Catalyst Copper Corporation saw its shares move higher after announcing results from a preliminary economic assessment of its La Verde project in Mexico.
The NI 43-101 report, done by AMC Mining Consultants, projected pre tax net present value of USD 617 million at an 8% discount rate with a pre tax 21.2% internal rate of return. The base case scenario used a copper price of USD 2.70 per pound, a gold price of USD 1,200 an ounce and a silver price of USD 25 an ounce.
The report assumes a processing rate of 30 million tonnes per year, with life of mine production projected at 4.22 billion pounds of contained copper in concentrate, and 7.17 million tonnes of concentrate at a grade of 26.7% copper.
The 20 year mine plan foresees average life of mine mining costs at USD 1.70 per tonne mined or between USD 1.17 to USD 1.20 for years one to seven. Pre production capital is estimated at USD 1.16 billion with pre tax undiscounted cash flow seen at USD 1.63 billion.
The company cautioned that further drilling, metallurgical studies and geological mapping and investigations will be required to enhance the confidence level in the property's resources.
The La Verde PEA mine plan is envisioned as a conventional truck and shovel open pit mining operation, based on an average yearly mining rate of 102 million tonnes.
La Verde has power, rail and water all across the property with Lazaro Cardenas, Mexico's third largest port on the Pacific Ocean, 180 kilometers from the site. Significant upside potential also remains for the two known zones of porphyry style copper, gold and molybdenum mineralization, the company said as the 2012 drill program has shown both deposits remain open to depth and along strike.
The asset is subject to an option agreement with a Mexican subsidiary of Teck Resources under which Catalyst can earn 60% interest in La Verde by making USD 10.0 million in exploration expenses by December 31st 2012.