CONSTRUCTIBILITY COSTS AND ECONOMY

The construction has been developed from the point of view of costs. For this purpose,

CAPEX and OPEX have been determined, and assuming mine costs, a cash flow has also

been determined that indicates the possibility of the project.

You can see the capex in chapter 2.0 MAIN PLANT, subtitle 2.4. CAPEX AND

OPEX, section 2.4.2. CAPEX.

CAPEX evaluates the net cost of equipment, direct and indirect construction and

installation costs. Within these, we estimate the cost of assembly, pipelines, land

management, civil works and electrical installations through factors. Likewise, CAPEX

evaluates the indirect costs of the project that represent EPCM, spare parts, commissions,

startup, freight and transport. A contingency of 35% is also evaluated. All these costs were

estimated by factors provided by Peruvian consultants dedicated to plant design, which

gladly provided us with this information. In this case, part of the CONSTRUCTIBILITY

evaluated at this point by means of a factor.

All equipment costs were taken from InfoMine USA. (2014). We consider these equipment

costs as FOB costs, CIF cost was considered as 8% of equitment cost. In order to obtain

equipment in plant positions we considered a freight of USD 600.00. To update the

equipment cost values, the M&S Index extracted from Chemical Engineering magazine

were used. For the year 2019 the factor is 1716.2 while for the year 2014 is 1566.9. We

chosed 2014 like the first year because the edition of the InfoMine USA.
You can see the OPEX in chapter 2.0 MAIN PLANT, subtitle 2.4. CAPEX AND

OPEX, section 2.4.1. OPEX.

OPEX

The calculation of the energy consumed per month, the value given in HP was multiplied

by 0.745 to convert it to kw, the it was multiplied by the number of hours worked per day.

It was considered 28 days per month to calculate the monthly energy. In the cost of this

project, the salaries of people directly and indirectly involved with the production process

of the concentrate (engineers, technicians, operators, etc.) have been considered acording to

the current market in Peru.

Direct and indirect materials have been considered within the supply group, such as

reagents, spare parts and maintenance materials. Spare parts and maintenance were

considered as 1% of the cost of equipment. Within the service group, the energy

consumption of each equipment was mainly considered. The cost of energy is 0.065 kw -

hr. It was obtained through an average of the energy costs in which some Peruvian

companies work.

We have a representation of the plants in two dimensions in plans which are in the annexes

of the report. You can see the PLANS in chapter 4.0 ANNEX, subtitle 4.1. MAIN

PLANT, section 4.1.2. PFD MAIN PLANT; subtitle 4.2. REAGENT PLANT section

4.2.2. PFD REAGENT PLANT and subtitle 4.3. DISALINATION PLANT, section

4.3.1. HYDRIC BALANCE.

CASH FLOW IN can be observed in the chapter 1.0 FINAL REPORT in title 8.

FINANCIAL ESTIMATION, subtitle 8.2 CASH FLOW.

For cash flow we could not work only with plant costs, so mine costs were estimated by

benchmarking, with data from Peruvian companies with close capabilities and approximate

mineralogy, for example the “Toromocho” and “Cerro Lindo” mines. Expert criteria were

also consulted for engineers who work in operation and have current data. Also for mine

data according to Lightning. J (2012) in his work "VALUATION OF CAPEX AND OPEX

IN MINING PROJECTS". Extracted from https://es.scribd.com/document/162766220/6-

Valorizacion-Capex-Opex-Juan-Rayo-JRI, offers study data for estimates of capex and

opex in mine and plant.