Costa Copper Mining Co.

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Costa Copper Mining Co.

• Tidal Wave Mine Project
• Feasibility Study

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Brief Overview

• Copper Deposit
• Madison County, Montana
• Resources
• 160 million tons at 0.77 copper
• Open Pit Mining Method
• Copper Flotation Mill
• Profitable at 1.20/lb. Copper price

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Location Access

• Madison County, Montana
• Tidal Wave Mining District
• Bear Gulch
• Access on Bear Gulch Road
• From Twin Bridges

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Location - Montana
Tidal Wave Project Location
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Location - Vicinity
Tidal Wave Project Location
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Climate

• Temperatures
• Annual Max. 58.1F
• Annual Min. 27.8F
• Annual Mean 43.0F
• Precipitation
• Annual Average of 9.67 inches
• Average Snowfall of 11.0 inches

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Geology Mineralization

• Paleozoic Sedimentary Rock
• Intruded by Outlier of Boulder Batholith
• Primarily Limestone

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Resources

• 102 RC Drill Holes
• 4,286 samples taken
• 4,250 samples with mineralization
• No Statistical Distribution Found
• Basic statistics
• Mean 0.83 Copper Grade
• ID2 Method used for block filling
• 50x50x50 size blocks
• 148 Million Tons Averaging 0.83 Copper
• excludes any blocks with grades lt 0.1

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Mining

• Open Pit Mining Method
• Stripping Ratio is 2.11
• 160 million tons of Copper ore _at_ 0.77
• 8 internal dilution
• Capacity
• Ore 10.8 million tons per year
• 42 thousand tons per day
• 260 working days per year
• 2-10 hour shifts per day

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Pit Parameters

• Overall pit slope angle of 47
• Bench face angle of 70
• 50 foot bench height
• Haul road width of 100 feet
• Haul road Gradient of 8
• Pit bottom 6450 elevation
• Pit crest 7350 elevation

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Pit Design
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Mining Production
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Mining Equipment

• Haul Trucks
• R190C Euclid 190 Ton Capacity
• 20 trucks years 1 to 10
• 22 trucks years 11 to 15
• Shovels
• Hitachi Super EX3500
• 3 shovels for entire mine life
• replace 2 after 7 years

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Equipment List
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Drilling Blasting

• 2 - Ingersoll-Rand DM-M2 rotary drills
• 9-7/8 inch diameter blastholes
• 21 x 21 spacing/burden pattern
• Blast Patterns
• 65 holes years 1 through 5
• 55 holes years 6 through 15

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Daily Blasting Agents
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Minerals Processing

• Copper Flotation Mill
• 90 recovery
• 35,000 tons/day throughput
• 900 tons/day concentrate
• average grade of 27 Copper
• 35,100 tons/day of makeup water
• 240 gallons H20/ton of ore
• Total Mill Concentrates 4.1 million tons

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Mill Costs

• Operating cost of 3.17/ton
• includes
• labor, supplies, electrical equipment, and other
• Electrical Consumption
• 20kWh/ton at power cost of 0.05/kWh
• Capital Cost of 208 million

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Smelter Contract Transportation

• Phelps Dodge, Hidalgo Smelter
• Playas, New Mexico
• Contract Specs
• pay for 96.6 of contained copper
• 50/dry metric ton treatment charge
• 0.05/lb of payable copper refining charge
• Net smelter return of 2.3 billion
• Transportation, 1,350 miles from project
• 50/ton by rail
• Total cost of 224 million

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Site Preparation

• Buildings very little leveling work needed
• approximately 3.6 million square feet of area
• Haul Road Improvements
• Tailings Impoundment
• Waste Dump
• Power Line
• Fence
• Rail Spur

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Employment

• 311 hourly salaried
• 236 hourly
• average yearly wage 44,700
• 75 salaried
• average yearly salary 65,000
• No housing will be supplied
• Housing in Butte
• Transportation will not be provided

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Pre-Production

• Six year pre-production phase
• Baseline 1 year (2000)
• EIS 3 years (2001-2003)
• Permitting 1 year (2003)
• Development 2 years (2004-2005)
• First year of production (2006)

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Pre-Production Schedule
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Environmental

• Baseline Study (1 Year)
• Studies
• Soils, Vegetation, Air Quality, Wildlife,
  Surface, Noise, Visual, Social,
  Cultural/Historical
• estimated cost of 1 million
• EIS (3 years)
• estimated cost of 1 million per year
• Permitting (1 year)

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Project Permits

• Permits Required
• estimated 75,000
• 1 year

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Reclamation

• 3700 acres of disturbed land
• Concurrent recl. Of waste dump
• estimated 250 thousand/year
• Total cost for reclamation is 10 million
• Established Reclamation Sinking Fund
• 6.25 million sinking fund
• Annual payments of 249 thousand

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Financial

• Development Costs
• Total cost is 38 million
• Capital Costs
• Initial Equipment cost is 71.6 million
• Building cost is 184.5 million
• Initial Capital Expenditures
• 256 million

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Financial - Operating Costs

• Average yearly cost 70 million
• Equipment
• 11.5 million/year (Years 1 - 10)
• 12.3 million/year (Years 11 - 15)
• Mill is 34 million per year
• includes labor
• Blasting cost is 47.4 million
• Mine Wages
• Hourly wages 6.6million
• Salaried wages 3.4million

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Revenue

• Net Smelter Return at price of 1.20/lb
• Total 2.3 billion
• Yearly Average 150 million

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Economic Analysis

• Cash Flow Statement at 1.20/lb Cu
• Rate of Return of 12.66
• Net Present Value 20 million
• Hurdle rate of 10
• Cumulative Net Cash Flow 300 million
• Make money in 8th year of production

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Cash Flow Comparison
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Project Operating Costs

• Operating Cost per Ton
• 10.00/Ton (years 1 - 10)
• 8.97/Ton (years 11 - 15)
• Cost per Pound Metal
• 0.60/lb (years 1 - 10)
• average grade of 0.83 Copper
• 0.60/lb (years 11 - 15)
• average grade of 0.75 Copper

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Sensitivity Analysis

• Sensitive to Copper Price
• Cash flow trials at different copper prices
• 0.84, 1.00, 1.20, and 1.50 per pound
• Break Even Price
• 1.18/lb with Hurdle rate of 10

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Price Sensitivity
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Recommendation's

• More Exploration
• Pit Optimization
• Haul Road Exit from Pit
• Waste Dump Placement
• Improve equipment Selection
• Mine Operating Hours