Chile's Puquios copper project moves closer to development under new owners

The Puquios copper project, located in the Coquimbo region of northern Chile, is being acquired by Canada's Camino Minerals and Japan's Nittetsu with attractive development promises, according to its recently published technical report and prefeasibility study.

With key permits in hand, the initiative, in the district of La Higuera, would be ready to start construction as early as 2027.

It has an estimated after-tax net present value (NPV) of US$118mn at a discount rate of 8%, with an after-tax internal rate of return of 23.4% at a fixed copper price of US$4.28/lb.

All in sustaining costs for the 14.2-year mine life are projected at US$2.00/lb, Camino said in a statement based on data from its study.

The buyers estimate that they will finalize the purchase of all the shares of Cuprum Resources Chile in early April. Cuprum owns the Puquios project and is owned by the multinational capital fund Denham Capital, which also owns Camino.

With a commitment to a 50:50 asset share, Camino would be responsible for securing financing, while Nittetsu would be responsible for managing the operations of this project, which requires an initial investment of US$142mn.

Puquios is an SX-EW project that could initially mine an enriched chalcocite-oxide resource and reach copper production of 9,000t/y.

"The Puquios project has received its primary environmental permit, Resoluciones de Calificacion Ambiental (RCA), to build and operate a mine, so following the closing of the transaction, we are ready to complete any outstanding sectoral permits and engineering studies and accelerate the project towards copper production,” Camino's CEO, Jay Chelauskas, said in a release.

"The Company believes that it is acquiring the Puquios Project for less than the cost that it would otherwise take to bring a similar asset to the same stage of development, and in doing so, eliminating years from the project development timeline for a comparable copper asset. 

"The Puquios Project is of a scale that the Company believes it could (together with its business partners, Denham Capital Management LP and Nittetsu Mining Co., Ltd.) build by sourcing the necessary funding from capital markets. The construction and operation of the Puquios Project is expected to provide synergies to the Company’s other advanced exploration assets in Peru (particularly its Los Chapitos Project)," Camino added.

The conditions for the development of Puquios and the next steps to be taken will be discussed at an upcoming shareholders meeting at the end of the month.