Official: Cerro Casale off the back burner

The owners of the Cerro Casale gold-copper project in northern Chile's region II formally announced Wednesday plans to update the project's feasibility study and start talks with potential funders. The project is held by Santiago-based Compania Minera Casale (CMC), a joint venture led by Vancouverite Placer Dome (NYSE: PDG) with 51%, and fellow Canadians, Bema Gold (TSX: BGO) and its subsidiary Arizona Star, holding 24% and 25% respectively. The partners have agreed to update the feasibility study by March 1, 2004, CMC said in a statement. The revised study will determine if there have been any technological or other advancements to improve project economics, it said. In particular, the new study will look at reducing Capex costs of US$1.43bn, Placer Dome executives recently said when presenting their Q3 results. The original feasibility study, completed by Placer Dome in 2000, outlined an estimated measured and indicated mineral resource of 25.4Moz of gold and 2.90Mt of copper and assumed a life of mine gold price of US$350/oz and a copper price of US$0.95lb, said CMC. According to the feasibility study, the large-scale open pit mine could produce 975,000oz of gold and 130,000t of copper annually over an 18-year mine life. Total costs were put at US$203/oz gold, assuming credits for copper at US$0.95/lb. The project secured water rights in 2001 and Chilean authorities approved its environmental impact study in March 2002. But it was put on hold awaiting the improvement in metal prices witnessed recently. Gold has been trading at almost US$400/oz while copper has hit three-year highs with prices over US$0.90/lb. Also known as Aldebaran, Cerro Casale is located at an altitude of 3,800m.