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Murray Ward
Diversified metals producer Rio2 Limited has been given the regulatory green light to expand its Condestable underground copper mine in Peru, clearing the path to a production boost and an extension of the mineโs environmentally approved life by another decade.
After a 14-month process, Peruvian authorities have approved the companyโs Modified Environmental Impact Study. The decision is a significant milestone, permitting an increase in throughput capacity to 10,000 tonnes per day from the current 8400 tonnes per day.
The official nod also provides environmental authorisation for a new dry-stack tailings facility with an initial permitted capacity of 43 million tonnes. The company says the design allows for staged expansions up to a massive 170 million tonnes, providing plenty of room for future mine-life extensions while reinforcing its commitment to modern, low-risk tailings management and supporting the operationโs pathway to Copper Mark certification.
Copper Mark is a leading assurance framework that promotes responsible production practices in the copper, molybdenum, nickel and zinc industries. Certification ensures a companyโs mining and refining site meets environmental, social and governance standards, and lines up with the UNโs sustainable development goals.
โThe approval of the MEIA is a significant regulatory milestone for Rio2 and Minera Condestable and allows for several significant operational milestones.โ
Rio2 Limited president,chief executive officer and director Andrew Cox
The company expects the move will significantly improve total water recovery from its current 60 per cent to almost 90 per cent. This could provide further headroom for process growth without chasing additional water permits or increasing the draw on local water resources.
Rio2 says itโs now progressing technical and economic evaluations, ahead of a final investment decision on the expansion during the second half of this year.
Rio2 Limited president, chief executive officer and director Andrew Cox said: โThe approval of the MEIA is a significant regulatory milestone for Rio2 and Minera Condestable and allows for several significant operational milestones. This decision extends our operating horizon, confirms our environmental approach with dry-stack tailings, and opens the regulatory path to expand operations to 10,000 tpd and beyond.โ
The confidence to push ahead with an expansion is backed by some serious numbers from a recently updated June mineral resource and reserve estimate for Condestable. The project now hosts proven and probable reserves of 36.5 million tonnes grading an impressive 0.73 per cent copper, 0.15 grams per tonne (g/t) gold and 4.28g/t silver.
The broader resource is even bigger, with the measured and indicated categories holding 82.1 million tonnes at 0.69 per cent copper, 0.13g/t gold and 4.12g/t silver. Contained within that is a significant metal inventory of 565,000 tonnes of copper, 355,000 ounces of gold and 10.87 million ounces of silver.
That reserve underpins an operational mine life of 14 years and a post-tax net present value of a hefty US$710 million (A$988M). In the second quarter of this year, the mine processed over 700,000 tonnes of ore, producing 4218.5 tonnes of copper, 4451 ounces of gold, and 74,374 ounces of silver contained in concentrate.
While the current resource provides a solid foundation, Rio2 is also exploring other ways to support an expanded operation. The company is set to kick off an ore sorting pilot program in the fourth quarter of this year, targeting existing low-grade stockpiles and waste dumps to unlock additional value.
In parallel, Rio2โs exploration campaigns are continuing at both the surface and underground levels to expand the resource and replace mined reserves. A complete surface geophysical survey of the entire Condestable land package was recently completed, with management now analysing the results.
The company is also continuing to produce gold at its Fenix Gold heap leach mine in Chile, clocking 9088 ounces in the second quarter this year as it ramps up production to a forecast 100,000 ounces a year.
With the MEIA now approved, Rio2 appears to have all its ducks in a row at Condestable. It has a significant resource, solid economics and now the crucial regulatory permit to grow.
As engineering studies continue and the company barrels towards a final investment decision later this year, all eyes will be on how it plans to turbocharge this already productive Peruvian copper asset.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
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