Focus Ventures (FCV.V) has released an updated resource estimate at its Bayovar 12 phosphate project in Northern Peru. The updated resource estimate currently contains 435 million wet tonnes of phosphate at an average grade of 13% P2O5. The total amount of dry tonnes is just over 325 million tonnes (of which roughly 105 million tonnes are situated in the upper five layers of the mineralization) which would ensure a total mine life of in excess of 100 years. And keep in mind this is based on just 1/5th of the total land package.
We are very pleased with this resource update as 1) it confirms our expectations the mineralized system is very extensive, 2) it confirms the average grade of the system and 3) the resource is now more reliable as 70% of the total amount of dry tonnes is now located in the measured and indicated resource estimate which should result in a multiple-decade mine life in the pre-feasibility study which should be completed before the end of this year.
It will be extremely important to see if Focus Ventures will be able to produce DAPR with a minimal capital expenditure and a low operating cost per tonne. We would be aiming to see a capital expenditure of $30M for a 300,000 tonnes per annum operation, and we’d hope this will allow Focus to produce DAPR at an operating margin of at least $50/t. The most exciting part of the Bayovar 12 project is that the production rate could easily be increased and Focus should be able to ramp the production rate up to 1 million tonnes per year funded by internally generated cash flow.
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Disclosure: The author holds a long position in Focus Ventures. Focus Ventures is a sponsor of the website. Please see our disclaimer for current positions.
