Minsur expects Mina Justa financing for Q3

Tuesday, March 6, 2018

Peruvian tin miner Minsur expects to wrap up financing for its US$1.4-1.5bn, 90,000t/y Mina Justa copper project by the start of the third quarter, a senior executive said.

Minsur, which has operations in both Peru and Brazil, is currently finishing work on detailed engineering for Mina Justa, where it expects to spend US$100mn this year through July and another US$200-250mn after the financing decision, CEO Juan Luis Kruger said.

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Construction will last through 2019, with commissioning to start at the end of 2019 and operations ramping up through 2020, according to Kruger.

About half the funds will come from debt financing and the other half from cashflow, he said. Minsur is also studying taking on a partner for the project, Kruger said.

"As soon as we get the project financing in place, we will make the full funding decision and we will go into full execution of the project," Kruger said on a conference call to discuss financial results.

The company is currently building its US$200mn B2 tin tailings project, which is designed to extend the life of its San Rafael mine. The 5,000t/y B2 project, which will treat 7.6Mt of 1.05% grade tin tailings over a nine-year period, will operate at costs of US$5,500-US$6,000/t.


Minsur's consolidated profit for the full year 2017 fell 8% to US$80.7mn compared with US$87.8mn the year before, while consolidated sales rose 9% to US$672mn from US$617mn a year ago, the company said in a consolidated earnings statement.

The company produced 24,615t tin last year, down 3% from 25,445t a year earlier as dwindling ore grades at San Rafael offset record output at the Pitinga mine in Brazil, the company said. The company's gold output fell 5% to 100,010oz in 2017 and niobium-tantalum jumped 77% to 3,252t from 1,840t a year earlier, it said.

The company finished repair work at the San Rafael pre-concentrator plant following a fire in September, Kruger said. Workers also staged a strike at the mine in December.

Minsur set 2018 production guidance at 16,500-17,500t tin (San Rafael), 6,000-7,000t tin and 3,000-3,500t niobium-tantalum (Pitinga) and 90,000-100,000oz gold (Pucamarca). Total capex at the three mines is expected to be US$60-90mn this year.

"Grades keep decreasing in San Rafael and the tin outlook is not very appealing," Credicorp Capital analyst Héctor Collantes wrote in a report. "We will look closely at projects which are supposed to counter grade decreases in San Rafael."