NORSEMONT MINING AWARDS THE DEFINITIVE FEASIBILITY STUDY
FOR THE CONSTANCIA CU-MO-AG PORPHYRY PROJECT, SOUTHERN PERU
Vancouver and Lima, Peru, December 20, 2007 – Norsemont Mining Inc. (“the Company”) (TSX: NOM, BVL: NOM) today announced that following the successful conclusion of the NI 43-101 compliant independent preliminary economic assessment for the Constancia copper-molybdenum-silver porphyry project in southern Peru, the Company is initiating an independent Definitive Feasibility Study (DFS) and has selected GRD Minproc and Knight Piesold to conduct the DFS. Selection of the DFS team was based on technical, project management and economic merits.
Mr. Bob Baxter, President and COO of Norsemont Mining said: “The Company has selected strong, internationally recognized engineering consultants who will provide solid local and international support. The DFS team has considerable experience in Peru, which adds to our confidence.”
The recently completed Constancia scoping study focused on three operating scenarios: a 30,000 tonne per day (t/d) stand-alone case (SA), a 30,000 t/d expandable to 55,000 t/d case (EX), and a 55,000 t/d stand-alone case. Based on the current resource, the corresponding life of mine (LOM) for the 30,000 t/d and 55,000 t/d stand alone cases are 20 and 12 years, respectively.
Estimated production for the 55,000 t/d case is approximately 112,218 tonnes per year of copper recovered over the first five years, with a LOM annual average production of 90,411 tonnes. For the 30,000 t/d case estimated production is 72,814 tonnes per year of copper recovered during the first five years, with a LOM annual average of 53,598 tonnes.
Cash operating costs net of credits are estimated at $0.74 per lb over the 20-year project life for the 30,000 t/d case and $0.67 per lb over the 12-year project life for the 55,000 t/d case. Capital expenditure estimates (inclusive of a 25 percent contingency) for the three operating scenarios are US$605.6M, US$617.3M and US$739.7M, respectively.
Based on a discount rate of 8 percent, the Constancia project’s Internal Rate of Return (IRR), Net Present Value (NPV) and corresponding payback for the three operating scenarios are as follows:
|
Description |
30,000 t/d SA |
30,000 t/d EX |
55,000 t/d |
|
|
Without Contingency |
With 25% Cont. |
Without Cont. |
With 25% Cont. |
Without Cont. |
With 25% Cont. |
|
NPV @ 8% |
$473M |
$404M |
$467M |
$396M |
$618M |
$530M |
|
IRR |
26.7% |
21.4% |
26.1% |
20.9% |
31.8% |
25.3% |
|
Payback |
4 years |
5 years |
4 years |
5 years |
3 years |
4 years |
Note: The cash flow values presented account for post tax and royalty payments and are based on long-term price assumptions of $1.80 per lb Cu, $12 per lb Mo, and $11 per oz Ag.
The Constancia DFS will commence in January, 2008.
About Norsemont Mining
Norsemont Mining is a Canadian mineral exploration and development company focused on the Constancia Cu-Mo-Ag deposit in southern Peru. Norsemont currently controls an undivided 64% interest in the Constancia Project, which interest is set to increase to 81% in the event that Rio Tinto does not exercise a claw-back right prior to January 31, 2008. Norsemont can then acquire the remaining 19% interest in Constancia by March 31, 2008 through a payment of US$8M to Rio Tinto. The Constancia Project has a 43-101 compliant indicated resource of 70M tonnes (0.8 Billion lbs Cu) and an inferred resource of 250M tonnes (2.8 Billion lbs Cu).
For more information please contact:
Patrick Evans
Norsemont Mining
Phone: 416-670-5114
E-Mail: investors@norsemont.com
Web Site: www.norsemont.com
