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Finance |
MRDL, 90 Colney Lane, Cringleford, Norwich, Norfolk NR4 7RG, UK
In recent years Chile has become the focus of activity for many multinational mineral resource companies. Undeniably they are attracted by the geological potential, business/investment rules and lifestyle, all of which are excellent by most standards.
In view of the continued interest in Chile a detailed profile of 36 gold and 27 copper projects and advanced prospects was prepared from a number of public sources of data. From this list a representative selection of about 10 projects was made and the costs associated with those projects were reviewed and evaluated. Based on the data a modest reserve containing 31 tonne (1 M oz) of gold might be discovered in Chile at a cost of US$ 225 kg–1 Au (US$7 oz–1) or acquired for US$ 772 kg–1 Au (US$24 oz–1) and then a mine constructed for US$ 1522 kg–1 Au (US$ 47 oz–1). The total average cost taken from initial reconnaissance to start-up of the mine is equivalent to US$ 25 723 kg–1 gold per year (800 oz–1 Au per year). Historically a medium-sized copper deposit in Chile containing 1 M t of fine copper might have been discovered for US$ 6.5 t–1 Cu (0.3 US cents lb–1) or acquired for US$ 10.3 t–1 Cu (0.5 US cents lb–1) and then constructed for US$ 64 t–1 Cu (2.9 US cents lb–1) Cu). The total cost to mine start-up is equivalent to US$ 3969 t–1 Cu per year (US$ 1.80 lb–1 Cu per year). The recent purchases by Emablos/Minorco of one-third of Collahuasi and Placer of 500f Zaldivar have increased the prices paid to acquire copper resources to US$ 60 and US$ 93 t–1 Cu in situ (2.7 to 4.2 US cents lb–1) respectively. On the basis of the above figures, the cost of acquiring a gold project in Chile is typically equivalent to US$ 24 oz–1 or 7.30f the price of gold at US$ 330 per ounce. Copper project acquisitions previously averaged the equivalent of 0.50f the price of copper at 95 US cents per lb, but this has reached 4.5% with the price paid for Zaldivar. These guideline values have been prepared to give explorationists, acquirers and developers useful empirical guidelines to help them to decide whether they have the budget to consider entry to Chile or whether to look elsewhere.
