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COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
C ONTENTS 23.0
CAPITAL COSTS ................................................................................................... 23-1 23.1 Summary .................................................................................................... 23-1 23.2 Estimating Method and Accuracy Range ................................................... 23-5 23.2.1 Estimate Accuracy........................................................................ 23-5 23.2.2 Estimate Quality ........................................................................... 23-5 23.2.3 Estimating System........................................................................ 23-5 23.2.4 Estimate Level of Detail................................................................ 23-5 23.2.5 Contingency ................................................................................. 23-8 23.3 Basis of Estimate ........................................................................................ 23-8 23.3.1 Estimate Strategy ......................................................................... 23-8 23.3.2 Definition of Costs ........................................................................ 23-9 23.3.3 Base Date and Exchange Rates ................................................ 23-30 23.4 Work Breakdown Structure....................................................................... 23-31 23.5 Presentation of the Estimate .................................................................... 23-39 23.5.1 Direct Cost.................................................................................. 23-39 23.5.2 Indirect Cost ............................................................................... 23-39 23.5.3 Owner’s Costs ............................................................................ 23-43 23.5.4 Sustaining Capital ...................................................................... 23-43 23.5.5 Contingency Analysis ................................................................. 23-45 23.5.6 Expenditure Code Reports ......................................................... 23-46 23.6 Risk........................................................................................................... 23-46
T AB L E S Table 23.1-1: Table 23.1-2: Table 23.1-3: Table 23.1-4: Table 23.2-1: Table 23.3-1: Table 23.3-2: Table 23.3-3: Table 23.3-4: Table 23.3-5: Table 23.3-6: Table 23.3-7: Table 23.3-8: Table 23.3-9: Table 23.4-1: Table 23.5-1: Table 23.5-2: Table 23.5-3:
Initial Capital Cost Summary ................................................................................... 23-3 Sustaining Capital Cost Summary........................................................................... 23-3 Initial Capital Expenditure Schedule (US$000’s) ..................................................... 23-4 Life of Mine Sustaining Capital Expenditure Schedule (US$000’s) ......................... 23-4 Estimating Standard for Feasibility Study................................................................ 23-6 List of Subconsultants and Areas ............................................................................ 23-8 Level of Material Take-off Information Development ............................................ 23-10 Growth and Waste Factors.................................................................................... 23-17 Labour Productivity Factors................................................................................... 23-26 Labour Rate Build-Up (US$).................................................................................. 23-28 List of Labour Rates .............................................................................................. 23-29 Construction Equipment Costs .............................................................................. 23-29 Standard CMC Discipline Codes ........................................................................... 23-30 Project Exchange Rates ........................................................................................ 23-31 Work Breakdown Structure (WBS) ........................................................................ 23-32 Direct Costs (US$)................................................................................................. 23-40 Indirect Costs (US$) .............................................................................................. 23-42 Owner’s Costs (US$000’s) ................................................................................... 23-43
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Table 23.5-4: Table 23.5-5:
Sustaining Capital.................................................................................................. 23-43 @Risk Contingency Calculation Summary............................................................ 23-46
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23.0
CAPITAL COSTS
23.1
Summary The Cerro Casale feasibility level capital cost estimate is a complete re-estimate of the nd project. The capital cost estimate is based on 2 quarter 2009 US dollars. The estimate update includes information derived from trade-off studies which included the following: •
Detailed take-offs.
•
Where design was not in sufficient in detail to prepare material take-offs (MTOs) the estimate was based on factors or allowances. Details of the percentage of each type of estimating method by area are shown in Table 23.3-2.
•
CMC’s pioneer equipment fleet will perform bulk earthworks for the initial site preparation.
•
The estimate was prepared to comply with the schedule in Chapter 22, Execution Plan.
The capital cost estimate incorporated the CMC standard work breakdown structure (WBS). Estimates for each area were broken down by discipline codes provided by CMC. Sustaining capital costs were estimated as stand-alone costs and integrated into the overall Capex. The methodology of calculating these costs is described in Section 23.3.2.17. Owners’ Costs were developed by CMC and incorporated into the capital cost estimate. These are discussed in detail in Section 23.3.2.18. A total of 81 procurement bid packages were prepared by AMEC for pricing of equipment and materials. 49 of these packages were reissued in China by AMEC’s Shanghai office. A total of 344 price proposals were received for a total value of US$3,325 million. Price proposals selected for the Feasibility Study capital cost estimate were principally from Chilean based suppliers. Price proposals accounted for 88% of all mechanical and electrical equipment pricing. Whether quotes were received in US dollars or local currency the quotes were adjusted at the project exchange rates and tracked to the country of origin. TM
Contingency was evaluated using @Risk software. All values in 5% increments between P5 and P95 were calculated and are shown in the contingency report. CMC elected to use a contingency based on the P73 value. The initial capital cost has been estimated at US$4,184 million. The total sustaining cost is US$369 million. The accuracy of the capital cost estimate for the project, taking into account the current state of design and procurement is within ±15% of final project costs
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at the summary level. The level of engineering detail for the capital cost estimate meets or exceeds the requirements of the Association for the Advancement of Cost Engineering International (AACE) standard for feasibility studies and CMC’s scope of work document dated 11 March 2008. The $4.2 billion capital cost estimate includes approximately $319 million that is expensed in the financial model as incurred, in accordance with US generally accepted accounting principles (US GAAP). These costs include project expenditures prior to classification of mineralization as proven and probable reserves; start-up costs such as training & recruiting; and community development costs
The total initial capital cost for the project is summarized in Table 23.1-1 and the total sustaining costs are summarized in Table 23.1-2. The annual expenditure schedule for initial capital cost is shown in Table 23.1-3 and the life of mine sustaining capital expenditure is shown in Table 23.1-4. The detailed estimate is provided in the Appendix H01.
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Table 23.1-1:
Initial Capital Cost Summary Area
Cost (US$000’s)
Open Pit Mine
11
808,764
Ore Handling
31
579,884
Processing Plant
41
596,100
Tailings/Reclaim & Water Treatment Facilities
51
103,026
On-Site Infrastructure
61
220,084
Off-Site Infrastructure
71
Description Direct Cost
529,644 2,837,502
Total Direct Cost 81
Total Owners’ Cost
319,787
Indirect Cost
91
EPCM Cost
911
310,101
Temporary Installations
912
33,491
Temporary Services
913
58,247
Environmental, Sustainability, Safety, & Health Supplies
915
17,188
Temporary Camp
916
37,072
Freight/Traffic & Logistics
917
127,870
Commissioning
918
15,223 918,9801
Total Indirect Cost & Owner’s Cost
3,756,482
Total Direct, Indirect Cost, & Owner’s Cost PP1
Contingency
428,000 428,000
Total Provisions
4,184,482
Total Capital Cost
The $4.2 billion capital cost estimate includes approximately $319 million that is expensed in the financial model as incurred, in accordance with US generally accepted accounting principles (US GAAP). These costs include project expenditures prior to classification of mineralization as proven and probable reserves; start-up costs such as training & recruiting; and community development costs
Table 23.1-2:
Sustaining Capital Cost Summary Cost (US$000’s)
Description Direct Cost Sustaining Capital − Mine
184,540
Sustaining Capital − Process
160,591
Sustaining Capital − Infrastructure Total Sustaining Capital Cost
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Table 23.1-3: Project Capital
Initial Capital Expenditure Schedule (US$000’s) Years
Total
2010
2011
2012
2013
2014
2015
Mine
1,445
101,176
318,935
244,956
142,253
0
Process inc. HL and SART
21,688
134,267
609,850
413,801
99,404
Infrastructure
4,975
34,030
573,849
128,258
8,616
0
749,728
Owner's Costs
47,576
51,119
66,621
73,575
35,515
10,476
284,523
Indirect Cost
43,391
138,266
261,722
92,455
95,355
3,268
634,457
Contingencies Subtotal by Year
808,764 1,279,010
8,814
50,263
217,498
108,415
42,607
403
428,000
127,889
509,122
2,048,115
1,061,460
423,750
14,147
4,184,482
For this table spares and first fills are excluded from owner’s cost and are included in the indirect cost.
Table 23.1-4:
Life of Mine Sustaining Capital Expenditure Schedule (US$000’s) Production Years
Project Capital
2014
2015
2016
2017
2018
2019
2020
2021
2022
Sustaining Capital − Mine
-
5,877
12,139
9,831
1,441
5,367
26,874
40,379
20,872
Sustaining Capital − Plant
19,240
34,231
20,464
6,633
3,754
16,067
4,450
31
4,346
-
7,500
8,649
-
3,240
685
370
-
325
19,240
47,608
41,253
16,464
8,435
22,120
31,694
40,410
25,543
Sustaining Capital − Infrastructure Subtotal Sustaining Capital
Production Years Project Capital
2023
2024
2025
2026
2027
2028
2029
2030
2032
Sustaining Capital − Mine
14,898
21,075
2,510
1,308
2,569
18,446
607
347
-
Sustaining Capital − Plant
17,850
198
4,177
-
14,253
2,209
10,897
-
1,787
Sustaining Capital − Infrastructure
1,998
-
1,506
-
-
-
-
-
-
Subtotal Sustaining Capital
34,746
21,274
8,193
1,308
16,882
20,655
11,504
347
1,787
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23.2
Estimating Method and Accuracy Range
23.2.1
Estimate Accuracy The accuracy of the feasibility capital cost estimate for the project taking into account the current state of design and procurement is within ±15% of final project costs at the nd summary level. The estimate is in 2 quarter 2009 US dollars.
23.2.2
Estimate Quality The capital cost is a new estimate of the project. New MTOs, additional studies by specialist sub-consultants, and new budget quotes for major equipment were used to enhance the quality of the direct cost estimate.
23.2.3
Estimating System Timberline (AMEC’s standard estimating system) was the platform used to prepare the estimate. This program received the MTO information from the disciplines; equipment and material quotations; subcontractor quotations, and CMC’s estimates to compile the estimate and produce the required reports.
23.2.4
Estimate Level of Detail The level of detail included in the estimate varied by discipline, depending on the percent completion of the design. Civil, outside infrastructure, concrete, structural steel, and mechanical equipment, process piping greater than 4”, electrical equipment, instruments and control valves in the estimate were generally itemized to the detail level. Process piping smaller than 4”, building services, and cable trays, cables, and connection components of the estimate were factored within the battery limits of the process plant. In areas where engineering data was not substantially developed at the time of the estimate, factors or allowances were used based on AMEC’s in-house data Budgetary quotations were solicited for all major equipment items. These requisitions involved a formal procedure from the preliminary development of technical specifications, through the selection of bidders, to the solicitation and evaluation of quotations. Copies of equipment quotations are provided in Appendix H02. Construction indirect costs were calculated based on the criteria listed later in this section. The level of engineering detail for the capital cost estimate meets or exceeds the requirements of the Association for the Advancement of Cost Engineering International (AACE) standard for feasibility studies and CMC’s scope of work document dated 11 March 2008. Table 23.2-1 details the levels used in the capital cost estimate. Where the status of engineering differed from the standard shown in the table, the status used in the estimate is shown in parenthesis.
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Table 23.2-1:
Estimating Standard for Feasibility Study Activity
Engineering Status
Resources & Reserves Resource Declaration
Yes
Reserve Declaration
Yes
Mining Mining Rate
Annual LOM
Mining Method
Final
Waste Management Plan
Optimized
Mine Design
Optimized
Equipment Selection
Optimized
Geotechnical Studies
Detailed
Processing Mineralogical Work
Completed
Bench Testwork
Completed (see exception 29.2)
Pilot Testwork
Recommended (HL ROM testing in progress)
Flowsheets
Detailed
P & Ids
Preliminary
Permitting & Environmental Control Baseline Data Collection
Completed (In Progress)
EIS/EA
In Progress (Completed but under review)
Environmental Permits
In Progress (Obtained but under review)
Construction Permit
In Progress (On Hold)
Land Tenure of Project Site Facilities
Initiate Strategy
Right of Way
ROWs Defined
Closure Plan
Detailed
Closure Cost Estimate
Detailed
Site Water Balance
Detailed
Water Rights
In Progress (Obtained)
Facility Design Topographic Survey
1 m survey plant site, 2 m survey other areas (90%)
Soil & Foundation Testing
Preliminary
Hydrology/Hydrogeology Studies
Preliminary
Seismic Design Criteria
Preliminary
Condemnation Drilling
Completed
Design Criteria
Completed
Site Layout
Optimized
Commodity/Warehouse Strategy
Optimized
Equipment Selection
Optimized
Electrical Load List
Optimized
Specifications
Performance
General Arrangement Drawings
Optimized
Electrical Drawings
Single Line
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Activity
Engineering Status
Access Design (Land/Air/Water)
Optimized
Water Supply
Measured (Optimized)
Power Supply
Optimized
Tailings Dam/Leach Pads
Detailed
Percentage of Engineering Complete
10% to 40% (20%)
Capital Cost Estimate Unit Manpower Rate
First Principles Workup
Construction Unit Rates
First Principles Workup
Material Barrow Sources
Identified
Major Equipment
Multiple Quotations
Minor Equipment
Similar Factored
Equipment Installation
Factored/Manhours (contractor benchmarking)
Civil Works
Preliminary Takeoff (detailed)
Mechanical Works
Preliminary Takeoff (detailed)
Structural Work
Preliminary Takeoff (detailed)
Piping
Preliminary Takeoff (detailed)
Electrical/Instrumentation
Preliminary Takeoff /Factored
Indirect Cost
First Principles Workup
Warehousing & Insurance Spares
First Principles Workup
Contingency
Risk Based (@Risk analysis)
Project Implementation Plan Project Management Approach
Defined
Project Management Organizational Chart
Preliminary
Project Schedule
Level 2
General Project Implementation Plan
Detailed
Contracting Strategy
Preliminary
Procurement Plan
Preliminary
Logistics Plan
Detailed
Construction Manpower Estimate
Detailed
Construction Infrastructure Plan
Preliminary
Project Team HR Plan
Preliminary
Operations Organization Structure & Workforce Build-Up
Detailed
Training Plan
Detailed
IT and ERP Systems
Detailed
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23.2.5
Contingency Contingency is a monetary provision in the estimated total cost of a project to cover uncertainties or unforeseeable elements of time and cost within the scope of the project as estimated. Contingency includes known unknowns but does not include unknown unknowns. Contingency does not include monetary provisions for any project scope change. The @Risk simulation program was used as part of the analysis to determine contingency. The estimate was categorized by discipline based on input risk criteria (quantity takeoffs, design status, market conditions, unit installation work hours, labour productivity, labour cost per hour, contractor costs, material costs, and construction equipment). Expected ranges for these categories were input and the results analyzed to determine the appropriate recommended contingency amount. The @Risk simulation program was run with a US$4,090 draft version of the estimate. Owner’s cost was excluded from the simulation. For the final version of the estimate the chosen percentage was applied to the total cost including owner’s cost. The prime criterion in contingency determination is the selection of a probability of meeting the estimated total cost of the project. CMC elected to use a probability of 73% for this Feasibility Study. The contingency analysis itemized probabilities from P5 to P95. The @Risk contingency calculation summary is shown in Section 23.5.5. The contingency model is shown in Appendix H01.
23.3
Basis of Estimate
23.3.1
Estimate Strategy The capital cost estimate has been prepared to a feasibility level using MTOs, subconsultant estimates, and equipment and material quotes. Subconsultants were used for some parts of the project. The list of subconsultants and areas are shown in Table 23.3-1. Table 23.3-1:
List of Subconsultants and Areas
Subconsultants
Areas
Arcadis Geotecnica SA
Tailings
Ghisolfo
Off-site roads
Pipe Systems Incorporated (PSI)
Concentrate pipeline, well field to Cerro Casale pipeline
SRK Consulting
Piedra Pómez wells
Piteau Associates
Pit dewatering and seepage control
Ausenco
HPGR (engineering review)
BGC
Geotechnical and Geohazard
Geocen
Topographical Surveys
Ultragestion
Topographical Surveys
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AMEC had the primary responsibility for the estimate preparation with the active involvement of CMC’s Study Team. A guiding principle in the preparation of the estimate was the whole team’s participation. AMEC’s project design and engineering groups were responsible for the development of MTOs and for ensuring that the designs, scope of work, and quantities for each discipline were fully understood. 3D design tools were used to estimate quantities. An internal review took place with the estimators, discipline engineering leads, and others developing MTOs. This review covered the overall scope of work and the WBS. The intent of this review was to establish where the battery limits started and ended for each discipline and WBS, and to identify any disconnects between disciplines or gaps in the scope of work. The preparation of the indirect cost estimate was by AMEC’s estimating group with input from project management, project execution, and CMC’s study team. The indirect estimate was prepared to reflect the project execution plan and the project schedule. The Construction Management Services estimate was prepared by AMEC’s project control group in accordance with the Project Execution Plan and with input from AMEC’s construction planning team. The Engineering and Procurement Services costs were provided by AMEC’s engineering and procurement groups.
23.3.2
Definition of Costs Capital costs were defined as Direct Costs, Indirect Costs, or Owner’s Costs and were distinguished from operating costs and sustaining capital to provide a consistent and transparent basis for financial evaluation. The change-over points between capital costs and operating costs were clearly defined and coordinated between the estimating groups. In the direct capital cost section of the estimate capitalized pre-stripping costs were incurred through Q1 2014. In the indirect capital cost section site bussing for CMC personnel, security, first aid & medical services and catering were carried in CMC’s Xeras life of mine cost model. A change over of cost from capital to operating was made as facilities came on line. It was the responsibility of the engineering disciplines to provide estimating with the material take-offs (MTOs) according to the criteria discussed in this section. The % based on MTOs and the % based on factors are shown by discipline in Table 23.3-2. Engineering participated in the definition of allowances.
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Table 23.3-2: Discipline
Level of Material Take-off Information Development Discipline Description
% Based on Detail MTOs 100% 100%
% Based on Factors
1 1
Civil – Tailings Facility Civil – Plant Site
1 6 1 2 2 3
Civil – Port Site Overland Pipe Structural Excavation/Backfill Concrete – Plant Site Concrete – Port Site Steel – Plant Site
100% 100% 90% 95% 95% 90%
10% 5% 5% 10%
3 4 4
Steel – Port Site Architectural - Structures Architectural – Furnishings Architectural – Warehouse Binning & Racking
90% 100% 0%
10% 100%
100%
-
4
-
5
Mechanical – HVAC
0%
100%
5 5
Mechanical – Equipment Mechanical – Plate Work
80% 80%
20% 20%
5
Mechanical – Tanks Process Piping – Small Bore < 4” – Within the battery limits of the plant Process Piping – Large Bore >4” – Within the battery limits of the plant Process Piping – Large Bore outside of Battery limits of the plant Electrical – High Voltage Electrical – Medium Voltage Electrical – Low Voltage, Grounding & Lighting Electrical – Overland Transmission Instrumentation – within the battery limits of the process plant Instrumentation – Controls – DCS/Communications/PCL Paintings and Coatings Insulation Power Lines - Onsite Concentrate, Water and Fuel lines Tailings Storage Facility Water Management
80%
20%
0%
100%
100%
-
100%
-
100% 50%
50%
85%
15%
100%
-
50%
50%
50%
50%
0% 0% 80% 100% 100% 100%
100% 100% 20% -
6 6 6 7 7 7 7 8 8 4 4 7 6 1 1
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Take-offs were produced by the following methodologies: • •
reports from the PDMS (3D design system); and from documents, drawings, and manual sketches.
The description of the MTO records was made up of two parts; one was a standard description according to the project classification for each item, and the other was a secondary description indicating where this amount “belongs”. For instance, for the takeoff for the platform structure (composed of light structural steel) for the carbon steel tank (TK-011), the record description was “Light Structural Steel $2,000,000 Process Equipment 4” Pipe and fitting routing allowance Small bore pipe was factored < 4” Growth on equipment Allowance for cable and wire overbuy and sagging
23.3.2.16 Indirect Costs Indirect costs were calculated by means of a model in an effort led by AMEC’s estimating group. The indirect model includes the following. Engineering/Procurement The engineering and procurement (EP) estimate is based on the project execution plan. The EP cost was calculated on a cost reimbursable plus fee basis in a North American and/or South American location. EP for the concentrator and port facilities was assumed to be part of a single overall EPCM contract. The EP estimate covers the home-office based engineering services to design and procure the equipment for the concentrator, port facilities, and associated infrastructure. Staff assigned to or who move to the field office were included in the CM estimate. The EP estimate included the following home-office based services and expenses: • • • • • • • •
project management project administration engineering management detail design document control home office health, safety, and environmental home office human resources home office project controls
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• • • • • • • • • • • • • •
home office accounting and business services home office computers and information technology services home office procurement vendor inspection and expediting home office contract administration estimating home office reproduction and communications travel costs for home office staff travel costs for inspection and expediting assignment or policy costs based on current industry standards for staff assigned to the home office geotechnical investigation for design specialist services for pipeline analysis specialist consultant reports and facilitators home office translation services.
EP costs were based on an estimate of hours for development of deliverables for the detailed engineering component. The rest of the estimate was based on staffing requirements and duration for management, administration, control, and procurement staff. The duration for each non-engineering position was estimated and hours calculated accordingly. Temporary Construction Buildings and Facilities This account includes temporary buildings and services required during construction and commissioning. These costs were estimated in accordance with the construction execution plan and include the following. • • • • • • • • •
construction management offices temporary warehouse temporary construction services construction water supply construction power sewage facilities construction communications laydown and staging areas roads and maintenance
All temporary utilities required during construction were estimated based on the layout. Allowances were made for piping and electrical hook-ups.
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Temporary power (construction power) will be generated through a series of diesel power generators at various locations on site until permanent power is established. Fuel for these generators will be delivered by means of fuel trucks and they will be serviced on a daily basis. The cost of fuel was included in a line item for “Energy Supply.” Temporary fuel storage and distribution will be set up at site. The temporary tanks and fuel distribution will service the heavy earthmoving equipment, trucks, and all construction type activities. Warehousing will be provided for storage of mechanical, electrical, and plant equipment, and bulk materials purchased by the EPCM contractor. Offices will be provided for the EPCM contractor and CMC’s project management teams. Temporary and permanent construction camp costs were provided through vendor quotations based on a typical Chilean camp configuration. Vendor quotations were obtained for modular type offices and fold-away type temporary construction buildings. Installation work hours were included for setting the buildings on prepared foundations. Construction contractors will provide their own offices and warehousing facilities; these costs are accounted for in the all-in contractor labour rate. The EPCM contractor will provide points around the project site where these contractors can hook-up to power and water. An operations and administration center will be established in Nantoco. A traffic control and truck marshalling area will also be established near Nantoco Temporary Camp and Catering The resource loaded project schedule was used to develop the size of the temporary construction camp. Quotations were received from Chilean vendors for the supply and installation of the camp. Catering was carried in owner’s cost and was calculated based on the camp occupancy. Temporary Construction Services Temporary construction services include the following: • • •
Office janitorial and garbage services for the EPCM and CMC’s project teams was included in the Owner’s Costs. quality assurance (QA) surveying site access control and security services
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• • • • •
bussing between the camp and the work site for CM personnel, direct labour transportation is included in the direct cost of labour. personnel medical examinations safety induction and badges first aid, medical supplies, and services hazardous material collection and disposal.
The costs for these services were based on the EPCM and CMC’s team organization charts, project construction schedule, and past experience with other projects. An allowance was included for soils, concrete, and piping NDE (non-destructive examination) testing, HDPE NDE testing, ultrasonic testing, as well as QA for mill bolt and steel bolt torque verification. Construction Equipment and Tools The project assumes early purchase of five cranes included in the mine and process equipment list. A detailed study was made of the construction equipment required by the contractors on the project. The result of this study was compared with the equipment being purchased in the direct cost estimate for operations and with the total value of equipment in the estimate for construction. It was determined that there were sufficient costs in the estimate to cover all contractor’s equipment requirements and that no additional equipment for construction should be purchased in the indirect account. Except for the PSI pipeline estimate, allowances for personal vehicles for individual members of the EPCM and CMC’s project teams were included and priced new. The duration of the schedule indicates that purchase rather than rental is more economical. It is envisioned that the personal vehicles be turned over to CMC at the end of construction. Cost for fuel, personal protection equipment (PPE) for the EPCM and CMC’s project teams, and construction communications were estimated using factors. An allowance was made for pre-commissioning test equipment and supplies based on experience at similar type of plants. The cost of contractors’ construction equipment was included in the direct cost. Contractor small tools, consumables, and PPE are included in the all-in contractor rate build-up. Construction Field Office Expenses Construction field office expenses that are included in the indirect field cost and not included in the CM estimate are:
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• • • • • • • • • • • • •
office supplies offices vehicles telephone and communications consumables reproduction postage and courier service computer workstations, computer equipment, software, and network connections construction office furnishings photocopiers water service contracts for fax and copy machines fire extinguisher recharging.
Construction Management The construction management (CM) estimate was based on the project execution plan (Chapter 22, Execution Plan) which assumes that multiple contractors will carry out the work through unit price/fixed fee or lump sum contracts. The CM estimate covers the field services required to construct all project facilities other than CMC self performed work. Staff that are assigned to or move to the field office are included in the CM estimate. The CM estimate includes the following site-based services as required: • • • • • • • • • • • • • •
project management field engineering site document control construction management industrial relations health, safety, and environmental site administration field human resources site quality assurance and control site project controls field accounting site computers and information technology services site procurement field warehousing
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• • • •
field contract administration travel costs for field staff once assigned to site travel costs for field expediting assignment policy costs based on typical industry conditions.
CM costs were calculated according to staffing requirements. This staffing includes the personnel indicated on an organization chart developed for the estimate. Details of CM staffing are discussed in Chapter 22, Execution Plan. Average labour costs were applied to the hours estimated for each category. Average monthly policy costs were calculated for international, South/Central America, and Chilean-based staff.. Costs for vendor representatives to assist with the installation and start-up of equipment are included in a separate EPCM account, not in the CM estimate. Pre-operational testing and start-up were based on staffing requirements. Assumptions and exclusions: • • • • •
overall duration of construction in line with project execution schedule. all CM staff will be housed in camp expatriate CM staff will be tax equalized Additions to scope for changes requested by the operations staff are not included in the estimate. policy costs for out-of-country staff assigned to site will be based on 20% uplift on base hours.
Commissioning The cost of commissioning assistance by the EPCM contractor was based on a detailed schedule that considered the separate commissioning of the heap leach and the process plant. CMC’s technical staff costs are included in the Owner’s Costs account. Freight/Duties Estimates of freight costs for major mining equipment are based on information provided by equipment vendors except where an audit indicated that the estimates of ocean freight when converted to an equivalent freight cost per revenue-tonne fell outside the expected range quoted by vendors and freight forwarders. In these cases, mining equipment freight estimates were adjusted by applying the average rate per revenue tonne of other mining equipment vendors. All other mining equipment freight costs are based on historical costs inclusive of delivery to site.
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COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Freight costs for all other materials and equipment were estimated by AMEC using budget pricing provided by freight forwarders and domestic transport service providers. Plant, equipment, and supplies purchased offshore were priced FAS port of export inclusive of export packing and transport to the port. For these cargos, freight forwarders provided budget unit pricing based on the type of cargo, weight and dimensions, any special handling requirements, and the port of export, with Antafogasta or Mejillones as the designated port of receipt. Unit prices for offshore cargos identified separately the unit costs for handling at the port of export, ocean freight, receiving and handling at the port of receipt, temporary storage, and road transport to the site. Freight forwarders and transport companies provided unit transport costs for overweight, over-size, or other nonstandard loads from the port of import to the laydown area at the site. For equipment and supplies sourced domestically, transport companies provided unit rates for transporting fuel, bulk, containers, break-bulk, general cargo, and the non-standard loads from a designated point of origin to the Area 3400 laydown area. Estimates of ocean freight charges assume equipment and materials sourced in the US will be transported on non-US flagged vessels. Ex-Im Bank loan conditions, however, require that US products purchased with its funds must be carried on US-flagged vessels. Based on recent quotes for charter services for shipments between US ports and Chile, the use of US-flagged vessels would increase ocean freight costs by about $ 4 million, or about 20 % higher than that for non US-flagged carriers. Costs for using storage areas at the port or other locations were provided by third parties. Imported equipment and materials were evaluated by country of origin by AMEC procurement and the duties were calculated. Due to Chilean foreign trade agreements the cost of duties to the project were less than $US 400,000. Vendor Representatives Vendor representative costs were developed based on information provided by the vendors. A list was prepared for process equipment (mechanical and electrical) on the project that will require the services of a vendor to ensure manufacturers’ warranty. These representatives will provide expertise and supervision during erection, and/or will assist in pre-commissioning or plant commissioning. A travel time of one day was included in the vendor time required on site. Air fares, lodging, and other out-of-pocket expenses were accounted for as a rate per round trip. All-in daily rates quoted by vendors in their budget major equipment pricing were adjusted to reflect the planned 60 hour work week. If there was no information available then a factor was used.
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COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
23.3.2.17 Sustaining Costs The sustaining capital costs were developed separate from the main estimate and scheduled on an annual basis for the financial model. Table 23.5-4 summarises sustaining capital. The detailed sustaining capital estimate is included in Appendix H01. Sustaining capital includes: • • • • •
mining sustaining capital for replacement equipment based on hours used truck shop expansion Copiapó water infrastructure mobile equipment replacement tailings storage facilities.
23.3.2.18 Owner’s Costs The Owner’s Costs are shown in Table 23.5-3. The costs shown are a compilation of the various mine areas and activities during the entire preproduction stage. More detail of the Owner’s Costs is provided in Section 30.3.7.3. The Owner’s Costs in Section 30 describe the cost areas in general terms and are applicable to both the capital estimate and the future work plan Owner’s Costs. 23.3.2.19 Labour Productivity Developing the labour productivity was a critical part of the estimating process. With over 20 million direct manhours in the project a 10% change in the average productivity could change the total manhours by over 2 million or approximately US$60 million. As well as a large impact on direct cost, there would be indirect cost impacts on camp size, bussing, and camp catering. The cost of direct (manual craft) labour is defined as the cost of the work hours expended by tradesmen in the physical construction of the facilities including apprentices, journeymen, and foremen. The construction labour cost was based on a CM execution approach. Hence, all construction will be by contractors. Work hours were generated from first principles utilizing crew-based productivities. These productivities are norms derived from AMEC’s standard work hours based on data from typical mining projects and contractor input. Typically the work hours applied to each line item include: •
organization, planning, and layout required of the tradesman, foreman, and supervisors
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COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
•
on-site material and/or permanent plant equipment handling from the warehouse or laydown to the point of installation
•
organization of the required tools, consumables, and construction equipment required for the installation
•
installation of the material or equipment
•
verification of completion and readiness for testing and pre-commissioning.
Productivity factors (or loss of productivity in the field) were established based on AMEC’s standard work hours, contractor information, and benchmarking. The following factors were considered in assessing labour productivity: • • • • • • • • • • •
AMEC standard work hours contractor labour survey (conducted by AMEC estimating) site location weather conditions safety conditions schedule work week cycle construction schedule skill and availability of labour site work congestion and coordination local construction techniques and work practices crew size.
Chilean contractors with specialized knowledge and experience on sites with conditions similar to those at Cerro Casale were used to benchmark and verify the productivities used in the estimate. The contractors and areas are: Sigdo Koppers Besalco Ready Mix Javier Cortes
Structural, Mechanical, Electrical, Concrete, Detail Excavation, Piping Massive Earthworks Concrete Batch Plant Heavy Haul and Specialized Transport.
The productivity factors (multipliers) incorporated into the construction labour unit work hours, applied to AMEC North American unit work hour standards, are shown in Table 23.3-4. The modularization study assumed a 15% savings in work hours for assembly work at Area 3400 over work at the mine/plant site.
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COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Table 23.3-4:
Labour Productivity Factors Mine/Plant Site Construction Multiplier
Port/Nantoco Multiplier
Heavy Earthworks
2.0
2.0
Civil Piping
2.0
2.0
Structural Excavation & Backfill
2.0
2.0
Concrete
2.7
2.2
Structural Steel
2.8
2.3
Architectural Outside
2.8
2.3
Process Equipment
2.8
2.3
Secondary Equipment
2.3
1.8
Conveyors
2.0
1.5
Piping
2.6
2.1
Electrical
2.8
2.3
Instrumentation
2.8
2.3
Prime Account
23.3.2.20 Composite Crew Labour Rates Contractor labour rates are based on a composite crew mix by prime commodity account reflecting a work cycle of 14 days on/7 days off and 10 hours per day for all direct construction work. The open pit mine would initially work 12 h/d but would move to 24 h/d operation with 2 crews working. The composite labour rates are considered “all-in”, are in U.S. dollars, and include the following: • • • • • • • • • • • • •
employee costs base hourly wage government legislated assessments vacation and statutory holidays sick leave overtime premium benefits (Workers’ Compensation, sudden termination, and insurance) site uplift incentives additional employee costs small tools and consumables safety equipment and clothing contractor indirect costs contractor home office support costs
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• • • • •
site supervision, management, and administration transport of personnel to/from home site. construction services (janitorial, safety, surveyors, and general clean-up) contractors mobilization and demobilization contractor overhead and profit.
Table 23.3-5 details the build up of the labour rates. Contractor labour rates (see Table 23.3-6) are based on information available from current Chilean labour laws, company mark-ups, and data from projects executed in the region. The composite crew mix assumes that all contractor craft personnel will be Chilean from the foreman level down. The cost of construction equipment, estimated as dollars per direct work hour by prime account, includes equipment ownership costs, depreciation, insurance, fuel oil, lubricants, maintenance, and service and repair (see Table 23.3-7). The estimate was classified by the standard CMC discipline codes as shown in Table 23.3-8
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COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Table 23.3-5:
Labour Rate Build-Up (US$)
Crew Rate Construction Facilities Temporary Work Area Temporary Roads & Parking Temporary Buildings Minor Temp. Construction Construction Plants Temporary Utilities Weather Protection Scaffold Subtotal Construction Support Operation Cost & Site Supervision Personal Transport Site Services (QA/QC, Safety & Health, Security) General & Final Clean Up Warehousing Craft Training Safety Orientation+HSE+Drug Test Clean-up Non Productive Labour Pre-op Testing Support Subtotal Camp Provides Food, Soft Drinks & Lodging Subtotal Construction Equipment Equipment (Incl Fuel, Maint, Mob/Demob) Tools Diesel Generator Fuel Consumables Control & Safety Supplies, Protection & Signs-Construction Subtotal Overtime Scheduled Overtime Subtotal Other Expenses Purchased Power Purchased Water Subtotal Contractors O & P Contractor Overhead + Profit (20%) Subtotal Total Contract Indirects % Contractor Indirect versus wage rate (%) Total Rate Crew Rate − Direct before Mark-up Crew Rate − Direct Labour Construction Equipment Total Labour All-In
Project No.: 159742 February 2010
1 Mass Earthwork Heavy 7.78
1
2
4
5
6
7
8
Architectural
Mechanical
Piping
Electrical
Instruments
8.45
3 Structural Steel 10.41
Misc. Civil
Concrete
9.26
9.65
10.19
11.26
9.63
10.31
0.12 0.03 0.25 0.33 0.73
0.15 0.05 0.33 0.35 0.88
0.13 0.05 0.33 0.35 0.86
0.18 0.06 0.34 0.35 0.93
0.15 0.11 0.41 0.35 1.01
0.15 0.08 0.35 0.37 0.95
0.15 0.12 0.35 0.45 1.07
0.15 0.08 0.35 0.37 0.95
0.16 0.02 0.35 0.36 0.89
4.81 2.62 1.21 0.39 0.23 0.14 9.40
5.72 2.62 1.45 0.46 0.28 0.17 10.70
5.22 2.62 1.32 0.42 0.25 0.15 9.99
6.44 2.62 1.62 0.52 0.31 0.19 11.70
5.96 2.62 1.51 0.48 0.29 0.17 11.03
6.30 2.62 1.59 0.51 0.31 0.18 11.50
6.96 2.62 1.76 0.56 0.34 0.20 12.44
5.95 2.62 1.50 0.48 0.29 0.17 11.01
6.37 2.62 1.61 0.52 0.31 0.19 11.61
-
-
-
-
-
-
-
-
-
21.90 0.47 0.39 0.13 22.88 -
4.13 0.56 0.46 0.16 5.31
4.13 0.51 0.42 0.15 5.21
5.76 0.62 0.52 0.16 7.07
3.58 0.58 0.48 0.15 4.79
4.50 0.61 0.51 0.16 5.78
6.73 0.68 0.56 0.18 8.15
1.41 0.58 0.48 0.17 2.64
1.13 0.62 0.52 0.17 2.43
-
-
-
-
-
-
-
-
0.17 0.20 0.37
0.17 0.22 0.39
0.17 0.20 0.37
0.17 0.25 0.42
0.17 0.24 0.41
0.17 0.25 0.42
0.17 0.26 0.43
0.17 0.22 0.39
0.17 0.24 0.41
8.23 8.23 41.62 535 49.40 7.78 19.72 27.50 21.90 49.40
5.31 5.31 22.57 244 31.84 9.26 18.45 27.71 4.13 31.84
4.97 4.97 21.40 253 29.85 8.45 17.27 25.72 4.13 29.85
6.11 6.11 26.22 252 36.64 10.41 20.46 30.87 5.76 36.64
5.38 5.38 22.62 234 32.27 9.65 19.04 28.69 3.58 32.27
5.77 5.77 24.42 240 34.61 10.19 19.92 30.10 4.50 34.61
6.67 6.67 28.75 255 40.01 11.26 22.03 33.28 6.73 40.01
4.92 4.92 19.92 207 29.54 9.63 18.50 28.13 1.41 29.54
5.13 5.13 20.47 199 30.78 10.31 19.34 29.65 1.13 30.78
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COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Table 23.3-6:
List of Labour Rates
Prime Account
Area
Rate/Work Hour Plant (US$/h)
Rate/Work Hour Port (US$/h)
1
Mass Earthworks
$27.50
$24.37
1
Civil Piping
$27.71
$24.04
1
Structural Excavation/Backfill
$27.71
$24.04
2
Concrete
$25.72
$22.40
3
Structural Steel
$30.87
$26.76
4
Architectural & Buildings
$28.69
$24.79
5
Process Equipment
5
Bulk Mechanical Equipment
$30.10 $30.10
$26.11 $26.11
5
Tanks and Vessels
$30.10
$26.11
6
Piping
$33.28
$28.84
7
Electrical
$28.13
$22.43
8
Instrumentation
$29.65
$23.17
Table 23.3-7:
Construction Equipment Costs
Prime
Account
US$/h
1
Mass Earthworks
Varies
1
Civil Piping
$4.13
1
Detailed Structural Excavation & Backfill
Varies
2
Concrete
$4.13
3
Structural Steel
$5.76
4
Architectural
$3.58
5
Mechanical
$4.50
5
Mechanical Bulks
$4.50
5
Tanks & Vessels
$4.50
6
Piping
$6.73
7
Electrical
$1.41
8
Instrumentation
$1.13
Note: Mass and structural earthmoving equipment based on contractor equipment rates
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COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Table 23.3-8: Code 1 2 3 4 5 6 7 8 9
Standard CMC Discipline Codes Discipline
Civil Concrete Structural Steel Architectural Mechanical Piping Electrical Instrumentation Project Indirect Costs
23.3.2.21 Modularization Savings A study was undertaken to identify potential savings from pre-assembly and modularization performed at the lower camp elevation. The study identified US$11.2 million in direct cost savings. In addition, approximately US$1 million in savings for camp cost will flow through the Owner’s Cost calculation. The Modularization Plan study report is provided in Appendix W06. Savings were identified in the following areas: • • • • • • • •
prefabricated reinforcing steel precast concrete structural steel mechanical equipment carbon steel pipe hdpe pipe tanks platework.
The savings in cost and manhours were included in the estimate. The savings were spread to the appropriate WBS and discipline.
23.3.3
Base Date and Exchange Rates nd
The estimate is based on 2 quarter 2009 prices. Due to the large movement of the Chilean Peso during the study, an exchange rate of 500 CLP per USD was used to more accurately reflect the current market. All other currencies remain unchanged. Conversion rates from other currencies are shown in Table 23.3-9.
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COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Table 23.3-9:
Project Exchange Rates
Currency
Unit/US$
Canadian Dollar (CAD)
1.15
Australian Dollar
1.33
S. African Rand
9.00
Euro (European Union)
0.714
Chilean Peso (CLP)
500
Peruvian Sol
3.10
Argentina Peso
3.50
China RMB
6.80
Brazilian Real
2.00
Russian Ruble
31
PNG “PGK Kina” DR Peso
2.75 35
Note: Quotes in UF were converted to CLP at the rate at the time of the quote. (UF stands for Unidad de Fomento. It is a unit of account adjusted for inflation on a daily basis. It is frequently used in Chilean commercial activities.)
23.4
Work Breakdown Structure The capital cost estimate is organized in accordance with the WBS provided by CMC. The WBS for direct, Owner’s Costs, and indirect areas are listed in Table 23.4-1.
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COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Table 23.4-1:
Work Breakdown Structure (WBS) Description
WBS
MINING Open Pit Mine Open Pit Mine Development Open Pit Mine Development Pre Stripping Mine Stockpiling Waste Dumps Open Pit Development Common Facilities & Services Moveable Unitary Substations Open Pit Mining Equipment Open Pit Mining Equipment Drilling Equipment Loading Equipment Hauling Equipment Support Equipment Mine Maintenance Equipment Dispatch System Open Pit Mine Infrastructure Open Pit Mine Infrastructure Mine Roads Pioneering Dewatering Truckshop Explosive Magazine Mine Stockpiling Platforms Planning and Exploration Mine Facilities & Services (offices, canteen, refuges, & first aid) Truck Wash Pad Truck Fuel Station Guard House In-Pit Material Handling In-Pit Material Handling In-Pit Crushing In-Pit Conveying In-Pit Material Handling Facilities & Services Ore Handling Coarse Ore Crushing Coarse Ore Crushing Primary Crushing Primary Crushing Ore Handling Primary Ore Crushing Facilities & Services Ore Conveying Ore Conveyors Ore Conveying Facilities & Services
1 11 111 1110 1111 1112 1113 1119 11191 112 1120 1121 1122 1123 1124 1125 1126 113 1130 1131 1132 1133 1134 1135 1136 1137 1139 11391 11392 11393 114 1140 1141 1142 1149 31 311 3110 3111 3112 3119 312 3121 3129
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COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Description
WBS
Coarse Ore Stockpiling Stockpile Tripper Coarse Ore Stockpiling Facilities & Services Ore Reclaim Ore Reclaiming Ore Reclaim Facilities & Services Secondary Crushing Secondary Crushing Secondary Crushing Ore Handling Secondary Crusher Ore Storage Secondary Crushing Facilities & Services Tertiary Crushing Tertiary Crushing Tertiary Crushing Ore Handling Tertiary Crushing Ore Storage Tertiary Screening Tertiary Oversize Storage Tertiary Crushing Facilities & Services Heap Leach Heap Leach Pad Heap Leach Solution Distribution Heap Leach Stacking & Conveying Heap Leach Facilities & Services Processing Plant Grinding/Milling/Classification Primary Grinding Pebble Crushing Secondary Grinding Slurry Feed Preparation & Storage Classification Flash Flotation Grinding Facilities & Storage Separation/Concentrating Neutralization Flotation Regrinding Thickening & Filtration Product Dewatering & Storage Tailings Pumping Tailings Thickening Separation/Concentrating Facilities & Services Cyanide Leaching Tank Leaching Leaching Thickening
Project No.: 159742 February 2010
Page 23-33
313 3131 3132 3139 314 3141 3149 315 3151 3152 3153 3159 316 3161 3162 3163 3164 3165 3169 317 3171 3172 3173 3179 41 411 4111 4112 4113 4115 4116 4117 4119 412 4122 4123 4124 4125 4126 4127 4128 4129 413 4131 4132
COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Description
WBS
Column Leaching Cyanide Destruction Ponds Carbon in Column Carbon Pre-attrition/Regeneration System Leaching Facilities & Services Refining Desorption & Gold Room Sulphide Precipitation – Copper Melting & Casting Base Metal Refining/SART Electro-winning Cyanide Storage & Handling HCI & Caustics Refining Facilities & Services Lime & Reagents Lime Storage & Handling Flocculent Systems Collector Storage and Systems Promoter Storage & Systems Frother Storage & Handling Copper Sulphate Storage & Handling Hydrogen Peroxide Storage & Handling Test Reagents Storage & Handling Lime & Reagents Facilities & Services Process Utilities Control System Communication System Plant Air Instrument Air Plant Water Process Area Pipe Bridges Process Utilities Facilities & Services Tailings/Reclaim & Water Treatment Facilities Tailings Disposal Tailings Dam Rougher Tails Dam Cleaner Tails Dam Tailings Diversion Channels Tailings Pipelines Tailings Distribution Tailings Facilities & Services Reclaim Water Reclaim Barge Reclaim Pipelines
Project No.: 159742 February 2010
Page 23-34
4133 4135 4136 4137 4138 4139 416 4161 4163 4164 4165 4166 4167 4168 4169 417 4171 4172 4173 4174 4175 4176 4177 4178 4179 419 4191 4192 4193 4194 4195 4198 4199 51 511 5111 51111 51112 51113 5112 5113 5119 512 5121 5122
COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Description
WBS
Reclaim Facilities & Services Water Management for Thickened Tails Water Management for Thickened Tails ARD Treatment Dams Pumping & Pipelines Seepage Control ARD Treatment Facilities & Services Effluent Treatment Effluent Treatment Backfill Plant Backfill Plant On-Site Infrastructure Site Preparation Diversions Demolition Fencing Yard and Exterior Lighting Bulk Earthworks Site Common Facilities & Services On-Site Roads River Crossings Parking Taxi Rank and Bus Terminal Drainage Helipad Brake Test Ramp Surfaced Roads Gravel Roads Earthwork and Terracing On-Site Roads On-Site Non-Process Facilities Permanent Accommodation Security/Medical Facilities General Offices Assay Laboratory Plant Warehouse/Shop Main Mill Office Building CIL Office Building Main Administration Building On-Site Mobile Equipment Mobile Maintenance Equipment Mobile General & Administration Equipment On-Site Bulk Storage Water
Project No.: 159742 February 2010
Page 23-35
5129 513 5131 514 5141 5142 5143 5149 515 5151 516 5161 61 611 6111 6112 6113 6114 6115 6119 612 6121 6122 6123 6124 6125 6126 6127 6128 6129 6121 613 6131 6132 6133 6134 6135 6136 6137 6138 614 6141 6142 615 6151
COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Description
WBS
Potable Water Bulk Storage Gland Water Bulk Storage Fire Water Bulk Storage Fuel Propane Bulk Storage Facilities & Storage On-Site Services/Utilities On-Site Fresh Water On-Site Potable Water On-Site Process Water On-Site Fire Water On-Site Environmental Monitoring On-Site Effluent On-Site Other Utilities (compressed air, propane) On-Site Security Systems On-Site Services/Utilities Facilities & Services On-Site Communications Distributed Control System Communications & Networks On-Site Communications Facilities & Services On-Site Lime Quarry & Production Facilities Quarry Crushing Conveying Screening Storage Milling Lime Plant On-Site Lime Quarry Facilities & Services On-Site Power Supply & Transmission Switchyard On Site Transmission – Power Distribution On-Site Overhead Transmission Lines On-Site Underground Distribution Mine Substation Main Substation On Site Power Generation Power Generation - Mine Power Generation – Plant Site Power Generation – Camp Area Power Generation – Hydro Power On Site Power Supply Facilities & Services Off-Site Infrastructure Off-Site Roads/Water Diversions Off-Site Roads
Project No.: 159742 February 2010
Page 23-36
61511 61512 61513 6152 6153 6159 616 6161 6162 6163 6164 6165 6166 6167 6168 6169 617 6171 6172 6179 618 6181 6182 6183 6184 6185 6186 6187 6189 619 6191 6192 61921 61922 62923 6193 6194 61941 61942 61943 61944 6199 71 711 7111
COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Description
WBS
CH33 Upgrade Access Road Mine to Camp Off-Site Facilities Off-Site Permanent Buildings Off-Site Railways Off-Site Accommodation Off-Site Maintenance Mobile Equipment Off-Site Maintenance Mobile Equipment Off-Site Bulk Storage Off-Site Water Pipelines & Bulk Storage Off-Site Water Pumping Station Off-Site Water Pipeline Off-Site Water Pressure Monitoring Station 1 Off-Site Water Pressure Monitoring Station 2 Off-Site Water Pipeline Intermediate Pig Station Off-Site Water Pipeline Terminal Station Off-Site Well Field Off-Site Fuel Pipelines & Bulk Storage Off-Site Concentrate Pipelines & Bulk Storage Concentrate Pumping Station Off Site Concentrate Pipeline Off Site Concentrate Pipeline Pressure Monitoring Sta. Off Site Concentrate Pipeline Emergency Ponds Off Site Concentrate Pipeline Valve Station 1 Off Site Concentrate Pipeline Valve Station 2 Off Site Concentrate Pipeline Valve/Choke Station 3 Off Site Concentrate Pipeline Terminal Choke Station Off Site Concentrate Pipeline Valve Station 4 Port Facilities Port Site Development & Utilities Port Concentrate Receiving Concentrate Filtration Plant Concentrate Effluent Treatment Port Concentrate Storage & Handling Port Coal Storage & Handling Ship Loader Port Berth Port Marine Structure Port Ancillary Facilities Airport Facilities Airport Runways Airport Taxiways Airport Aprons Airport Passenger Terminal Buildings Airport Freight Handling Facilities
Project No.: 159742 February 2010
Page 23-37
71111 71112 712 7121 7122 7123 713 7130 714 7141 71411 71412 71413 71414 71415 71416 71418 7142 7143 71431 71432 71433 71434 71435 71436 71437 71438 71439 715 7151 7152 71521 71522 7153 7154 7155 7156 7157 7158 716 7161 7162 7163 7164 7165
COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Description
WBS
Airport Facilities & Services Off-Site Services/Utilities Off-Site Fresh Water Off-Site Potable Water Off-Site ARD Off-Site Fire Water Off-Site Environmental Monitoring Off-Site Communications Off-Site Effluent Off-Site Other Utilities (Compressed air, Propane) Off-Site Lime Quarry & Production Facilities Off-Site Lime Quarry & Production Facilities Off-Site Power Supply & Transmission Off-Site Switchyard Off-Site Transmission Off-Site Transmission – Piedra Pómez Off-Site Transmission – Port Off-Site Transmission – Camp Off-Site Transmission – Cerro Casale Mine Site Main Substation Power Supply Piedra Pómez Power Supply Port Power Supply Camp Power Supply Cerro Casale Mine Site Power Generation Off Site Power Facilities & Services Owner’s Cost Project Cost Project Management Project Controls Engineering & Procurement Construction Management Legal and Permitting Public Relations Commissioning Community Engagement General Administration Spares & Inventory Operational Spares Critical Spares Commissioning Spares First Fills Preproduction Operations Mine Training Cost Studies
Project No.: 159742 February 2010
Page 23-38
7169 717 7171 7172 7173 7174 7175 7176 7177 7179 718 7181 719 7191 7192 71921 71922 71923 71924 7193 71931 71932 71933 71934 7194 7199 81 811 8111 8112 8113 8114 8115 8116 8117 8118 8119 8121 81211 81212 81213 8122 813 8131 814
COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Description
WBS
Closure & Rehabilitation Indirect Costs EPCM Cost EP Cost CM Cost Vendor Reps Temporary Facilities Temporary Facilities Temporary Services Temporary Services Tools, Equipment, & Consumables Tools, Equipment & Consumables Environmental, Sustainability, Safety, & Health Supplies Environmental, Sustainability, Safety & Health Supplies Temporary Camp & Catering Temporary Camp Facilities Temporary Camp Catering Freight/Traffic & Logistics Freight / Traffic / Logistics Commissioning Commissioning PROVISIONS Contingency Contingency Escalation Escalation Exchange Rate Assessments Distributions/Bulk Clearing Suspense Taxes
23.5
Presentation of the Estimate
23.5.1
Direct Cost Direct costs are shown in Table 23.5-1.
23.5.2
Indirect Cost Indirect costs are shown in Table 23.5-2
Project No.: 159742 February 2010
Page 23-39
815 91 911 9111 9112 9116 912 9120 913 9130 914 9140 915 9150 916 9161 9162 917 9170 918 9180 PP PP1 PP 11 PP2 PP 21 PP3 PP4 PP5 PP6 PP7
COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT Table 23.5-1:
Direct Costs (US$)
11 OPEN PIT MINE 111 Open Pit Mine Development 112 Open Pit Mining Equipment 113 Open Pit Mine Infrastructure 11 OPEN PIT MINE 31 ORE HANDLING 311 Coarse Ore Crushing 312 Ore Conveying 313 Coarse Ore Stockpiling 314 Ore Reclaim 315 Secondary Crushing 316 Tertiary Crushing 317 Heap Leach 31 ORE HANDLING 41 PROCESSING PLANT 411 Grinding / Milling / Classification 412 Separation / Concentrating 413 Cyanide Leaching 416 Refining 417 Lime & Reagents 419 Process Utilities 41 PROCESSING PLANT 51 TAILINGS / RECLAIM & WATER TREATMENT 511 Tailings Disposal 512 Reclaim Water 514 ARD Treatment 51 TAILINGS
Project No.: 159742 February 2010
Labour
Material
Subcontract
38,956,644 19,666,909 58,623,554
95,136,140 558,006,089 44,272,207 697,414,436
16,803,431 150,700 16,954,131
17,724,271 3,580,331 3,258,523 19,408,240 33,179,487 58,330,819 22,519,910 158,001,581
33,428,786 11,833,036 2,821,517 19,907,764 101,111,224 168,634,052 36,974,251 374,710,630
63,039,078 60,756,092 24,847,712 22,117,804 5,525,214 1,378,221 177,664,120
174,382,853 118,744,907 43,000,694 28,754,212 13,435,855 8,809,049 387,127,570
18,783,360 9,945,156 1,269,301 29,997,817
29,812,839 14,033,737 3,439,541 47,286,117
Page 23-40
Equip Amount 21,775,296
Total Amount
13,996,841 35,772,137
155,868,080 574,809,520 78,086,657 808,764,258
3,017,505 950,402 638,076 3,051,300 5,696,331 12,038,338 20,880,127 46,272,079
55,007,851 16,363,769 6,718,116 42,367,304 139,987,043 239,003,209 80,436,851 579,884,142
69,604
10,596,094 10,981,782 4,194,435 4,458,196 833,060 175,177 31,238,744
248,018,025 190,482,781 72,112,444 55,330,212 19,794,129 10,362,447 596,100,038
3,018,822 945,272 5,806,546 9,770,641
11,576,781 3,614,879 779,820 15,971,480
63,191,802 28,539,045 11,295,209 103,026,055
837,289
62,563 899,852
69,604
COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Labour
Material
Subcontract
7,175,986 4,760,279 6,924 544,570 23,960,171
412,112 27,975,308
11,254,711
61 ON-SITE INFRASTRUCTURE 611 Site Preparation 613 On-Site Non-Process Facilities 614 On-Site Mobile Equipment 615 On-Site Bulk Storage 616 On-Site Services / Utilities 617 On-Site Communications 619 On-Site Power Supply & Transmission 61 ON-SITE INFRASTRUCTURE 71 OFF-SITE INFRASTRUCTURE 711 Off-Site Roads / Water Diversions 712 Off-Site Facilities 714 Off-Site Pipelines & Bulk Storage 715 Port Facilities 716 Airport Facilities 717 Off-Site Services / Utilities 719 Off-Site Power Supply & Transmission 71 OFF-SITE INFRASTRUCTURE
6,440,652 42,888,582
12,331,337 21,669,116 11,615,590 569,298 23,975,061 997,800 39,412,848 110,571,050
6,774,749 818,463 80,730,447 13,693,795 444,850 28,281,735 2,193,454 132,937,493
1,425,519 1,712,842 91,822,827 29,926,985 361,536 10,128,377 17,633,583 153,011,670
Total Direct Cost
600,113,147
1,770,121,473
Project No.: 159742 February 2010
Page 23-41
Equip Amount
1,060,948 16,342,645
26,461,945 56,454,961 11,623,551 1,270,767 57,454,804 10,955,631 55,861,932 220,083,591
111,542,759 192,776,398
7,050,259 103,352 28,601,594 4,771,437 1,068,661 9,152,645 170,598 50,918,546
26,505,237 2,634,658 271,081,278 48,444,736 1,875,047 47,562,757 131,540,395 529,644,107
270,751,940
196,515,631
2,837,502,191
6,506 2,982,074 9,957,831 8,947,483 50,281,314
69,926.409 52,519
6,542,510 2,050,257 1,037 150,392 6,537,500
Total Amount
COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT Table 23.5-2:
Indirect Costs (US$) Labour
Material
81 OWNER'S COSTS 811 Project Costs 812 Spares and Inventory 813 Pre-Production Operations 81 OWNER'S COSTS 91 INDIRECT COSTS 911 EPCM 912 Temporary Facilities 913 Temporary Services 915 Environmental, Safety, and Health 916 Temporary Camp and Catering 917 Freight / Traffic & Logistics 918 Commissioning 91 INDIRECT COSTS PP PROVISIONS PP1 Contingency PP PROVISIONS
284,538,532 10,582,005 2,031,744 6,855,600 11,162,299
16,567,529 451,400 9,109,959 23,359,930
15,223,320 330,393,500
49,488,818
TOTAL INDIRECT COST
330,393,500
Project No.: 159742 February 2010
21,735,641 21,735,641
Subcontract
Equip Amount
274,047,109 13,528,130 10,475,652 298,050,891
274,047,109 35,263,771 10,475,652 319,786,532
25,562,883 6,341,924 55,763,638 1,222,500 1,140,000 127,870,349 211,559,370
1,409,521
7,751,444
428,000,000 428,000,000 71,224,459
Page 23-42
937,610,261
Total Amount
310,101,415 33,491,458 58,246,782 17,188,059 37,071,750 127,870,349 15,223,320 599,193,133 428,000,000 428,000,000
7,751,444
1,346,979,665
COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
23.5.3
Owner’s Costs Owner’s Costs are shown in Table 23.5-3 and exclude spares and first fills. Table 23.5-3:
Owner’s Costs (US$000’s)
Area 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
23.5.4
Aviation Camp & Catering Clinic Community/Gov. Relations Emergency Response Environmental Admin./Finance Nantoco Office Health & Safety Human Resources Insurance IT Legal/Land/Permitting General Services Management Security Training & Recruiting Waste Management Power CM Project Team/Other Subtotal Total
2010
2011
2012
2013
2014
2015
3,498
3,593 163 4,361 640 1,541 1,965 4,251 1,153 207 6,289 915 8,027 279 1,570 459 2,705 28 1 12,974 51,119
17,432 951 5,856 285 834 780 5,409 1,230 160 6,306 1,498 1,847 767 1,030 1,314 4,056 422 33 15,951 66,261
249 24,816 1,358 5,250 284 557 736 6,113 2,024 492 5,500 1,496 1,287 3,145 998 1,673 2,933 928 58 13,678 73,575
99 7,755 569 1,228 114 277 427 2,905 1,008 334 2,235 1,258 526 1,466 397 761 689 772 368 12,327 35,515
2 74 10 5 2 5 7 52 21 7 40 27 7 36 7 13 14 13 26 10,108 10,476 284,523
1,772 443 2,790 2,027 3,129 844 184 6,931 1,245 79 24,633 47,576
Sustaining Capital The sustaining capital is shown in Table 23.5-4. Table 23.5-4:
Sustaining Capital Labour
Material
Plant 2014 - Year 0
2,898,606 2,898,606
10,455,990 10,455,990
Infrastructure Mine Plant 2015 - Year 1
2,054,716 5,649,256 7,703,972
7,500,000 3,335,646 10,961,390 21,797,035
Infrastructure
27,994
8,614,800
Subcontract
Equipment
Total
5,885,711 5,885,711
19,240,307 19,240,307
463,503 6,262,717 6,726,220
7,500,000 5,876,980 34,230,998 47,607,978
6,006
8,648,800
2014 - Year 0
2015 - Year 1 23,116 11,357,635 11,380,751
2016 - Year 2
Project No.: 159742 February 2010
Page 23-43
COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Labour
Material
Subcontract
Equipment
Total
Mine Plant 2016 - Year 2
3,316,499 3,344,493
8,337,782 5,013,609 21,966,191
3,801,445 9,085,468 12,886,913
3,048,918 3,054,927
12,139,227 20,464,493 41,252,520
Mine Plant 2017 - Year 3
288,409 288,409
8,337,782 2.022.272 10,360,054
1,492,890 3,512,540 5,005,430
809.833 809.833
9,830,674 6,633,054 16,463,728
2017 - Year 3
2018 - Year 4 Infrastructure Mine Plant 2018 - Year 4
27,994 32,634 60,628
3,206,326 1,440,546 46.228 4,693,099
6,006 172,725 178,731
3,240,326 1,440,546 3,754,473 8,435,344
3,502,886 3,502,886
3,986,695 3,986,695
685.149 5,093,000 5,739,831 11,517,981
274,445 3,320,000 3,594,445
3,020,778 3,020,778
685.149 5,367,445 16,067,304 22,119,898
Infrastructure Mine Plant 2020 - Year 6
281,024 281,024
370.000 24,153,411 311.899 24,835,310
2,720,389 3,676,108 6,396,497
181,241 181,241
370.000 26,873,800 4,450,272 31,694,073
Mine Plant 2021 - Year 7
2,541 2,541
37,622,662 1.270 37,623,932
2,755,922 6.865 2,762,787
20,432 20,432
40,378,585 31,108 40,409,693
388,094 388,094
325.000 18,601,014 2.563.990 21,490,004
2,270,822 241.648 2,512,470
1,152,095 1,152,095
325.000 20,871,836 4,345,827 25,542,663
Infrastructure Mine Plant 2023 - Year 9
5,803,328 5,803,328
1.997.848 14,052,444 7,705,947 23,756,239
4,328,731 4,328,731
1.997.848 14,898,079 17,850,363 34,746,290
Mine Plant 2024 - Year 10
20.326 20.326
16,095,829 175.000 16,270,829
3.104 3.104
21,075,494 198.430 21,273,924
2019 - Year 5 Infrastructure Mine Plant 2019 - Year 5 2020 - Year 6
2021 - Year 7
2022 - Year 8 Infrastructure Mine Plant 2022 - Year 8 2023 - Year 9 845,633 12,357 857,990
2024 - Year 10 4,979,664 4,979,664
2025 - Year 11 Infrastructure
Project No.: 159742 February 2010
1.505.942
Page 23-44
1.505.942
COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Mine Plant 2025 - Year 11
Labour
Material
Subcontract
Equipment
Total
381,934 381,934
1,749,417 2.628.490 5,883,848
760,471 75.515 835,986
1,091,683 1,091,683
2,509,888 4,177,621 8,193,451
924,105 924,105
384,000 384,000
2026 - Year 12 Mine 2026 - Year 12
1,308,111 1,308,111
2027 - Year 13 Mine Plant 2027 - Year 13
428,210 4,311,469 4,739,679
2.141.000
8,150,032 8,150,032
Mine Plant 2028 - Year 14
192,033 192,033
16,298,330 1.312.280 17,610,610
2.141.000
1,791,784 1,791,784
2,569,210 14,253,285 16,822,495
2,147,903 131.808 2,279,711
572,721 572,721
18,446,233 2,208,842 20,655,075
1,325,990 1,325,990
607.000 10,897,345 11,504,345
2028 - Year 14
2029 - Year 15 Mine Plant 2029 - Year 15
607.000 6,032,568 6,032,568
3,538,787 3,538,787
607.000
0
347.000 347.000
0
347.000 347.000
60,474,530
299,988 299,988 30,443,978
1,786,824 1,786,824 369,403,718
2030 - Year 16 Mine 2030 - Year 16
0
2032 - Year 18 Plant 2032 - Year 18 TOTAL
23.5.5
1,486,836 1,486,836 41,021,518
237,463,692
Contingency Analysis Table 23.5-5 shows a summary of the calculation of the contingency. The P73 value chosen. and interpolated form the table. The Project Value excludes Owner G&A costs. The full contingency model is included in Appendix H01.
Project No.: 159742 February 2010
Page 23-45
COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE FEASIBILITY STUDY REPORT
Table 23.5-5:
@Risk Contingency Calculation Summary Reference Information @Risk Results for P5 to P95
Project Value
Contingency
Percent
Project Value
Contingency
Percent
5% Perc =
3,549,652,992
131,961,492
3.86%
55% Perc =
3,748,616,448
330,924,948
9.68%
10% Perc =
3,588,240,384
170,548,884
15% Perc =
3,615,854,080
198,162,580
4.99%
60% Perc =
3,764,021,248
346,329,748
10.13%
5.80%
65% Perc =
3,779,176,448
361,484,948
10.58%
20% Perc =
3,637,052,416
219,360,916
6.42%
70% Perc =
3,795,176,448
377,484,948
11.05%
25% Perc = 30% Perc =
3,656,746,240
239,054,740
6.99%
75% Perc =
3,814,959,104
397,267,604
11.62%
3,674,414,336
256,722,836
7.51%
80% Perc =
3,836,253,440
418,561,940
12.25%
35% Perc =
3,688,833,024
271,141,524
7.93%
85% Perc =
3,858,158,848
440,467,348
12.89%
40% Perc =
3,704,398,592
286,707,092
8.39%
90% Perc =
3,889,442,304
471,750,804
13.80%
45% Perc =
3,718,737,664
301,046,164
8.81%
95% Perc =
3,930,262,016
512,570,516
15.00%
50% Perc =
3,732,274,176
314,582,676
9.20%
-
-
-
-
23.5.6
Expenditure Code Reports The Feasibility Study estimate has been coded using CMC expenditure codes. The coding is being reviewed and the required reports will be produced. In addition, further work will be undertaken to improve the quality of the coding and the compatibility of the coding system with the project.
23.6
Risk In the capital cost estimate risk associated with potential variations in the estimate inputs is addressed in the contingency. These are areas such as labour rates, labour productivity, design status, market conditions, equipment prices and material prices. Risk associated with project execution is addressed in Chapter 22, Execution Plan.
Project No.: 159742 February 2010
Page 23-46
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