New Mont (NYSE: NEM, TSX: NGT) and Teck resources (TSX: TCK) are planning to invest $152 million in the Nueva union project in the Atacama region of northern Chile, which has injected new vitality into the five five year joint venture.
In an assessment request this week to sea, the Chilean environmental assessment service, the two companies said they planned to drill twice this year at lafortuna copper and gold mine to reduce geological uncertainty.
The first drilling activity will last about 15 months and is expected to provide geological information for determining the deep level of the deposit. The second mining, which is expected to last 49 months, will allow the two companies to lay the foundation for a mining plan for the deep deposits in laftuna, the document said.
Nueva union symbolizes the merger of two companies' projects in the region, relincho and La Fortuna, 40 kilometers apart.
It is expected to provide Newmont and tech with some key benefits, including reducing the environmental footprint, Optimizing Mine plans, enhancing community efficiency and greater returns than any individual project.
Overall, new mines mean lower costs and higher capital efficiency - before joining relincho and lafortuna, the estimated cost of each project was $3.9 billion and $4.5 billion, respectively.
According to a pre feasibility study report in early 2018, the total capital expenditure of Nueva union phase III project is US $7.2 billion, with a life expectancy of 38 years. The mine is expected to produce 224000 tons of copper, 269000 ounces of gold and 1700 tons of molybdenum annually. Nueva Union's feasibility study began in the third quarter of 2018 and is expected to be completed by the end of March.
Earlier this week, metallaroyalty & streaming (tsx-v: MTA) received royalties of 2% of future gold production from part of the lafortuna deposit and potential exploration sites for the Nueva union project. The Nueva union project is said to be one of the largest undeveloped copper, gold and molybdenum mines in the world.
In 2015, Teck and Goldcorp (now Newmont) announced an agreement to merge their relincho and La Fortuna (EL Morro) projects into a joint venture, Nueva Union.
