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Economic Evaluation of Sungun Copper Project

Authors:
[ V. Bagheri ] - M.Sc. Student of Mining Engineering, Islamic Azad University (IAU), South of Tehran Campus, Hampa Behineh Engineers Company
[ K. Oraee ] - Ph.D. Student of Mining Engineering, Islamic Azad University (IAU), Sciences and Research Campus, and Senior Process Expert of Sungun Copper Project
[ F. Rashidinejad ] - Academic Staff of Islamic Azad University (IAU), South of Tehran Campus

Abstract:

In the evaluation of Sungun Copper Project (SCP), a pre financing economic model was constructed and subsequently the model modified based on the latest and most reliable data. The Internal Rate of Return (IRR) of the base case including all costs is 8.9 percent. At a discount rate of 6.5 percent, Net Present Value (NPV) of the Project is $112M. The break-even copper price is $1,844/t. The economic model of Sungun Copper Project has the ability to show sensitivity of the project against any changes in estimation of important economic indicators such as copper price, capital and operating expenditures and discount rate instantly. One can see that the most sensitive factor, as is usual in projects of this nature is copper price. Operating costs is slightly more influential than capital costs indicating that optimization of both parameters will be necessary to improve the NPV at copper prices below the break-even copper price.

Keywords:

Net Present Value (NPV), Internal Rate of Return (IRR), Economic Model, Economic Robustness