Project Constellation

NGEx Resources Inc. commissioned AMEC International Ingeniería y Construcción Limitada (Amec Foster Wheeler) to compile an independent NI 43-101 technical report on the results of a preliminary economic assessment of an integrated mining operation that incorporated the Josemaría deposit and the Los Helados deposit (collectively termed Project Constellation). The Report also included an updated Mineral Resource estimate for the Josemaría deposit.  (see  technical report)

Project Constellation contemplates sequential production from an open pit mine at Josemaría followed by a block cave underground mine at Los Helados. The two deposits are located approximately 10 km apart, and material from both deposits will be processed at a centralized facility. 

Including pre-stripping, Project Constellation would be in operation for 50 years. The active mine life, excluding pre-stripping is 48 years. Initial development would target the highest-grade portion of the Josemaría deposit, which is a near-surface zone of supergene-enriched mineralization. As the higher-grade material at Josemaría is depleted, production will transition to the high-grade core of the Los Helados deposit. Compared to either deposit when considered as a stand-alone operation, Project Constellation's shared facilities help improve capital efficiency, reduce overall environmental impacts, and dramatically improve project economics.

A central processing facility is planned to be located in Argentina. Material from Josemaría will be transported via a series of three surface conveyors (including two transfer stations) totalling 4.9 km in length, to a stockpile that will be located near the process plant. Material from Los Helados will be transported via an 8.1 km long underground conveyor tunnel and a 2.8 km long surface conveyor, which will tie into the existing Josemaría surface conveyor system at the first transfer station. Concentrate will be transported by truck to a port facility in Caldera, on the Chilean coast.

Groundwater will be supplied from a nearby well field in Argentina through an 8 km pipeline to the plant site, and power will be supplied via 250 km of power line construction to connect to the Argentina national grid.

Processing will be by conventional sulphide flotation, following comminution by a high pressure grinding roll (HPGR) circuit at a rate that varies between 150,000 t/d and 120,000 t/d depending on the hardness characteristics of the material being processed. This is expected to produce a concentrate containing a life-of-mine average of 29.0% Cu, 10.4 g/t Au and 70.3 g/t Ag and deleterious elements, which are expected to be well below penalty levels. Metallurgical recoveries are forecast to average 88.3% Cu, 72.7% Au and 61.4% Ag.

The base case scenario, which combines Josemaría and Los Helados mineralized material, uses an 8% discount rate. The resulting after-tax project NPV (discounted at 8%) is US$2.61 billion and the internal rate of return (IRR) is 16.6%. The cumulative, undiscounted, cash flow value for Project Constellation is projected at US$15.95 billion over the life of the mine. The initial capital investment for the Project is estimated to be $3.08 billion. Average operating costs are estimated at US$9.34/t, with cash costs, net of by-product credits, of US$1.05/lb Cu produced.

Project Constellation is located about 135 km southeast of the city of Copiapó. The Los Helados deposit is centred at 28.3408º S, 69.5857º W in Chile, and the Josemaría deposit is 10 km to the southeast, centred at 28.4359º S, 69.5486º W in Argentina.

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