Northern Peru Copper may develop Galeno as mine
Although Northern Peru Copper only announced Tuesday the results of its Preliminary Economic Assessment for the Galeno copper/gold/silver/moly project in Peru, the project has already captured the attention of international mining companies and metals analysts.
The study, which was completed by Samuel Engineering Associate Raymond R. Hyyppa, P.E., revealed a considerable level of detail and data, which has analysts and institutional investors already pushing for the sale of the project before it reaches the feasibility stage. As Northern Peru Vice President of Development David Strang noted during a conference call with analysts Tuesday, Galeno appears to offer “more robust economics that we certainly first expected.”
Galeno is at the exploration stage, meaning that the study was primarily aimed at establishing “an independent and very credible database for the project,” principal shareholder Ross Beaty told analysts during a Tuesday conference call. Strang declared, however, that since no fatal project flaws have been found this far, “there’s nothing that we have seen today that would stop this project getting to the sales position.” Strang called it a “great project for a mining company that is willing to acquire it.
Beaty, however, insisted that, although the direct sale of Galeno was originally in the Northern Peru business plan, such talk is now “very hypothetical and very premature.” A geologist and mining entrepreneur, Beaty, the founder of Pan American Silver, warned that–although there are “a number of mining companies that are keenly watching our progress,” and have visited the property–he is seriously considering developing El Galeno as a joint venture, rather than selling the property to another company. The property is adjacent to Newmont’s Yanacocha gold mine, the largest gold operation in South America.
Hyyppa’s study suggested a 20.7-year minelife for the $853-million project, which would involve a project payback of 3.1 years. Projected average copper-in-concentrate production is estimated at 144,000 tonnes per year. Annual by-product production would average 43,000 ounces of gold, 2 million ounces of silver and 1,900 tonnes of molybdenum.
Northern Peru President and CEO Marshal Koval explained that results from 23 new drill holes were not included in Samuel Engineering’s assessment, but will be added to the project geologic model in a month. Meanwhile, a pre-feasibility study is underway and is anticipated to be completed late this year.
Koval, an expert in mine permitting and the mitigation of mining environmental and social impacts, said he doesn’t anticipate any local community opposition to the project although neighboring Yanacocha has been targeted by numerous protests over its mine life. Currently, the Vancouver-based junior offers 71 permanent jobs to members of nearby local communities. As many as 300 local people have worked at the project thus far, he added.
If developed as a mine, Galeno is expected to offer 665 permanent jobs and 2,290 jobs during its two-year construction period. It is estimated that it will yield $1.2 billion in taxes, government royalties, and employee profit sharing payments.
Northern Peru Copper (CA:NOC) has provided services to local schools, provide medical services at the project site, and supplies emergency medical response services to nearby communities, according to Koval. Northern Peru is also helped to fund studies and help implement irrigation improvements in the area. It also employs a part-time anthropologist and a nurse who also work in nearby communities.