Diversified base metals producer Lundin Mining has unveiled the results of an integrated preliminary economic assessment (PEA) for the Vicuña project, outlining a staged development that could rank among the world’s top five copper, gold and silver operations.

The Vicuña project comprises the Filo del Sol and Josemaria deposits and is held by Vicuña, a 50:50 joint arrangement between Lundin Mining and BHP.

"The progress achieved since the formation of Vicuña Corp has been exceptional, and this study establishes a solid foundation for moving the project forward while continuing to refine later stages and drive further improvements in cost, schedule, and production,” said Lundin president and CEO Jack Lundin.

According to the PEA, Vicuña could deliver an average of 400 000 t/y of copper, 700 000 oz/y of gold and 22-million ounces a year of silver over the first 25 full years of operation. Over a ten-year peak period, copper output is projected to exceed 500 000 t/y, alongside 800 000 oz of gold and 20-million ounces of silver, or about 800 000 t/y of copper equivalent.

The initial mine life is estimated at more than 70 years, with life-of-mine production of about 22.3-million tonnes of copper, 37.2-million ounces of gold and 763-million ounces of silver, positioning Vicuña as a multi-generational asset.

“The study outlines a project that would rank among the top five copper, gold, and silver mines globally. A staged development approach provides a disciplined pathway to unlock the full value of the district, enabling sequenced capital deployment, effective risk management, and ongoing optimization while delivering substantial, long-life copper production growth over multiple decades,” Lundin said.

The district is envisioned as a three-stage development.

Stage 1 centres on a sulphide mill and the Josemaria deposit, establishing an initial openpit mine and concentrator designed for future expansion to accelerate first production and early cash flow.

Stage 2 would develop the Filo del Sol leachable oxides, supported by a solvent extraction/electrowinning plant to recover copper, gold and silver.

Stage 3 contemplates expansion of the concentrator and development of the Filo del Sol sulphide deposit, alongside district-scale infrastructure including a desalination plant, associated pipeline and a return concentrate slurry pipeline.

The company estimates Stage 1 capital at $7.1-billion, with an after-tax internal rate of return of 14.8% and a payback period of 8.4 years under base-case assumptions of $4.60/lb copper, $3 300/oz gold and $40/oz silver. At those prices, the after-tax net present value (NPV) discounted at 8% is estimated at $9.5-billion.

At spot prices of $6.00/lb copper, $5 000/oz gold and $80/oz silver, the NPV increases to $28.8-billion and the internal rate of return to 25.5%, with a payback of 5.4 years.

Over the first 25 full years, average cash costs net of by-product credits are projected at negative $0.20/lb of copper, with all-in sustaining costs of $0.47/lb, placing the project in the first quartile of the global cost curve.

The study forecasts average free cash flow of $2.2-billion a year, after expansionary capital, during the first 25 years of operation. Life-of-mine revenue contribution is estimated at about 60% copper, 32% gold and 8% silver.

The updated mineral resource shows significant growth compared with the previous estimate, including 14-million tonnes of contained copper in the measured and indicated category and 32-million tonnes inferred. Contained gold stands at 36-million ounces measured and indicated and 61-million ounces inferred, while contained silver totals 729-million ounces measured and indicated and 1 051-million ounces inferred.

FUNDING AND NEXT STEPS
Lundin said it has secured commitments to upsize its credit facility to $4.5-billion, positioning the company to fund the initial construction phase.

“With the announcement on Thursday for commitments to upsize our credit facility to $4.5-billion, Lundin Mining is fully funded for the initial phase of construction, and we remain on course to achieve our goal of becoming a top-ten global copper producer with annual production of over 500 000 t of copper and 550 000 oz of gold once Vicuña is in full operation,” Lundin said.