🕐15.01.10 - 18:05 Uhr

Baja Confirms Robust Economics at Boleo





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Baja Confirms Robust Economics at Boleo

Update projects 23-year mine life with 25.6% IRR and $1.306 billion NPV

Baja Mining Corp. today announced that an updated capital cost estimate and economic model have confirmed that its 70%-owned Boleo deposit in Baja California Sur, Mexico, can be developed economically at an after-tax internal rate of return (IRR) of 25.6% based on 100% equity. The project, which has a minimum scheduled mine life of 23 years, has a NPV of $1.306 billion using an eight percent discount rate and an average life of mine cash cost of negative $0.29/lb for copper, net of by-product credits. All dollar amounts are stated in U.S. dollars and are on an equity basis (i.e. assume no debt or related finance charges).

Highlights of Boleo project update

Proven and probable reserves for minimum 23-year mine life. Negative $0.29/lb for copper average life of mine cash cost, net of by-product credits. Remaining estimated capital costs of $889 million (including $92.3 million contingency). Average annual production, for the first six years of full production: Copper cathode: 56,697 tonnes Cobalt cathode: 1,708 tonnes Zinc sulphate monohydrate: 25,364 tonnes 265 million tonnes of measured and indicated resources grading 1.50% copper equivalent. 159 million tonnes of inferred resources grading 1.15% copper equivalent. After-tax IRR of 25.6% using SEC guidelines, or 27.9% at current market prices. After-tax NPV (at 8% discount rate) of $1.306 billion using SEC guidelines or $1.473 billion at current market prices.

"We are pleased that the updated capital and operating cost estimates confirm the robust economics of the Boleo project," says Baja President and CEO John Greenslade. "This update now provides a strong foundation for completing construction financing and recommencing construction of the mine and processing facility in order to move to production as soon as possible."

Mr. Greenslade says "there is also significant upside potential for Boleo which is endowed with a rich resource of manganese. We will shortly commence a feasibility study to quantify this potential which could substantially add to the projects value."

The current update incorporates plant capital cost estimates prepared by ICA Fluor Daniel, S. de R.L. de C.V. (ICA Fluor), operating cost estimates prepared by the Company and reviewed by ICA Fluor, and owner�s costs prepared by the Company. A revised geological model, in accordance with NI 43-101, has been prepared by Wardrop, A Tetra Tech Company (Wardrop) and used by Agapito Associates, Inc. (AAI) to prepare the current mine plan. The initial capital cost for the mine was prepared by AAI, however mine sustaining capital and operating costs were prepared by the Company. The Company utilized these cost estimates to prepare the financial projections. In doing so, the capital and operating costs were adjusted to reflect leasing of certain equipment, and to capture costs incurred in the fourth quarter of 2009.An updated NI 43-101 compliant technical report (the �Technical Report�) will be filed within 45 days of today�s date.

Capital Cost Estimate

The total project cost remaining, including Engineering, Procurement, Indirects, Construction Management, Owners Costs, and an 11.6 % overall Contingency, but excluding leased equipment, is $889 Million. A summary of estimated capital costs is listed below:

Capital Cost Breakdown Total Capital to be Spent ($000) Mining & Tailings 68,914 Process Plant 321,033 Site Services & Infrastructure 84,022 Buildings 9,072 Total direct costs 483,041 Construction Indirects & Freight 70,029 EPCM 52,391 Contingency 92,297 Total Construction Costs 697,758 Owners Costs & Pre-development Costs 141,101 Total Cost Before W/C and Financing 838,859 First Fills, Reagents, Spares and Working Capital 50,616 Total Estimated Capital Costs 889,474 Costs, all dollars are third quarter 2009.

Production and Operating Costs

Start-up of the process plant is scheduled for the second half of 2012, based on funding the project during the first half of 2010, in accordance with the following production schedule:

Base Case Production Summary Yrs 11 Yrs 2-7 Yrs 8-10 Yrs
11-13 Yrs
14-20 Yrs
21-23 Ore Treated (kt/y) 2,174 3,100 3,100 3,100 3,100 3,021 Grade: % Cu 2.04 2.02 1.74 1.39 0.91 0.61 % Co 0.074 0.071 0.061 0.070 0.074 0.059 % Zn 0.40 0.47 0.52 0.58 0.62 0.81 % Mn 2.45 2.55 2.58 2.93 3.08 4.95 Production (t/y): Copper 40,221 56,697 49,009 39,161 25,701 17,249 Cobalt 710 1,708 1,481 1,699 1,802 1,398 Zinc Sulphate
Monohydrate 9,027 25,364 28,482 30,469 33,054 36,760

1. Note: year 1 is a ramp-up year and partial year production for cobalt and zinc sulphate monohydrate estimated at 8 months

Unit Operating Costs (expressed in $/tonne of ore treated) Yrs
1 Yrs
2-7 Yrs
8-10 Yrs
11-13 Yrs
14-20 Yrs 21-23e Mining 15.36 14.91 11.89 7.90 8.62 7.47 Process 19.36 18.96 17.87 17.63 17.60 18.45 G&A, Sales 9.70 7.54 7.36 7.07 6.66 6.64 Total ($/t) 44.37 41.41 37.12 32.60 32.87 32.56 Cash cost* $/lb 0.49 (0.04) (0.07) (0.43) (0.80) (0.78) of copper Cash Flow $000/yr 216,002 316,432 233,539 204,462 148,931 97,749

*Cash cost/lb of Cu is net of cobalt, zinc and sulphuric acid credits. Cash flows are after-tax, using Base Case SEC guideline prices of $2.91/lb Cu, $26.85/lb Co and $1,175/tonne ZnSO4�H2O.

Project Economics

Project economics are presented for three cases: 1) Base Case; 2) Case 2 using lower prices; and 3) January 2010 prices. No manganese production is assumed for any of the cases.

1) Base Case:
Base case project economics use the weighted average three-year trailing price (in accordance with SEC guidelines) of $2.91/lb for copper; $26.85/lb for cobalt; and $1,175/tonne for zinc sulphate monohydrate.

2) Case 2:
$2.25/lb for copper; $20/lb for cobalt; and $1,100/tonne for zinc sulphate monohydrate.

3) January 2010 Price Case:
Prices as of January 8, 2010 were $3.40/lb for copper; $21.17/lb for cobalt; and $1,000/tonne for zinc sulphate monohydrate.

Base Prices Case 2 Prices Jan 10 Prices IRR � Pre-tax 28.7% 23.0% 31.2% IRR � After tax 25.6% 20.4% 27.9% NPV* @ 0%



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