In 2015, CBL completed a Pre-Feasibility Study (PFS) in order to prove up the potential of the Chañaral Bay project. The PFS looked at all aspects of the project including:
As part of the PFS, a drilling campaign of 1,246 holes with an average depth of 9.2m was conducted on the beach in Chañaral – see video below. The results from this drilling, together with historical drill data from the beach, were used to estimate a resource of 51Mt at 0.24% Cu. This estimate was prepared in accordance with the JORC Code (2012) guidelines by Wardell Armstrong International.
The above resource only covers the Chañaral beach area and there is potential upside at Chañaral to increase this resource significantly through the future inclusion of a similar amount of additional mineralised material in the surf and bay zones covered by existing licences held by Copper Bay.
Metallurgical test work indicated that the most effective means of extracting the copper from the tailings is by initial acid leach to produce a copper cathode product followed by froth flotation of the leach tails to produce a clean copper concentrate. Indicative metallurgical recovery from the PFS test work is 72.8%.
Dredged material will be fed to the plant and will result in annual copper production of 8,600 tonnes, comprising 6,200tpa cathode and 2,400tpa copper in concentrate. The reported resource in the beach area would be sufficient for a mine life of 9 years.
Environmental and social baseline studies commenced over 12 months ago and will continue throughout the next 18 months. The Chañaral area is well known in Chile for the adverse environmental impact caused by the historical deposition of tailings into the bay and beach zone and, due to the reclamation of these tailings the Project is strongly supported by the local community and also at national level.
Project economics are based on the mineral resources estimated on the beach and do not consider the material that may be identified in the surf and bay zone, and a preliminary capital expenditure estimate of US$88 million. Estimated C1 cash costs of operation are US$1.34/lb with a project NPV at 8% discount rate of approximately US$50 million after tax, with an IRR of 21% based on a long term copper price of US$3/lb. Future exploitation of the surf and bay zones may provide significant economic upside to the Chañaral Project.