One of Vancouver’s fastest-growing companies has unveiled a billion-dollar plan to build a copper mine in Chile just four months after announcing a deal to acquire the property.
On Tuesday, locally headquartered Capstone Mining (TSX:CS) issued pre-feasibility study (PFS) results for the Santo Domingo iron oxide-copper-gold project, which it acquired from Far West Mining in a $725 million deal announced in April.
The study revealed a project that would cost approximately US$1.24 billion to build, but would produce 144 million pounds of copper, 4.1 million tonnes of iron and 15,000 ounces of gold on average per year once in production.
Capstone said its strategic partnership with Korea Resources Corp. (KORES), which it formed via the Far West deal, means off-take agreements are already in place for half of the copper and iron production from the proposed mine.
“The positive Santo Domingo PFS has met our economic expectations,” commented Darren Pylot, president and CEO of Capstone.
“With the buoyancy in the copper market and strong demand for the by-product iron production, we intend to advance this project towards production.”
He added the company’s US$507 million cash balance and a commitment from KORES to arrange debt financing for 65% of the capital costs of Santo Domingo means Capstone can “move forward rapidly” on the project.
The local company, which already operates two mines in Yukon and Mexico, has seen its revenue grow 78,467% to $310 million in 2010 compared with 2006.
Business in Vancouver last caught up with Capstone in April when it announced the deal to acquire Far West. (See “Chilean copper drives Capstone to buy Far West” – BIV Business Today, April 18.)
At press time, Capstone’s shares were down $0.14 to $3.09.
Joel McKay
Twitter:jmckaybiv