SMM7 March 28: mining company Hot Chili's Productora copper project in Chile has been put into production, four months ahead of schedule, so, Hot Chili has leapt from a copper and gold miner to a copper and gold producer.
The Perth-based company has signed a mining and processing agreement with Chile's ENAMI, under which, Hot Chili is required to transport about 120000 tons of ore per year to ENAMI's Vallenar plant within two years. The plant is only 15 kilometers from the Productora copper mine and passes through the Vallenar plant in ENAMI, 15 kilometers north of Productami.
In addition, the partnership can be extended for another year.
For this reason, Sociedad Minera El Aguila, a company with an 80 per cent stake in, Hot Chili, will receive an ore processing fee of US $2 per tonne and royalties eligible for sale at a tax rate of 10 per cent.
Assuming that the current spot prices of copper and gold are about US $2.95 per pound and US $1840 per ounce respectively, ore production is 120000 tonnes per year, the average grade of copper is 1.4 per cent, and 0.3 grams of gold per tonne, Hot Chili is expected to generate annual revenue of about A $1.4 million to A $1.8 million for the Productora mine.
It is reported that Productora's existing open-pit mine reserves are 166.9 million tons, including 562900 tons of copper, 0.43 percent of 191000 ounces of gold, 0.09 percent of 11,200 tons of molybdenum and gold, and 138,000 tons of ppm.
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