Indications are that TSX-listed Baja Mining's Boleo project, in Mexico, may cost just $767-million to build, an improvement of more than $100-million from the firm's April 2008 estimate of $872-million, the company reported on Monday.
The figures do not include working capital and financing costs.
Baja announced in October that it would delay development of the copper/cobalt/zinc mine until market conditions improved, and is now able to take advantage of reduced input costs, the firm said.
Baja is working with its Korean partners on the project to come up with a new cost estimate.
The company has prepared a revised scope of work on an engineering, procurement and construction management basis, and has also requested proposals from several qualified engineering firms.
The tender will close at the end of March, and Baja expects to appoint an EPCM contractor in the second quarter.
The first tasks will be the preparation of a revised independent capital cost estimate and revised project schedule and Baja project staff will help with the process, in an effort to have the work completed in the third quarter.
Following this, a target price will be established for the EPCM contract, and development of the project is expected to resume as soon as the necessary financing has been arranged.
Commissioning is still targeted for 2011, the firm said.
Vancouver-based Baja agreed in April last year to sell a 30% stake in the Boleo project to a consortium led by Korean State-owned Korea Resources Corporation, to help fund the mine's development.
The average annual production for the first four years at full operating capacity is expected to be 56 000 t of copper cathode, 1 500 t of cobalt cathode and 20 000 t of zinc sulphate.
The project has an expected mine life of over 25 years.
Source: Mining Weekly
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