Baja Updates Activity for Boleo UG Project
Following an October 29, 2008, decision to throttle-down the pace of construction at the site, the company said has been devoting time to progressing detailed engineering and completion of certain site infrastructure such as the Phase 1 construction camp and desalination plant. Baja has also commenced a capital and operating cost review, stating it believes that one positive outcome of the global financial crisis and the related easing of the construction market, is the potential for a reduction in capital and operating costs in the near term. A project re-costing estimate study is current under way.
The company said has been working with its suppliers and contractors to defer commitments. Baja, as of February 2009, on a consolidated basis had approximately $44.7 million in cash, exceeding its current market capitalization.
Baja management and its Korean consortium partners in Boleo—Korea Resources Corp., LS-Nikko Copper Inc., Hyundai Hysco Co. Ltd., SK Networks Co. Ltd. and Iljin Copper Foil Co. Ltd.—reportedly are working on a revised project schedule that will incorporate new cost estimates and expected timing of full reengagement in project construction.
Boleo’s current estimated date for commissioning is 2011. Its average annual production for the first four years at full operating capacity is targeted to be 56,000 mt of copper cathode, 1,500 mt of cobalt cathode and 20,000 mt of zinc sulphate. The project has an estimated mine life of more than 25 years and, according to Baja, once in production its anticipated cash costs are projected to be in the lowest quartile of world production.