Santo Tomás Project Overview
Santo Tomás hosts a large, outcropping porphyry copper deposit comprised of fracture-hosted and disseminated Cu and Mo sulphides with significant Au and Ag credits. The Project lies within the Laramide Belt, a NW-SE trending copper belt extending from southwestern USA into southern Mexico that includes numerous world-class copper deposits, including the Cananea district, which hosts one of the largest copper deposits in the world.
Oroco’s Santo Tomás Project is located at low elevation in the municipality of Choix adjacent to the Fuerte River, in the western Sierra Madre mountain range. The project straddles the border between the Mexican States of Sinaloa and Chihuahua. Santo Tomás is situated within the infrastructure rich “La Entrada al Pacífico,” a multi-modal transport and trade corridor recognized by the US and Mexican federal governments. Proximal infrastructure includes the deep-water port of Topolobampo, located 160km to the south-west, connected by sealed roads, a rail line, high voltage power supply, and a high-pressure gas pipeline, all within 20km or less of Santo Tomás. The region is home to numerous mining operations and has a strong regional mining culture and highly supportive local community.
Preliminary Economic Assessment (PEA)
Following a 48,500 m (76 hole) diamond drill program, completed in Q1 2023, and a Mineral Resource Estimate (“MRE”) published in May 2023, in October 2023 Oroco released an updated Mineral Resource Estimate and a maiden Preliminary Economic Assessment (“PEA”) for Santo Tomás. The PEA results support a staged open pit mine and processing plant starting at 60,000 tonnes per day (“t/d”) in year 1 of production, expanding to 120,000 t/d in year 2 over a 20.1-year Life of Mine (“LOM”). Production is preceded by two years of construction and pre-stripping. The PEA was prepared by Ausenco Engineering USA South Inc. (“Ausenco”). The updated MRE and geologic model were prepared by SRK Consulting (US), Inc. of Denver, Colorado and SRK Consulting (Canada), Vancouver, BC (“SRK”). SRK (Canada) was responsible for geotechnical modeling. The mine planning and mine costs components of the PEA were prepared by Mining Plus Canada Consulting Ltd. (“Mining Plus”).
Highlights of the Santo Tomas PEA include:
- US$2.33 billion pre-tax NPV (8%) and US$1.24 billion after-tax NPV (8%)
- 23.0% pre-tax IRR; 17.3% after-tax IRR.
- Total LOM payable copper production of 4,749 M lb.
- Pre-tax payback of 4.1 years; after-tax payback of 5.0 years from first concentrate production.
- Initial capital costs estimated at US$1,339.9 million; sustaining and expansion capital costs estimated at US$1,134.5 million.
- Average annual LOM C1 Cash Cost of US$1.66/lb Cu on by-product basis.
- An ultimate pit design constrained resource of 388 Mt of Indicated and 460 Mt of Inferred material.
PEA DCF Price Assumptions; Cu US $ / lb 3.85, Mo US $/lb 13.50, Au US $/oz 1,700, Ag US$/oz. 22.50
The Full Technical Report may be downloaded HERE.
Commenting on the PEA, Richard Lock stated: “This is a significant start to the process of evaluating Santo Tomas. The PEA firmly demonstrates the economic viability of the Santo Tomas Project and justifies its continued development. The combination of excellent infrastructure, simple metallurgy, a cohesive and consistent grade distribution, and a low strip ratio, along with the identification of several existing opportunities for resource expansion, provide additional strength and certainty to the Project. We have also identified a high probability of additional upside in Project economics through the future application of mine and process design improvements, all of which confirm that we have a substantial resource at Santo Tomas. In summary, the Santo Tomas Project clearly has robust potential for the development of a large, low-cost open-pit, copper mining operation.”
The PEA is the result of a two-year Phase 1 drill program (2021-2023) that relied upon historical drilling and a 14 square kilometers 3D induced polarization (3D-IP) survey for the targeting of some 48,500 meters of drilling across 76 holes. The results confirmed and extended the historical resource and demonstrated the potential for significant resource expansion. Mineralization was identified extending to the north and south beyond the current economic pit shell.
Santo Tomás Project Mineral Resource Statement Highlights
- Total indicated resource of 561.0 million tonnes and total inferred resource of 549.1 million tonnes.
- In-situ metal of 4,579 million lb of CuEq indicated and 3,729 million lb of CuEq inferred.
The Resource Statement in the MRE has been replaced by the Resource Statement in the PEA. The earlier MRE report can be found HERE.
PEA Economic Sensitivities
Project economics and cash flows are most sensitive to changes in the price of copper (Figure 1). Mined However, the highest potential for change in economics is anticipated to result from future changes in copper pricing.
grade and recovery sensitivity is high and future studies will seek to optimize these parameters.
Ongoing and Upcoming work at Santo Tomás
Throughout H1 2024 Oroco will be focusing on PEA optimization as detailed in its news release of October 17, 2023.
“Project Enhancement Opportunities"
Several further opportunities to improve the Project have been identified during the PEA Study. These include but are not limited to:
- The application of sulfide leaching on lower grade chalcopyrite resources currently assigned to waste. Preliminary studies have commenced, and results are expected in Q4 2023. CAPEX/OPEX costs for an SX/EW facility are developed but are not considered in this PEA.
- Fully evaluate oxide copper resources that are currently carried as waste in combination with sulfide leaching using available data from surface sampling and drilling.
- Optimize mine plan around larger loading and haulage equipment.
- Optimize mobile mining fleet considering mixed fuel and or electrified options.
- Infill resource drilling in the area between North and South zones: additional resource in that area would improve optimized pit development and reduce mining costs.
- Additional comminution studies and variability testing to better constrain recoveries across the full range of expected mill feed grades based on rock and alteration types.
- Consider relocation of the primary crushing facility closer to the pit(s) via in-pit crushing stations and conveyance via tunnels from both North and South pits to the mill feed stockpile.
- Investigate coarse particle flotation to reduce comminution costs and improve factors of safety on TSF design.
- Drill hydrogeological test wells at the north end of the North Pit to better define pit inflow and pit dewatering costs.
- Drill selected geotechnical holes to optimize pit slope angles and reduce mining of waste.
- Optimize heavy equipment leasing terms.
