of which confirm that we have a substantial resource at Santo Tomas.”
Oroco has outlined indicated and inferred resources of 561 million tonnes grading 0.37% copper-equivalent and 549Mt at 0.34% Cu-eq, respectively, including molybdenum, gold and silver credits.
The company has added about 50,000m of diamond drilling since 2021 to earlier diamond and RC drilling totalling some 30,000m.
Ausenco assessed a circa-20-year mine and 40Mtpa plant (from year two) producing about 4750 million pounds of payable copper at an average life-of-mine C1 cash cost of US$1.66/lb net of by-products. The engineering group modelled an after-tax payback period of five years, with after-tax NPV (8% discount rate) at US$1.24 billion and IRR at 17.3%.
The PEA assessed high pressure grinding roll ore crushing as well as inpit crushing and conveying via tunnels to stockpile areas.
Hydroelectric power supply could come from the downstream Huites hydroelectric plant or a new combined-cycle gas turbine plant near the Huites power station and Texas-Sinaloa natural gas pipeline.
“Both options represent low carbon footprint power sources for the estimated power requirements at similar costs,” Oroco said.
Ongoing project studies will look at the use of sulphide leaching on lower-grade chalcopyrite resources currently assigned to waste, and an SX/EW facility. Mixed-fuel and electric, large-scale mining equipment will also be assessed.
Oroco says it will investigate coarse particle flotation to reduce comminution costs and improve factors of safety on tailings storage facility (TSF) design.
Toronto-listed Oroco has a current market value around C$145 million.