Resource World Magazine

44 www.resourceworld.com j u n e / j u l y 2 0 1 5 miNiNg T he focus on Panoro Minerals Ltd. [PML-TSXV] over the past few years has been on its wholly-owned Cotabambas copper, gold, silver project situated 48 km south west of the city of Cuzco in Southern Peru. The company recently tabled a positive Preliminary Economic Assessment (PEA) on this project which was based on a con- ventional open pit mining and flotation process design with a throughput of 80,000 tonnes per day. Based on this scenario, the project was estimated to have an initial capital cost of US $1.38 billion including contingencies and a mine life of 19 years. The project still has excellent potential for the discovery of additional mineralization. Economically speaking, the pre-tax Net Present Value (NPV) based on a 7.5% discount rate, came in at US $981.7 million with an Internal Rate of Return (IRR) of 17.3% with an estimated pay- back of 3.6 years. The after-tax NPV(7.5%) was US $627.5 million with an IRR of 14.4% and a payback of 4.0 years. The financial analysis was based on a copper price of US $3.25/ lb. and estimated that the mine would produce on average 143.4 million lbs of payable copper annually. In addition, 88,000 ounces of payable gold and 967,200 ounces of payable silver would be recovered in the process on an annual basis. Average direct costs to produce one pound of copper was estimated to be US $1.26, net of by-product credits. "We are pleased with the results of the PEA which demon- strate that the Cotabambas Project should be advanced along the road to development," said Luquman Shaheen, President and CEO of Panoro Minerals. Prior to October 2012, the Cotabambas Project contained a small inferred resource and had seen less than 10,000 metres of exploration drilling completed on it. Over the past three years, through a very difficult down-turn in the mining market, Panoro was able to significantly increase the resource and ultimately dem- onstrate the potential positive economics for the project via the recent PEA. The subset of resources contained within the Azulccaca and Ccalla pits included in the PEA mine plan is 136.7 million tonnes averaging 0.35% copper, 0.20 g/t gold and 2.5 g/t silver. These are classified as indicated mineral resources. An additional 397.1 mil- lion tonnes of material averaging 0.28% copper, 0.16 g/t gold and 2.21 g/t silver is classified as inferred resources. Copper oxide resources are also present in the deposit but met- allurgical studies to date have shown that copper recovery from this material is too low and there is currently insufficient tonnage outlined to warrant a separate heap-leach and SX/EW circuit. Molybdenum is also present in the deposit; however, it was not included in the current economic assessment since it will require producing a separate concentrate. The company states that it will evaluate the inclusion of molybdenum in subsequent studies. The PEA envisions mill feed coming from two open pits, dubbed Ccalla and Azulccaca. Mineralized material will first be mined from the larger Ccalla open pit and then from the Azulccaca pit. Conventional truck and shovel mining will feed the processing plant located half a km from the Ccalla pit limits. The life-of-mine waste/mill feed strip ratio is 1.03:1. Most of the waste rock will be crushed and delivered to a waste rock storage area by conveyor through a 1 km-long tunnel. The final flotation concentrate will contain copper, gold and silver and is free of deleterious elements. The concentrate will be transported by truck to the Matarani seaport in Arequipa along existing road networks. Power will be supplied via a 60-km power line connected to the national grid in the town of Abancay, northwest of the Cotabambas Project. Panoro reports that there are numerous opportunities for proj- ect growth and economic enhancements. Specifically: • Copper and gold oxide material can be stockpiled for future pro- Drilling at the Panoro Minerals Cotabambas copper-gold-silver project 48 km southwest Cuzco, Southern Peru. Photo courtesy Panoro Minerals Ltd. Perseverance pays off as Panoro moves forward in Peru by Thomas Schuster

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