Capstone Copper (TSX: CS) (ASX: CSC) has unveiled a revised feasibility study (FS) for its 100%-owned, fully permitted Santo Domingo copper-iron-gold project in Chile, incorporating recent technical and optimization advancements. This updated FS reveals enhanced project economics compared to the previous 2020 study, highlighting an increased after-tax net present value (NPV) of $1.7 billion, up from $1.3 billion, and a higher internal rate of return (IRR) of 24.1%.

The study outlines a 19-year mine life for Santo Domingo, with expected average annual production of 68,000 tonnes of copper and 3.6 million tonnes of iron concentrate. The projected cash costs are at $0.33 per pound of payable copper, marking an improvement from the previous estimate. In contrast, the earlier feasibility study had a shorter mine life of 18 years and anticipated lower annual copper production of 62,000 tonnes. Notably, during the first seven years, the updated FS forecasts average production of 106,000 tonnes of copper and 3.7 million tonnes of iron concentrate at reduced cash costs of $0.28 per pound, compared to the prior estimate of $0.61 per pound.

The initial capital expenditure for the project is pegged at $2.3 billion, translating to a capital intensity of about $21,900 per tonne of annual copper equivalent production over the mine’s lifespan. The capital payback period is projected to be three years.

Capstone Copper's CEO, John MacKenzie, highlighted the significance of the 2024 feasibility study in enhancing the project's economics, noting the low capital intensity and competitive cost structure. He emphasized that advancing towards a construction decision and integrating Santo Domingo represents a critical phase in the company's strategic growth, positioning Capstone as a leading long-life, low-cost producer of essential metals for global decarbonization efforts.

The updated FS for Santo Domingo is a key milestone towards establishing a premier mining district in Chile’s Atacama region. The proposed mine will feature two open pits and is located 35 kilometers northeast of Capstone’s 70%-owned Mantoverde mine. In late 2022, Capstone announced plans to integrate the two operations, aiming for over 200,000 tonnes of annual low-cost copper production and achieving annual cost savings of $80-$100 million.

This year, the Mantoverde mine is expected to increase its production from approximately 35,000 tonnes annually to a run rate of 120,000 tonnes of copper, partly by processing sulphide materials. Recently, the expanded Mantoverde project achieved a significant milestone by producing its first saleable copper concentrate.

Cashel Meagher, Capstone’s President and COO, noted the rarity of having a seasoned mine-building team in the industry, following the successful construction of the Mantoverde project. He highlighted that the feasibility study for Santo Domingo offers a promising investment opportunity, characterized by an attractive rate of return and a short payback period.

Looking ahead, Capstone plans to further enhance the project’s potential by exploring additional opportunities, including cobalt production in the district, processing Santo Domingo’s oxides at Mantoverde, and continuing exploration to better understand the long-term prospects of the region.