Capstone Mining announced positive results for a prefeasibility study (PFS) of the Santo Domingo iron oxide-copper-gold project in Region III, Chile. The project is owned 70% by Capstone and 30% by Korea Resources Corp. (KORES). The PFS considers an 18-year mine life at average annual production of 144 million lb of copper, 4.1 million mt of iron concentrate, and 15,000 oz of gold. During the first five years of operation, copper production will average 255 million lb/y.

Life-of-mine total cash production costs are estimated at $0.11/lb of payable copper, net of magnetite iron and gold by-product credits and selling costs. Total capital costs are estimated at $1.24 billion. Life-of-mine off-take agreements at market pricing are committed for 50% of the copper and 50% of the iron concentrate as part of Capstone's partnership with KORES.

The Santo Domingo project is located 130 km north-northeast of Copiapó, Chile, near the town of Diego de Almagro. The life-of-mine open-pit probable reserve totals 418 million mt, grading 0.32% copper, 0.04 g/mt gold and 27.6% iron.

The copper and magnetite recovery plant and associated service facilities will process run-of-mine ore through conventional crushing and grinding, copper flotation in seawater, and magnetite recovery from copper rougher tailings. Copper and magnetite concentrates will be thickened on site prior to being pumped via a concentrate pipeline to the port.

Mill throughput will vary from 70,000 mt/d during the first five years of production to 60,000 mt/d in later years. Metal recoveries for copper and gold are 88.7% and 46%, respectively, averaged over the mine life. Iron recoveries vary directly with the mineralogy of the iron present in the ore. Testing indicates production of a magnetite concentrate grading 65% iron can be maintained throughout the life of the project.

Due to a scarcity of fresh water, the project will be designed to use seawater, which will be brought to the site via pipeline from the coast.

A project implementation schedule has been developed for a feasibility study, with additional test work and engineering to be followed by procurement and construction of the process plant, related facilities, and infrastructure. Commissioning is currently planned for late-2015. The critical long-lead items for the plant are the grinding mills. Delivery times for SAG and ball mills are currently forecast to be in excess of 18 months from manufacture to delivery at port of export.