The Group has a 1.525% NSR royalty with Mantos Copper over all copper produced at the Mantos Blancos Mine located in Chile, approximately 45 km from the city of Antofagasta. The Mantos Blancos Mine is an open pit operation which produces copper with silver by-products. The NSR royalty entitlement applies exclusively to copper production at the mine.
Mantos Copper will direct the proceeds of the royalty transaction to fund the Mantos Blancos concentrator debottlenecking project capital costs of US$219 million (the “Debottlenecking Project”) as well as any working capital requirements which arise as a result of its implementation. The Debottlenecking Project is expected to increase the Mantos Blancos Mine’s sulphide ore concentrator plant throughput capacity to 7.3Mtpa by 2021 from 4.3Mtpa currently, prior to the expected depletion of the oxide ore in 2023, and is expected to extend the mine life to at least 2035 at reduced cash costs.
The mine is expected to produce an average of 52.4 Kt of copper per annum during the first ten years following the completion of the Debottlenecking Project in 2021 at an average C1 cash cost of $1.87 per pound (including silver by-product credits). The mine has both production upside and mine life extension potential.
The transaction fits into Anglo Pacific’s strategy of investing in high quality commodities with smaller environmental footprints, as the Mantos Blancos Mine produces products at the premium end of the copper market.