St. Augustine advances on PFS results for Philippines copper-gold project
St. Augustine Gold and Copper Ltd. [SAU-TSX] has announced the results of a preliminary feasibility study at the King-king copper-gold project located in the Philippines. The updated pre-feasibility study allows the company to initiate work on a definitive feasibility study and expedite the start of construction.
St. Augustine shares advanced on the news, rising 11.1% or $0.055 to 55 cents. The shares trade in a 52-week range of 60 cents and $0.60 and $0.065.
Following recent delays due to regulatory restrictions and COVID-19, the company is working to complete the requirements to secure the renewal of the Mineral Processing Permit (MPP).
“The results of the PFS demonstrate extremely robust economics, generating an estimated post-tax net present value of $4.18 billion and an internal rate of return of 34.2%.,” the company said in a press release. The project is expected to produce copper net of by-product credits at one of the lowest rates of any operation worldwide.
The initial capital cost is estimated at $2.37 billion. Sustaining capital is estimated at $798.4 million.
“The update to the pre-feasibility study for Kingking is a long-awaited milestone for our shareholders, especially in the context of recent changes to the Philippines mining regulatory structure which have paved the way for a world class project development,” said St. Augustine Chief Operating Officer Michael Regino. “The benefit of the project to the Philippine economy as well as the local communities cannot be overstated,” he said.
Regino went on to say that the first five years of King-king gold production will make it one of the top 25 worldwide gold producers at more than 330,000 ounces per year, excluding its substantial copper production. “The combined copper and gold production brings King-king into the top 10 copper producing mines on a copper equivalent basis at more than 204,000 equivalent tonnes per year,” he said.
Total life of mine metal production for the dual processing case (heap leach and mill) is estimated at 4.4 billion pounds of copper, (2.0 million tonnes), and 6.9 million ounces of gold. That material will be produced over a 38-year mine/process life, with cash costs of US$2.06 per equivalent pound of copper and cash costs of US$0.32 per pound of copper net of gold credits.
The proposed open pit mine and processing plant will produce copper/gold concentrate, copper cathode, and gold Dore bullion. Ore will be transported from the primary crusher located near the mine to the mill and heap leach area by aerial conveyor.
Higher-grade oxide dominant ore containing above cutoff grade gold and all sulphide ore will be treated in a concentrator at 60,000 tonnes per day. Oxide ore containing little or no gold, below cut-off grade, will be treated in heap leach at 40,000 tonnes per day.
The study is based on proven and probable reserves of 848.9 million tonnes of 0.26% copper, 0.36 g/t gold or 4.8 billion pounds of copper and 9,771,000 ounces of gold.