Cyprium Metals Ltd (ASX:CYM, OTC:CYPMF) has released a robust pre-feasibility study (PFS) for the Nifty Copper Complex in Western Australia, which confirms the economic value of redeveloping the project to produce copper concentrate on a large scale.
Foundational work
“The successful completion of this comprehensive PFS marks a pivotal milestone for Cyprium,” executive chair Matt Fifield said.
“This is important, foundational work that we will build on.”
The PFS contemplates the refurbishment and expansion of Nifty’s brownfield concentrator and accompanying new surface mine.
It confirms the economics of producing copper cathode by re-treating Nifty’s Heap Leach Pads 1-6 (Initial Cathode Project) which is a subset of oxide opportunities.
This PFS supports the first ore reserve estimate (ORE) to be published on the Concentrate Project and Initial Cathode Project.
Key findings
The study forecasts life-of-mine (LOM) production of 718,000 tonnes of copper, with average annual output of 37,300 tonnes per annum during the first decade.
At an assumed long-term copper price of A$13,253 per tonne, the project is expected to generate gross revenues of A$9.2 billion, with earnings before interest, taxes, depreciation and amortisation (EBITDA) of A$4 billion and pre-tax cash flow of A$3.1 billion. Operating costs are estimated at US$2.39 per pound.
The project involves brownfield redevelopment costs of A$458 million, representing 2.3 times the average EBITDA over the first 10 years of production.
This includes A$239 million to refurbish and expand the concentrator and upgrade infrastructure, and A$189 million in operating costs to be capitalised.
An additional A$30 million will fund a smaller-scale cathode project, bringing total cathode-related costs to A$46 million.
Economic indicators are robust, with a pre-tax net present value (NPV) of A$1.13 billion (A$756 million after tax) and a pre-tax internal rate of return (IRR) of 28.9% (23.6% after tax).
On the resource side, the Concentrate Project boasts ore reserves of 83 million tonnes at 0.90% copper, containing 753,000 tonnes of copper.
The Cathode Project adds an additional 10.6 million tonnes at 0.41% copper, equating to 44,000 tonnes of contained metal.
Permits secured
With all major permits already secured and only requiring updates to reflect the PFS outcomes, the project is well-positioned for development, offering significant potential for strong financial returns and operational efficiencies.
“The PFS highlights the long duration and immense profitability of Nifty’s Concentrate Project,” Fifield said.
“With 797,000 tonnes of copper in total reserve supporting more than $3 billion of pre-tax cash flow, Nifty is a large and important copper source and economic engine for Australia.
“There are few near-term copper development opportunities that present the scale, longevity and positive economics of Nifty’s Concentrate Project, and really none that have the speed and cost advantages of a permitted brownfield site and access to Western Australia’s world-class supply chain.
“The important information in this PFS serves as a strategic foundation for our forward activities as we move towards project execution.”