Santo Domingo is located in a mining-friendly region, ~35 kilometres northeast of the Mantoverde mine, 50 kilometres southwest of Codelco's El Salvador copper mine and 130 kilometres north-northeast of the city of Copiapó, near the town of Diego de Almagro in the Atacama region in Chile. The project has the support from the local community and government. Elevation at the site ranges from 1,000 to 1,280 metres above sea level, with relatively gentle topographic relief.
Capstone released results of an updated technical report in February 2020 that includes a higher level of CAPEX/OPEX certainty, additional key permits and the development in Section 24 of a Preliminary Economic Assessment with respect to cobalt production.
Capstone has a framework agreement with Puerto Abierto S.A., a wholly owned subsidiary of Puerto Ventanas S.A. (subsidiary of Sigdo Koppers S.A., collectively "Puerto Ventanas" or "PVSA") under which Puerto Ventanas assumes responsibility for financing, constructing and operating the proposed port component of the Santo Domingo project. This represents approximately $250 million of the initial capital identified in the most recent NI 43-101 Technical Report. Discussions with Sigdo Kopper's rail business "FEPASA" are ongoing and present an opportunity for a further $150 million reduction in Santo Domingo's project capital costs by replacing the iron pipeline and related port infrastructure with a rail option.
Mantoverde/Santo Domingo Synergies Analysis
In Q4 2021, we started work to identify and refine potential synergies between the Mantoverde and Santo Domingo Project. The Santo Domingo Project is located ~35 kilometres northeast of the Mantoverde mine and offers significant potential synergies opportunities for:
- Infrastructure sharing (including power, water, pipelines, port),
- Transportation synergies for concentrate shipment,
- Potential enabling of product lines (additional iron or cobalt production from Mantoverde, processing oxide ore from Santo Domingo),
- Potential integrated operating approach, and
- Construction synergies (including project teams and camp).
We expect to release a synergies study and integration plan in September 2022.
Cobalt Opportunity
Capstone is currently advancing a PFS for the Santo Domingo Cobalt option. In 2021 the Company started drilling for flowsheet confirmation and geometallurgical work. The drilling program from Q3 and Q4 of 2021 generated sufficient sample mass for 2022 pilot scale testing of the cobalt recovery process. The first of a total of two stages of the cobalt feasibility engineering work, covering pre-feasibility level activities, started in September 2021 and is expected to be complete in March 2022. The proposed cobalt recovery process takes advantage of a tailings side-stream containing pyrite laden with ~0.6% cobalt, which will be recovered through a conventional flowsheet. The concentrate will be sent to pyrite roasting and solvent extraction followed by crystallization to produce battery grade cobalt sulphate heptahydrate. At an expected 10.4 million pounds of cobalt production per year, this will be one of the largest and lowest cost cobalt producers in the world at C1 cash costs1 after credits of minus $4 per pound. Additional benefits of this project include the production of by-product sulphuric acid from the pyrite roasting process, which can be used for heap or dump leaching to produce low-cost copper cathodes at Santo Domingo, Mantoverde, and elsewhere in the district.
Pre-feasibility engineering is expected in H1 2022 and the PFS is expected in H2 2022, which will include a first mineral reserve. Capstone has visited industrial sites with similar sulphide concentrate oxidation-leach facilities and processing technologies in Europe. Capstone is working with global consultants to keep the study on schedule and on budget (H2 2022, and $20 million, respectively).