LONDON (Alliance News) - Bezant Resources PLC saw its shares jump Wednesday after it said a financial and technical review of the historic conceptual study at its Mankayan project had improved the economic feasibility of the project, making its search for a potential buyer or partner for the project easier.
In a statement, the copper and gold explorer operating in the Philippines and Argentina said a supplementary report by Mining Plus Pty Ltd has remodelled and investigated the original mine design, mine schedule, cave footprint and cost estimations and incorporated revised estimates in an updated financial model.
It said it had identified a USD307 million potential cost reduction compared with the original 2011 study, based on a change in mine design to a decline access plus conveyor decline for material haulage from the previous decline and shaft haulage configuration.
The new report for the copper and gold project in the Philippines also recommended an up to 20 million tonnes a year block caving operation over an estimated 28 year mine life.
It said at current metals prices - USD3.00 per pound of copper and USD1,250 per ounce of gold - and a production rate of 20 million tonnes a year, the project returns an estimated post-tax net present value of about USD739 million at an 8% discount rate, a total post-tax net cashflow of about USD3.7 billion and a post-tax internal rate of return of 21%.
The report also estimates total costs of US$17.31 per ore tonne, at a production rate of 20 million tonnes a year, inclusive of all royalties, taxes, capital costs, equipment ownership, operating and processing costs, and administrative and technical services costs. Total capital infrastructure costs are estimated at approximately USD1 billion over the duration of the project.
The report also indicates that an estimated additional 80 million tonnes can be generated through improvements in the mine schedule and change in the cave column heights.
Mining Plus recommended that additional studies are undertaken to further investigate production levels of more than 20 million tonnes a year and optimisation of the mine design.
"The generation of these revised cost estimates and updated financial model in respect of the 2011 scoping study will facilitate our ongoing potential sale/JV discussions with third parties interested in progressing our Mankayan project," Chief Executive Bernard Olivier said in a statement.
Bezant Resources shares were up 79.4% at 7.40 pence early Wednesday.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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Bezant Res (BZT)