Canada-based Lion Copper and Gold said that the Yerington copper project located in Nevada, US will require an initial capital expenditure (capex) of $413m based on the findings of a preliminary economic assessment (PEA).

The initial capex includes open pit mining, processing, infrastructure, dewatering, environmental and indirect costs along with a contingency of $60.8m.

According to the PEA, the sustaining cost of the copper project is an additional $653m over the life of mine.

Besides, the assessment states that the Yerington project will utilise an open pit mining strategy followed by a heap leach operation, backed by the application of Rio Tinto’s Nuton technologies to process primary sulfide copper materials.

Lion Copper and Gold said that the Yerington copper project PEA merges the Yerington and MacArthur projects into a cohesive and integrated mining operation.

The average annual copper production at the Yerington and MacArthur operations over 12-year open pit mine life is projected to be 117 million pounds while the lifetime copper production will be 1.4 billion pounds.

Lion Copper and Gold CEO and co-chairman Travis Naugle said: “We are very pleased with the results of this Preliminary Economic Assessment, which outlines a compelling path forward for advancing the integrated Yerington Copper Project.

“The projected economics showcase the tremendous value that can be unlocked by adopting an innovative and sustainable approach centred around Nuton technologies for primary sulfide processing.”

The PEA estimates an after-tax net present value (NPV) of $356m for the American copper project.

It also projects a post-tax internal rate of return (IRR) of 17.4% for the Yerington copper project with an after-tax payback period of five years.

The Yerington copper project will also generate a cumulative cash flow of $1bn on an after-tax basis.