Canada’s Capstone Mining (TSX:CS) has found that its Santo Domingo copper-iron-gold joint venture project in Chile has the potential to produce battery-grade cobalt sulphate at a large-scale and low-cost.
“If Santo Domingo was in operation today, refined production of 4,700 tonnes of cobalt per year would make Capstone the fourth largest battery-grade cobalt producer outside of China, and the largest in the Americas,” the company’s president and chief executive, Darren Pylot, said in a statement.
The mine, in which Korea Resources
has a 30% interest, would also be one of the lowest cost producers of
the battery metal, opening Chile’s vast potential to become a key player in the
cobalt sector, Capstone Mining said.
At 4,700 tonnes of cobalt per year, Santo Domingo would also make Capstone the largest producer of the metal in the Americas.
For financial flexibility, the
Vancouver-based miner has structured the cobalt recovery option as a delayed
investment decision, timed to begin roughly two years after construction begins
on the copper-iron-gold concentrator.
When and if a strategic partner is found,
Capstone Mining could look to start producing cobalt at an earlier date, it
said.
“Our concept for cobalt recovery in
the 2020 PEA Opportunity is based on its association with pyrite which is
preferentially concentrated in the flotation process at the copper
cleaners/scavengers and then further upgraded to a 0.7% cobalt concentrate,
said Albert Garcia vice president of projects. “Overall, recoveries for cobalt
will be approximately 78%, with additional benefits in the form of increased
copper recovery, sulfuric acid production and energy generation.”
Santo Domingo’s current base case
economics don’t include the capital to build cobalt processing facilities nor
any of the revenues from the metal recovery.
Construction at the project,
located 50 km southwest of Codelco’s El Salvador copper mine, is
expected to start later this year.
Over its almost 18-year mine life, Santo Domingo is slated to produce an average of 134-million pounds a year of copper, 4.2-million tonnes a year of iron concentrates and 17,000 annual ounces of gold.
On top of the cobalt-producing
option, Capstone is considering the potential to utilize autonomous
equipment and infrastructure sharing.
Capstone has two producing
copper mines — the Pinto Valley Mine in Arizona, US, and the Cozamin Mine in
Mexico.