Business
Norsemont Initiates Constancia Optimisation
Norsemont Initiates Constancia Optimisation
About this update from Norsemont Mining Inc.
[{"type":"text","content":"\n\n\n\nNov. 18, 2009 (Canada NewsWire Group) -- TORONTO, and LIMA, Peru, Nov. 18 /CNW/ -- Norsemont Mining Inc. (\"the Company\") (TSX: NOM, BVL: NOM) today announced a number of optimisation initiatives at the Company's 100 percent controlled Constancia Copper Project located in southern Peru.The Definitive Feasibility Study (DFS) posted on SEDAR on October 7, 2009 provided a post-tax analysis of the Constancia Project cash flows using a base case copper price of $2.00 per pound as well as alternative cases based on $2.25 per pound and $2.75 per pound. In response to the strong recovery in the copper price and predicted future supply deficits a number of mining analysts in the base metal sector have recently raised their long-term copper price assumptions to the $2.20 - $2.25 range. As a result Norsemont is updating the Constancia Project base case long-term copper price assumption to $2.25 per pound. Under the new base case the Constancia Project has an NPV of $494.2M and IRR of 19.4% with a payback period of 3 years. It is also worth noting that at current market prices of approximately $3.00 Cu, $12 Mo, $18 Ag and $1,130 Au the Constancia Project has an NPV of $1.093 Billion and an IRR 29.5%.The Constancia copper deposit is a large-scale porphyry deposit located in an established mining district in Southern Peru with access to good infrastructure. The recently completed DFS supports the development of a low-cost open pit mine with a nominal 50,000 tonne per day (tpd) sulphide concentrator plant producing high-grade commercial concentrates of copper and molybdenum with throughput up to 76,000 tpd depending on ore type. Silver and a small quantity of gold at payable levels will report to the copper concentrate.Norsemont has commenced a number of optimisation initiatives at the Constancia Project which are designed to increase the global resource as well as improve the previously stated economics under the recently completed DFS. These initiatives include the following:Mine Site ExplorationMine site exploration, initially utilizing two diamond drill rigs, is currently underway on a series of recent discoveries in close proximity to the Constancia deposit. The exploration program is currently targeting the high-grade Pampacancha skarn and porphyry system. Further drilling on other targets will commence in the near future as add...