cc 23 capital cost rev 8.1

COMPAÑÍA MINERA CASALE

CERRO CASALE PROJECT, CHILE

Project No.: 159742February 2010

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C O N T E N T S

23.0 CAPITAL COSTS ................................................................................................... 23-123.1 Summary .................................................................................................... 23-123.2 Estimating Method and Accuracy Range ................................................... 23-5

23.2.1 Estimate Accuracy........................................................................ 23-523.2.2 Estimate Quality ........................................................................... 23-523.2.3 Estimating System........................................................................ 23-523.2.4 Estimate Level of Detail................................................................ 23-523.2.5 Contingency ................................................................................. 23-8

23.3 Basis of Estimate ........................................................................................ 23-823.3.1 Estimate Strategy ......................................................................... 23-823.3.2 Definition of Costs ........................................................................ 23-923.3.3 Base Date and Exchange Rates ................................................ 23-30

23.4 Work Breakdown Structure....................................................................... 23-3123.5 Presentation of the Estimate .................................................................... 23-39

23.5.1 Direct Cost.................................................................................. 23-3923.5.2 Indirect Cost ............................................................................... 23-3923.5.3 Owner’s Costs ............................................................................ 23-4323.5.4 Sustaining Capital ...................................................................... 23-4323.5.5 Contingency Analysis ................................................................. 23-4523.5.6 Expenditure Code Reports ......................................................... 23-46

23.6 Risk........................................................................................................... 23-46

T A B L E S

Table 23.1-1: Initial Capital Cost Summary ................................................................................... 23-3Table 23.1-2: Sustaining Capital Cost Summary........................................................................... 23-3Table 23.1-3: Initial Capital Expenditure Schedule (US$000’s) ..................................................... 23-4Table 23.1-4: Life of Mine Sustaining Capital Expenditure Schedule (US$000’s) ......................... 23-4Table 23.2-1: Estimating Standard for Feasibility Study................................................................ 23-6Table 23.3-1: List of Subconsultants and Areas ............................................................................ 23-8Table 23.3-2: Level of Material Take-off Information Development ............................................ 23-10Table 23.3-3: Growth and Waste Factors.................................................................................... 23-17Table 23.3-4: Labour Productivity Factors................................................................................... 23-26Table 23.3-5: Labour Rate Build-Up (US$).................................................................................. 23-28Table 23.3-6: List of Labour Rates .............................................................................................. 23-29Table 23.3-7: Construction Equipment Costs .............................................................................. 23-29Table 23.3-8: Standard CMC Discipline Codes ........................................................................... 23-30Table 23.3-9: Project Exchange Rates ........................................................................................ 23-31Table 23.4-1: Work Breakdown Structure (WBS) ........................................................................ 23-32Table 23.5-1: Direct Costs (US$)................................................................................................. 23-40Table 23.5-2: Indirect Costs (US$) .............................................................................................. 23-42Table 23.5-3: Owner’s Costs (US$000’s) ................................................................................... 23-43


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Table 23.5-4: Sustaining Capital.................................................................................................. 23-43Table 23.5-5: @ Risk Contingency Calculation Summary............................................................ 23-46

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23.0 CAPITAL COSTS

23.1 SummaryThe Cerro Casale feasibility level capital cost estimate is a complete re-estimate of the project. The capital cost estimate is based on 2nd 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, ExecutionPlan.

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 Section23.3.2.17.

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.

Contingency was evaluated using @Ris k T M 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

Description Area Cost(US$000’s)

Direct Cost

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 71 529,644

Total Direct Cost 2,837,502

Total Owners’ Cost 81 319,787

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

Total Indirect Cost & Owner’s Cost 918,9801

Total Direct, Indirect Cost, & Owner’s Cost 3,756,482

Contingency PP1 428,000

Total Provisions 428,000

Total Capital Cost 4,184,482The $4.2 billion capital cost estimate includes approximately $319 million that is expensed in the financial model asincurred, 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

Description Cost(US$000’s)

Direct Cost

Sustaining Capital − Mine 184,540

Sustaining Capital − Process 160,591

Sustaining Capital − Infrastructure 24,273Total Sustaining Capital Cost 369,404


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Table 23.1-3: Initial Capital Expenditure Schedule (US$000’s)

Project CapitalYears

Total2010 2011 2012 2013 2014 2015

Mine 1,445 101,176 318,935 244,956 142,253 0 808,764Process inc. HL andSART 21,688 134,267 609,850 413,801 99,404 1,279,010

Infrastructure 4,975 34,030 573,849 128,258 8,616 0 749,728Owner's Costs 47,576 51,119 66,621 73,575 35,515 10,476 284,523Indirect Cost 43,391 138,266 261,722 92,455 95,355 3,268 634,457Contingencies 8,814 50,263 217,498 108,415 42,607 403 428,000Subtotal by Year 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 2022Sustaining 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

Sustaining Capital −Infrastructure

- 7,500 8,649 - 3,240 685 370 - 325

Subtotal Sustaining Capital 19,240 47,608 41,253 16,464 8,435 22,120 31,694 40,410 25,543

Production YearsProject Capital 2023 2024 2025 2026 2027 2028 2029 2030 2032Sustaining 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 Range23.2.1 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 summary level. The estimate is in 2nd 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 therequirements of the Association for the Advancement of Cost Engineering International(AACE) standard for feasibility studies and CMC’s scope of work document dated11 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 StudyActivity Engineering Status

Resources & ReservesResource Declaration Yes

Reserve Declaration Yes

MiningMining Rate Annual LOM

Mining Method Final

Waste Management Plan Optimized

Mine Design OptimizedEquipment Selection Optimized

Geotechnical Studies Detailed

ProcessingMineralogical Work CompletedBench Testwork Completed (see exception 29.2)

Pilot Testwork Recommended (HL ROM testing in progress)

Flowsheets Detailed

P & Ids PreliminaryPermitting & Environmental ControlBaseline 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 CompletedDesign Criteria Completed

Site Layout Optimized

Commodity/Warehouse Strategy Optimized

Equipment Selection OptimizedElectrical 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 OptimizedTailings Dam/Leach Pads Detailed

Percentage of Engineering Complete 10% to 40% (20%)

Capital Cost EstimateUnit Manpower Rate First Principles WorkupConstruction Unit Rates First Principles Workup

Material Barrow Sources Identified

Major Equipment Multiple Quotations

Minor Equipment Similar FactoredEquipment 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 WorkupWarehousing & Insurance Spares First Principles Workup

Contingency Risk Based (@Risk analysis)

Project Implementation PlanProject Management Approach DefinedProject Management Organizational Chart Preliminary

Project Schedule Level 2

General Project Implementation Plan Detailed

Contracting Strategy PreliminaryProcurement Plan Preliminary

Logistics Plan Detailed

Construction Manpower Estimate Detailed

Construction Infrastructure Plan PreliminaryProject Team HR Plan Preliminary

OperationsOrganization Structure & Workforce Build-Up Detailed

Training Plan DetailedIT 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 Estimate23.3.1 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 AreasSubconsultants Areas

Arcadis Geotecnica SA TailingsGhisolfo Off-site roadsPipe Systems Incorporated (PSI) Concentrate pipeline, well field to Cerro Casale pipelineSRK Consulting Piedra Pómez wellsPiteau Associates Pit dewatering and seepage controlAusenco HPGR (engineering review)BGC Geotechnical and GeohazardGeocen Topographical SurveysUltragestion 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: Level of Material Take-off Information Development

Discipline Discipline Description% Basedon Detail

MTOs% Based

on Factors

1 Civil – Tailings Facility 100% -1 Civil – Plant Site 100% -1 Civil – Port Site 100% -6 Overland Pipe 100% -1 Structural Excavation/Backfill 90% 10%2 Concrete – Plant Site 95% 5%2 Concrete – Port Site 95% 5%3 Steel – Plant Site 90% 10%

3 Steel – Port Site 90% 10%4 Architectural - Structures 100% -4 Architectural – Furnishings 0% 100%

4 Architectural – Warehouse Binning &Racking 100% -

5 Mechanical – HVAC 0% 100%

5 Mechanical – Equipment 80% 20%5 Mechanical – Plate Work 80% 20%5 Mechanical – Tanks 80% 20%

6 Process Piping – Small Bore < 4” – Within the battery limits of the plant 0% 100%

6 Process Piping – Large Bore >4” – Withinthe battery limits of the plant 100% -

6 Process Piping – Large Bore outside ofBattery limits of the plant 100% -

7 Electrical – High Voltage 100% -7 Electrical – Medium Voltage 50% 50%

7 Electrical – Low Voltage, Grounding & Lighting 85% 15%

7 Electrical – Overland Transmission 100% -

8 Instrumentation – within the battery limits of the process plant 50% 50%

8 Instrumentation – Controls –DCS/Communications/PCL 50% 50%

4 Paintings and Coatings 0% 100%4 Insulation 0% 100%7 Power Lines - Onsite 80% 20%6 Concentrate, Water and Fuel lines 100% -1 Tailings Storage Facility 100% -1 Water Management 100% -


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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 <30 kg/m – TK011 Platform”. This description facilitated review of the estimate and allows further coding and budget control if required.

23.3.2.1 Civil

All earthworks quantities were taken off. Unit rates were based on AMEC’s standard database with a calculated adjustment for the high altitude Chilean location. Unit prices were received from contractors familiar with work in Chile and in the South American market and benchmarked against AMEC’s experience in Chile to verify the estimate prices.

Mass earthworks estimates were based on quantities generated from the site plans. These quantities included such items as cut and fill, drilling and blasting, and topsoil stripping. Quantities calculated for the plant site were based on 1 m contours. Detail excavation and backfill quantities for buildings and structures and were developed for each area and based on estimated foundation sizes.

It was assumed that major excavation and fill required to establish the rough grades for the entire plant would be self performed by CMC’s pioneering equipment fleet. The cost and required schedule for this work were developed by the mining group in conjunction with the engineering group and the construction group. This resulted in a significant schedule and cost savings to the project.

Aggregate costs were developed based on identified aggregate sources located within the plant site envelope. Allowances for hauling materials were made based on the haulage distance from the sources. Costs include loading, crushing, screening, and delivery to the area of use.

Fencing quantities included the plant site and other perimeter security fences and electrical substation enclosures shown in the drawings.


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The reference documents for the civil take-offs were the following:

• survey reports by area• reports from PDMS• drawings and sketches• geotechnical studies.

23.3.2.2 Civil Piping

Civil piping quantities were determined from layouts and site drawings. Quantities were provided by engineering and included piping specification, size, and length. If the pipe was buried, quantities of excavation and backfill were provided. Overland piping such as tailings lines or reclaim water lines were quantified separately. Installation for on-site civil piping was based on AMEC’s standard work hours adjusted for the Chilean high altitude location.

Material pricing for civil and infrastructure piping was obtained from vendor budget quotations. The material take-off allowance used for overland piping and underground piping was 4%. A unit cost for hydro-testing was included.

23.3.2.3 Concrete

Concrete quantities were determined from layout drawings and conceptual concrete sketches and were to neat lines with no allowances for over-pour or wastage.

All concrete was classified into standard shapes. Quantities were provided for these shapes by engineering.

An average formwork usage and rebar requirement for each classification of concrete was used as the basis for pricing based on the seismic rating at the sites. Concrete unit costs were split into concrete, reinforcing steel, formwork, and embeds to facilitate the evaluation of the estimate. The concrete price included supply of ready-mix concrete from the ready-mix batch plant. A 5% allowance was included for over-pour and wastage.

The concrete price was developed from first principles based on CMC-supplied batch plants.

Formwork was estimated for each classification of concrete. Allowances were made for form oil, accessories, shoring, and formwork materials as required. The unit price also included the fabrication, installation, stripping, and cleaning of formwork.

Reinforcing steel unit costs for installation were derived from local Chilean contractors and were estimated for each classification of steel on a kilogram per cubic metre basis. The unit price for supply is based on AMEC experience on recent projects and included


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the preparation of detailed drawings, supply of material, field bending, accessories. Installation of the reinforcing steel was estimated separately from concrete and formwork.

23.3.2.4 Structural Steel

Structural and miscellaneous steel quantities were developed directly from general arrangement (GA) and layout drawings where the design was sufficiently advanced. All other areas were developed from preliminary design data and sketches. An allowance was made for connections, stiffeners, clips, hardware, and base plates. For light steel the allowance was 16%, for medium steel the allowance was 12%, for heavy steel the allowance was 10% and for extra heavy steel the allowance was 6%.

Material supply, detailing, shop pre-fabrication, and painting of a primer coat were included in the material unit costs which were quoted by Chilean and Chinese steel suppliers. Labour hours shown in the estimate are for field erection.

23.3.2.5 Architectural

The project building list was used to identify the size and materials of construction for non-process buildings, ancillary facilities, containerized electrical rooms, pre-fabricated unit control rooms, and offices. Costs for the pre-fabricated modular buildings, camps, and containerized electrical rooms were based on budget vendor quotes for design and supply only. A labour cost was supplied for setting these units on prepared foundations. Where quotes were not available costs were estimated on a U.S. dollars per square metre basis.

Allowances for furnishings cost (fit-out) was made for each building for its intended usage. Laboratory, office, and shop equipment material costs with work hours for assembly and/or installation were estimated by AMEC.

Stick-built buildings were identified and estimated based on the MTOs. These costs appear in each discipline account.

HVAC systems were estimated on a U.S. dollars per cubic metre basis.

23.3.2.6 Process Plant Mechanical and Mobile Equipment

The process mechanical equipment list showed tagged equipment by area. All equipment prices were based on new equipment.

Major equipment costs were obtained from written quotations submitted by several vendors, with tendered vendor quotations representing approximately 88% of the total mechanical equipment cost. Estimates for minor equipment were based on AMEC in-house data for recently completed or quoted projects. Equipment costs were quoted ex-factory with tagged equipment identified as either an in-country or imported purchase.


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All equipment was tagged as to country of origin. This classification was the basis to estimate the freight and duty costs included in the CM indirect costs.

The engineering group performed technical reviews, the procurement group provided commercial reviews, and recommended prices were provided to the estimating group. These prices were factored with a recommended purchase growth allowance. This growth allowance was 2% for equipment greater than US$2 million and 5% for equipment less than US$2 million. Site hours for equipment installation labour were derived from AMEC’s standard chart of labour productivities and factored for productivity loss.

The estimate for process plant mobile equipment was based on the equipment MTO developed by engineering. Pricing for this equipment was derived from vendor quotations, recent projects, and AMEC’s database. Assembly labour was applied where applicable.

23.3.2.7 Platework

Platework quantities were derived from process flow diagrams and the equipment list. In addition, sketches from other similar projects were used as the basis for the estimated quantities for bins, skirting, launders, chutes, and pump boxes. The platework was priced on a cost per kilogram basis from vendor budget quotations.

Field fabricated tank costs were based on budget quotations for supply and erection from Chilean fabricators familiar with the area. Savings from pre-assembly were addressed separately in the Modularization Study located in Appendix W06, Shop fabricated tanks were based on a unit cost per kilogram with quantities furnished by AMEC. A growth allowance of 5% was applied to field fabricated and field erected tanks.

23.3.2.8 Piping

Process piping within the battery limits of the process plant was based on MTOs above 4” diameter and on equipment factor allowances below 4” diameter. The factor was applied to the material cost only. The base documents were plot plans, flowsheets, and GA drawings.

Valve costs were based on valve list taken off in detail to ½” and larger.

AMEC’s chart of unit work hours was used for all piping systems outside the battery limit of the process plant and piping 4” and above in the process plant including piping on racks and pipes. Overland piping costs shown in the civil piping account were estimated in detail to reflect the repetitive nature of long runs.


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23.3.2.9 Electrical

The development of the electrical costs was based on the electrical equipment list and single line diagrams.

Electrical equipment pricing was based on vendor budget quotations. The mechanical equipment list was used to cross check for other pieces of equipment or packages requiring power.

Electrical costs within the battery limits of the process plant were based on equipment factor allowances and include costs downstream of the MCCs. High and medium voltage cabling for distribution systems were quantified and estimated in detail.

Outside services including overhead lines, substations, and transformers to and within theMCCs (in the process plant area) were taken off in detail by the electrical group.

23.3.2.10 Instrumentation

Instrumentation within the battery limits of the process plant were based on an instrument list. The instrument list was prepared based on the preliminary P & IDs. An instrumentation allowance for bulks was based on equipment factor allowances.

The plant distributed control system (DCS) and programmable logic controller (PLC) costs were based on budgetary quotations and include vendor support for programming and system configuration. Anticipated growth in the cost of the system was reviewed with the engineering group.

Off-site fibre optic cables and on-site fibre optic cables were estimated from MTOs provided by engineering.

Communications equipment was based on budgetary quotations

Estimates were developed for the fire detection and alarm system, radio system, and security/CCTV systems. The cost of these systems was estimated based on budgetary quotation provided by a third party or an allowance was made.

23.3.2.11 Insulation and Coatings

Structural steel will be procured with a coating of primer applied. The cost of primer was included in the unit rates for the material. Painting and touch-up allowances for structural steel were factored from the tonnage of steel and the length of stairs, handrail, and kick plate by area.


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23.3.2.12 Material Pricing

Budgetary pricing from Chilean and international companies were obtained for this project. The information received about commodities was the basis for estimates for the supply and/or fabrication of commodities such as supply of rebar, mechanical and electrical tagged items, structural steel, and platework.

23.3.2.13 Mining Equipment

Major mining equipment prices were obtained from vendor quotes through a joint effort between CMC and AMEC personnel. Major equipment costs were obtained from written quotations submitted by several vendors. Equipment costs were quoted ex-factory with each equipment piece identified as an in-country or imported purchase. All equipment was tagged as to country of origin. This classification was used to estimate the freight costs. Copies of the quotations are included in Appendix H02

23.3.2.14 Subconsultants Pricing and Coordination

AMEC coordinated the estimating efforts with subconsultants for the following:

• battery limit definitions and locations• integrated construction and logistics plans• earthmoving integrated plan• integrated construction indirect plan – freight, facilities, temporary laydown, and roads• coordination of labour rates, labour productivities, and commodity pricing• coordination of level of detail and accuracy required• joint estimate review sessions.

AMEC provided each subconsultant a template to calculate labour hours, material costs, contractor costs, construction equipment, and indirect costs.

23.3.2.15 Growth and Waste Factors

The wastage factors shown in Table 23.3-3 were added to the MTOs by engineering or estimating.


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Table 23.3-3: Growth and Waste Factors

Discipline Factor(%) Remarks

Earthworks 5 Over excavation

Concrete 5Concrete supply contract includes for over-pour andwastage

Structural Steel 10 to 16 To cover connections, base plates, and gussetsProcess Equipment >$2,000,000 2 Design growth on equipment quoteProcess Equipment <$2,000,000 5 Design growth on equipment quoteProcess Piping 4 Piping outside the battery limits of the process plant

Process Piping 4Piping within the battery limits of the process plant wasbased on MTOs > 4”

Overland Piping 4 Pipe and fitting routing allowance

Piping Small BoreVaries by

area Small bore pipe was factored < 4”

Electrical 5 Growth on equipmentElectrical 5 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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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 non- standard 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 AMECprocurement and the duties were calculated. Due to Chilean foreign trade agreementsthe 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 planned60 hour work week. If there was no information available then a factor was used.


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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 over20 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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• 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 Structural, Mechanical, Electrical, Concrete, DetailExcavation, Piping

Besalco Massive Earthworks Ready Mix Concrete Batch PlantJavier Cortes 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 Table23.3-4. 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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Table 23.3-4: Labour Productivity Factors

Prime Account

Mine/Plant Site

Construction Multiplier

Port/NantocoMultiplier

Heavy Earthworks 2.0 2.0Civil Piping 2.0 2.0Structural Excavation & Backfill 2.0 2.0

Concrete 2.7 2.2Structural Steel 2.8 2.3Architectural Outside 2.8 2.3Process Equipment 2.8 2.3Secondary Equipment 2.3 1.8Conveyors 2.0 1.5Piping 2.6 2.1Electrical 2.8 2.3Instrumentation 2.8 2.3

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 Table23.3-8


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COMPAÑÍA MINERA CASALE CERRO CASALE PROJECT, CHILE

FEASIBILITY STUDY REPORT

Table 23.3-5: Labour Rate Build-Up (US$)1 1 2 3 4 5 6 7 8

Mass EarthworkHeavy Misc. Civil Concrete Structural

Steel A rc hit e ctural Mechanical Piping Electrical Instruments

Crew Rate 7.78 9.26 8.45 10.41 9.65 10.19 11.26 9.63 10.31Construction FacilitiesTemporary Work Area 0.12 0.15 0.13 0.18 0.15 0.15 0.15 0.15 0.16Temporary Roads & Parking 0.03 0.05 0.05 0.06 0.11 0.08 0.12 0.08 0.02Temporary Buildings 0.25 0.33 0.33 0.34 0.41 0.35 0.35 0.35 0.35Minor Temp. Construction - - - - - - - - -Construction Plants - - - - - - - - -Temporary Utilities 0.33 0.35 0.35 0.35 0.35 0.37 0.45 0.37 0.36Weather Protection - - - - - - - - -Scaffold - - - - - - - - -Subtotal 0.73 0.88 0.86 0.93 1.01 0.95 1.07 0.95 0.89Construction SupportOperation Cost & Site Supervision 4.81 5.72 5.22 6.44 5.96 6.30 6.96 5.95 6.37Personal Transport 2.62 2.62 2.62 2.62 2.62 2.62 2.62 2.62 2.62Site Services (QA/QC, Safety & Health, Security) 1.21 1.45 1.32 1.62 1.51 1.59 1.76 1.50 1.61General & Final Clean Up - - - - - - - - -Warehousing 0.39 0.46 0.42 0.52 0.48 0.51 0.56 0.48 0.52Craft Training - - - - - - - - -Safety Orientation+HSE+Drug Test - - - - - - - - -Clean-up 0.23 0.28 0.25 0.31 0.29 0.31 0.34 0.29 0.31Non Productive Labour - - - - - - - - -Pre-op Testing Support 0.14 0.17 0.15 0.19 0.17 0.18 0.20 0.17 0.19Subtotal 9.40 10.70 9.99 11.70 11.03 11.50 12.44 11.01 11.61CampProvides Food, Soft Drinks & LodgingSubtotal - - - - - - - - -Construction EquipmentEquipment (Incl Fuel, Maint, Mob/Demob) 21.90 4.13 4.13 5.76 3.58 4.50 6.73 1.41 1.13Tools 0.47 0.56 0.51 0.62 0.58 0.61 0.68 0.58 0.62Diesel Generator Fuel - - - - - - - - -Consumables 0.39 0.46 0.42 0.52 0.48 0.51 0.56 0.48 0.52Control & Safety Supplies, Protection & Signs-Construction 0.13 0.16 0.15 0.16 0.15 0.16 0.18 0.17 0.17Subtotal 22.88 5.31 5.21 7.07 4.79 5.78 8.15 2.64 2.43Overtime -Scheduled Overtime - - - - - - - - -Subtotal - - - - - - - - -Other ExpensesPurchased Power 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17Purchased Water 0.20 0.22 0.20 0.25 0.24 0.25 0.26 0.22 0.24Subtotal 0.37 0.39 0.37 0.42 0.41 0.42 0.43 0.39 0.41Contractors O & PContractor Overhead + Profit (20%) 8.23 5.31 4.97 6.11 5.38 5.77 6.67 4.92 5.13Subtotal 8.23 5.31 4.97 6.11 5.38 5.77 6.67 4.92 5.13Total Contract Indirects 41.62 22.57 21.40 26.22 22.62 24.42 28.75 19.92 20.47% Contractor Indirect versus wage rate (%) 535 244 253 252 234 240 255 207 199Total Rate 49.40 31.84 29.85 36.64 32.27 34.61 40.01 29.54 30.78Crew Rate − Direct before Mark-up 7.78 9.26 8.45 10.41 9.65 10.19 11.26 9.63 10.31Crew Rate − Direct 19.72 18.45 17.27 20.46 19.04 19.92 22.03 18.50 19.34Labour 27.50 27.71 25.72 30.87 28.69 30.10 33.28 28.13 29.65Construction Equipment 21.90 4.13 4.13 5.76 3.58 4.50 6.73 1.41 1.13Total Labour All-In 49.40 31.84 29.85 36.64 32.27 34.61 40.01 29.54 30.78




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Table 23.3-6: List of Labour RatesPrime

Account Area Rate/Work HourPlant (US$/h)

Rate/Work HourPort (US$/h)

1 Mass Earthworks $27.50 $24.371 Civil Piping $27.71 $24.041 Structural Excavation/Backfill $27.71 $24.042 Concrete $25.72 $22.403 Structural Steel $30.87 $26.764 Architectural & Buildings $28.69 $24.795 Process Equipment $30.10 $26.115 Bulk Mechanical Equipment $30.10 $26.11

5 Tanks and Vessels $30.10 $26.11

6 Piping $33.28 $28.847 Electrical $28.13 $22.438 Instrumentation $29.65 $23.17

Table 23.3-7: Construction Equipment CostsPrime Account US$/h

1 Mass Earthworks Varies1 Civil Piping $4.131 Detailed Structural Excavation & Backfill Varies2 Concrete $4.133 Structural Steel $5.764 Architectural $3.585 Mechanical $4.505 Mechanical Bulks $4.505 Tanks & Vessels $4.506 Piping $6.737 Electrical $1.418 Instrumentation $1.13

Note: Mass and structural earthmoving equipment based on contractor equipment rates


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Table 23.3-8: Standard CMC Discipline CodesCode Discipline

1 Civil2 Concrete3 Structural Steel4 Architectural5 Mechanical6 Piping7 Electrical8 Instrumentation9 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

The estimate is based on 2nd 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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Table 23.3-9: Project Exchange RatesCurrency Unit/US$

Canadian Dollar (CAD) 1.15Australian Dollar 1.33S. African Rand 9.00Euro (European Union) 0.714Chilean Peso (CLP) 500Peruvian Sol 3.10Argentina Peso 3.50China RMB 6.80Brazilian Real 2.00Russian Ruble 31PNG “PGK Kina” 2.75DR Peso 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 commercialactivities.)

23.4 Work Breakdown StructureThe 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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Table 23.4-1: Work Breakdown Structure (WBS)Description WBS

MINING 1Open Pit Mine 11Open Pit Mine Development 111Open Pit Mine Development 1110Pre Stripping 1111Mine Stockpiling 1112Waste Dumps 1113Open Pit Development Common Facilities & Services 1119Moveable Unitary Substations 11191Open Pit Mining Equipment 112Open Pit Mining Equipment 1120Drilling Equipment 1121Loading Equipment 1122Hauling Equipment 1123Support Equipment 1124Mine Maintenance Equipment 1125Dispatch System 1126Open Pit Mine Infrastructure 113Open Pit Mine Infrastructure 1130Mine Roads 1131Pioneering 1132Dewatering 1133Truckshop 1134Explosive Magazine 1135Mine Stockpiling Platforms 1136Planning and Exploration 1137Mine Facilities & Services (offices, canteen, refuges, & first aid) 1139Truck Wash Pad 11391Truck Fuel Station 11392Guard House 11393In-Pit Material Handling 114In-Pit Material Handling 1140In-Pit Crushing 1141In-Pit Conveying 1142In-Pit Material Handling Facilities & Services 1149Ore Handling 31Coarse Ore Crushing 311Coarse Ore Crushing 3110Primary Crushing 3111Primary Crushing Ore Handling 3112Primary Ore Crushing Facilities & Services 3119Ore Conveying 312Ore Conveyors 3121Ore Conveying Facilities & Services 3129


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Description WBSCoarse Ore Stockpiling 313Stockpile 3131Tripper 3132Coarse Ore Stockpiling Facilities & Services 3139Ore Reclaim 314Ore Reclaiming 3141Ore Reclaim Facilities & Services 3149Secondary Crushing 315Secondary Crushing 3151Secondary Crushing Ore Handling 3152Secondary Crusher Ore Storage 3153Secondary Crushing Facilities & Services 3159Tertiary Crushing 316Tertiary Crushing 3161Tertiary Crushing Ore Handling 3162Tertiary Crushing Ore Storage 3163Tertiary Screening 3164Tertiary Oversize Storage 3165Tertiary Crushing Facilities & Services 3169Heap Leach 317Heap Leach Pad 3171Heap Leach Solution Distribution 3172Heap Leach Stacking & Conveying 3173Heap Leach Facilities & Services 3179Processing Plant 41Grinding/Milling/Classification 411Primary Grinding 4111Pebble Crushing 4112Secondary Grinding 4113Slurry Feed Preparation & Storage 4115Classification 4116Flash Flotation 4117Grinding Facilities & Storage 4119Separation/Concentrating 412Neutralization 4122Flotation 4123Regrinding 4124Thickening & Filtration 4125Product Dewatering & Storage 4126Tailings Pumping 4127Tailings Thickening 4128Separation/Concentrating Facilities & Services 4129Cyanide Leaching 413Tank Leaching 4131Leaching Thickening 4132


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Description WBSColumn Leaching 4133Cyanide Destruction 4135Ponds 4136Carbon in Column 4137Carbon Pre-attrition/Regeneration System 4138Leaching Facilities & Services 4139Refining 416Desorption & Gold Room 4161Sulphide Precipitation – Copper 4163Melting & Casting 4164Base Metal Refining/SART 4165Electro-winning 4166Cyanide Storage & Handling 4167HCI & Caustics 4168Refining Facilities & Services 4169Lime & Reagents 417Lime Storage & Handling 4171Flocculent Systems 4172Collector Storage and Systems 4173Promoter Storage & Systems 4174Frother Storage & Handling 4175Copper Sulphate Storage & Handling 4176Hydrogen Peroxide Storage & Handling 4177Test Reagents Storage & Handling 4178Lime & Reagents Facilities & Services 4179Process Utilities 419Control System 4191Communication System 4192Plant Air 4193Instrument Air 4194Plant Water 4195Process Area Pipe Bridges 4198Process Utilities Facilities & Services 4199Tailings/Reclaim & Water Treatment Facilities 51Tailings Disposal 511Tailings Dam 5111Rougher Tails Dam 51111Cleaner Tails Dam 51112Tailings Diversion Channels 51113Tailings Pipelines 5112Tailings Distribution 5113Tailings Facilities & Services 5119Reclaim Water 512Reclaim Barge 5121Reclaim Pipelines 5122


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Description WBSReclaim Facilities & Services 5129Water Management for Thickened Tails 513Water Management for Thickened Tails 5131ARD Treatment 514Dams 5141Pumping & Pipelines 5142Seepage Control 5143ARD Treatment Facilities & Services 5149Effluent Treatment 515Effluent Treatment 5151Backfill Plant 516Backfill Plant 5161On-Site Infrastructure 61Site Preparation 611Diversions 6111Demolition 6112Fencing 6113Yard and Exterior Lighting 6114Bulk Earthworks 6115Site Common Facilities & Services 6119On-Site Roads 612River Crossings 6121Parking 6122Taxi Rank and Bus Terminal 6123Drainage 6124Helipad 6125Brake Test Ramp 6126Surfaced Roads 6127Gravel Roads 6128Earthwork and Terracing 6129On-Site Roads 6121On-Site Non-Process Facilities 613Permanent Accommodation 6131Security/Medical Facilities 6132General Offices 6133Assay Laboratory 6134Plant Warehouse/Shop 6135Main Mill Office Building 6136CIL Office Building 6137Main Administration Building 6138On-Site Mobile Equipment 614Mobile Maintenance Equipment 6141Mobile General & Administration Equipment 6142On-Site Bulk Storage 615Water 6151


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Description WBSPotable Water Bulk Storage 61511Gland Water Bulk Storage 61512Fire Water Bulk Storage 61513Fuel 6152Propane 6153Bulk Storage Facilities & Storage 6159On-Site Services/Utilities 616On-Site Fresh Water 6161On-Site Potable Water 6162On-Site Process Water 6163On-Site Fire Water 6164On-Site Environmental Monitoring 6165On-Site Effluent 6166On-Site Other Utilities (compressed air, propane) 6167On-Site Security Systems 6168On-Site Services/Utilities Facilities & Services 6169On-Site Communications 617Distributed Control System 6171Communications & Networks 6172On-Site Communications Facilities & Services 6179On-Site Lime Quarry & Production Facilities 618Quarry 6181Crushing 6182Conveying 6183Screening 6184Storage 6185Milling 6186Lime Plant 6187On-Site Lime Quarry Facilities & Services 6189On-Site Power Supply & Transmission 619Switchyard 6191On Site Transmission – Power Distribution 6192On-Site Overhead Transmission Lines 61921On-Site Underground Distribution 61922Mine Substation 62923Main Substation 6193On Site Power Generation 6194Power Generation - Mine 61941Power Generation – Plant Site 61942Power Generation – Camp Area 61943Power Generation – Hydro Power 61944On Site Power Supply Facilities & Services 6199Off-Site Infrastructure 71Off-Site Roads/Water Diversions 711Off-Site Roads 7111


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Description WBSCH33 Upgrade 71111Access Road Mine to Camp 71112Off-Site Facilities 712Off-Site Permanent Buildings 7121Off-Site Railways 7122Off-Site Accommodation 7123Off-Site Maintenance Mobile Equipment 713Off-Site Maintenance Mobile Equipment 7130Off-Site Bulk Storage 714Off-Site Water Pipelines & Bulk Storage 7141Off-Site Water Pumping Station 71411Off-Site Water Pipeline 71412Off-Site Water Pressure Monitoring Station 1 71413Off-Site Water Pressure Monitoring Station 2 71414Off-Site Water Pipeline Intermediate Pig Station 71415Off-Site Water Pipeline Terminal Station 71416Off-Site Well Field 71418Off-Site Fuel Pipelines & Bulk Storage 7142Off-Site Concentrate Pipelines & Bulk Storage 7143Concentrate Pumping Station 71431Off Site Concentrate Pipeline 71432Off Site Concentrate Pipeline Pressure Monitoring Sta. 71433Off Site Concentrate Pipeline Emergency Ponds 71434Off Site Concentrate Pipeline Valve Station 1 71435Off Site Concentrate Pipeline Valve Station 2 71436Off Site Concentrate Pipeline Valve/Choke Station 3 71437Off Site Concentrate Pipeline Terminal Choke Station 71438Off Site Concentrate Pipeline Valve Station 4 71439Port Facilities 715Port Site Development & Utilities 7151Port Concentrate Receiving 7152Concentrate Filtration Plant 71521Concentrate Effluent Treatment 71522Port Concentrate Storage & Handling 7153Port Coal Storage & Handling 7154Ship Loader 7155Port Berth 7156Port Marine Structure 7157Port Ancillary Facilities 7158Airport Facilities 716Airport Runways 7161Airport Taxiways 7162Airport Aprons 7163Airport Passenger Terminal Buildings 7164Airport Freight Handling Facilities 7165


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Description WBSAirport Facilities & Services 7169Off-Site Services/Utilities 717Off-Site Fresh Water 7171Off-Site Potable Water 7172Off-Site ARD 7173Off-Site Fire Water 7174Off-Site Environmental Monitoring 7175Off-Site Communications 7176Off-Site Effluent 7177Off-Site Other Utilities (Compressed air, Propane) 7179Off-Site Lime Quarry & Production Facilities 718Off-Site Lime Quarry & Production Facilities 7181Off-Site Power Supply & Transmission 719Off-Site Switchyard 7191Off-Site Transmission 7192Off-Site Transmission – Piedra Pómez 71921Off-Site Transmission – Port 71922Off-Site Transmission – Camp 71923Off-Site Transmission – Cerro Casale Mine Site 71924Main Substation 7193Power Supply Piedra Pómez 71931Power Supply Port 71932Power Supply Camp 71933Power Supply Cerro Casale Mine Site 71934Power Generation 7194Off Site Power Facilities & Services 7199Owner’s Cost 81Project Cost 811Project Management 8111Project Controls 8112Engineering & Procurement 8113Construction Management 8114Legal and Permitting 8115Public Relations 8116Commissioning 8117Community Engagement 8118General Administration 8119Spares & Inventory 8121Operational Spares 81211Critical Spares 81212Commissioning Spares 81213First Fills 8122Preproduction Operations 813Mine Training Cost 8131Studies 814


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Description WBSClosure & Rehabilitation 815Indirect Costs 91EPCM Cost 911EP Cost 9111CM Cost 9112Vendor Reps 9116Temporary Facilities 912Temporary Facilities 9120Temporary Services 913Temporary Services 9130Tools, Equipment, & Consumables 914Tools, Equipment & Consumables 9140Environmental, Sustainability, Safety, & Health Supplies 915Environmental, Sustainability, Safety & Health Supplies 9150Temporary Camp & Catering 916Temporary Camp Facilities 9161Temporary Camp Catering 9162Freight/Traffic & Logistics 917Freight / Traffic / Logistics 9170Commissioning 918Commissioning 9180PROVISIONS PPContingency PP1Contingency PP 11Escalation PP2Escalation PP 21Exchange Rate PP3Assessments PP4Distributions/Bulk Clearing PP5Suspense PP6Taxes PP7

23.5 Presentation of the Estimate23.5.1 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




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Table 23.5-1: Direct Costs (US$)

Labour Material Subcontract EquipAmount Total Amount

11 OPEN PIT MINE111 Open Pit Mine Development 38,956,644 95,136,140 21,775,296 155,868,080112 Open Pit Mining Equipment 558,006,089 16,803,431 574,809,520113 Open Pit Mine Infrastructure 19,666,909 44,272,207 150,700 13,996,841 78,086,65711 OPEN PIT MINE 58,623,554 697,414,436 16,954,131 35,772,137 808,764,258

31 ORE HANDLING311 Coarse Ore Crushing 17,724,271 33,428,786 837,289 3,017,505 55,007,851312 Ore Conveying 3,580,331 11,833,036 950,402 16,363,769313 Coarse Ore Stockpiling 3,258,523 2,821,517 638,076 6,718,116314 Ore Reclaim 19,408,240 19,907,764 3,051,300 42,367,304315 Secondary Crushing 33,179,487 101,111,224 5,696,331 139,987,043316 Tertiary Crushing 58,330,819 168,634,052 12,038,338 239,003,209317 Heap Leach 22,519,910 36,974,251 62,563 20,880,127 80,436,85131 ORE HANDLING 158,001,581 374,710,630 899,852 46,272,079 579,884,142

41 PROCESSING PLANT411 Grinding / Milling / Classification 63,039,078 174,382,853 10,596,094 248,018,025412 Separation / Concentrating 60,756,092 118,744,907 10,981,782 190,482,781413 Cyanide Leaching 24,847,712 43,000,694 69,604 4,194,435 72,112,444416 Refining 22,117,804 28,754,212 4,458,196 55,330,212417 Lime & Reagents 5,525,214 13,435,855 833,060 19,794,129419 Process Utilities 1,378,221 8,809,049 175,177 10,362,44741 PROCESSING PLANT 177,664,120 387,127,570 69,604 31,238,744 596,100,038

51 TAILINGS / RECLAIM & WATER TREATMENT511 Tailings Disposal 18,783,360 29,812,839 3,018,822 11,576,781 63,191,802512 Reclaim Water 9,945,156 14,033,737 945,272 3,614,879 28,539,045514 ARD Treatment 1,269,301 3,439,541 5,806,546 779,820 11,295,20951 TAILINGS 29,997,817 47,286,117 9,770,641 15,971,480 103,026,055


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61 ON-SITE INFRASTRUCTURE611 Site Preparation 7,175,986 12,331,337 412,112 6,542,510 26,461,945613 On-Site Non-Process Facilities 4,760,279 21,669,116 27,975,308 2,050,257 56,454,961614 On-Site Mobile Equipment 6,924 11,615,590 1,037 11,623,551615 On-Site Bulk Storage 544,570 569,298 6,506 150,392 1,270,767616 On-Site Services / Utilities 23,960,171 23,975,061 2,982,074 6,537,500 57,454,804617 On-Site Communications 997,800 9,957,831 10,955,631619 On-Site Power Supply & Transmission 6,440,652 39,412,848 8,947,483 1,060,948 55,861,93261 ON-SITE INFRASTRUCTURE 42,888,582 110,571,050 50,281,314 16,342,645 220,083,591

71 OFF-SITE INFRASTRUCTURE711 Off-Site Roads / Water Diversions 6,774,749 1,425,519 11,254,711 7,050,259 26,505,237712 Off-Site Facilities 818,463 1,712,842 103,352 2,634,658714 Off-Site Pipelines & Bulk Storage 80,730,447 91,822,827 69,926.409 28,601,594 271,081,278715 Port Facilities 13,693,795 29,926,985 52,519 4,771,437 48,444,736716 Airport Facilities 444,850 361,536 1,068,661 1,875,047717 Off-Site Services / Utilities 28,281,735 10,128,377 9,152,645 47,562,757719 Off-Site Power Supply & Transmission 2,193,454 17,633,583 111,542,759 170,598 131,540,39571 OFF-SITE INFRASTRUCTURE 132,937,493 153,011,670 192,776,398 50,918,546 529,644,107

Total Direct Cost 600,113,147 1,770,121,473 270,751,940 196,515,631 2,837,502,191


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Table 23.5-2: Indirect Costs (US$)


81 OWNER'S COSTS811 Project Costs 274,047,109 274,047,109812 Spares and Inventory 21,735,641 13,528,130 35,263,771813 Pre-Production Operations 10,475,652 10,475,65281 OWNER'S COSTS 21,735,641 298,050,891 319,786,532

91 INDIRECT COSTS911 EPCM 284,538,532 25,562,883 310,101,415912 Temporary Facilities 10,582,005 16,567,529 6,341,924 33,491,458913 Temporary Services 2,031,744 451,400 55,763,638 58,246,782915 Environmental, Safety, and Health 6,855,600 9,109,959 1,222,500 17,188,059916 Temporary Camp and Catering 11,162,299 23,359,930 1,140,000 1,409,521 37,071,750917 Freight / Traffic & Logistics 127,870,349 127,870,349918 Commissioning 15,223,320 15,223,32091 INDIRECT COSTS 330,393,500 49,488,818 211,559,370 7,751,444 599,193,133

PP PROVISIONSPP1 Contingency 428,000,000 428,000,000PP PROVISIONS 428,000,000 428,000,000

TOTAL INDIRECT COST 330,393,500 71,224,459 937,610,261 7,751,444 1,346,979,665




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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 2010 2011 2012 2013 2014 2015

0 Aviation - - - 249 99 21 Camp & Catering 3,498 3,593 17,432 24,816 7,755 742 Clinic 163 951 1,358 569 103 Community/Gov. Relations 1,772 4,361 5,856 5,250 1,228 54 Emergency Response 443 640 285 284 114 25 Environmental 2,790 1,541 834 557 277 56 Admin./Finance 2,027 1,965 780 736 427 77 Nantoco Office 3,129 4,251 5,409 6,113 2,905 528 Health & Safety 844 1,153 1,230 2,024 1,008 219 Human Resources 184 207 160 492 334 710 Insurance - 6,289 6,306 5,500 2,235 4011 IT - 915 1,498 1,496 1,258 2712 Legal/Land/Permitting 6,931 8,027 1,847 1,287 526 713 General Services - 279 767 3,145 1,466 3614 Management 1,245 1,570 1,030 998 397 715 Security - 459 1,314 1,673 761 1316 Training & Recruiting 79 2,705 4,056 2,933 689 1417 Waste Management - 28 422 928 772 1318 Power - 1 33 58 368 2619 CM Project Team/Other 24,633 12,974 15,951 13,678 12,327 10,108

Subtotal 47,576 51,119 66,261 73,575 35,515 10,476Total 284,523

23.5.4 Sustaining Capital

The sustaining capital is shown in Table 23.5-4.

Table 23.5-4: Sustaining CapitalLabour Material Subcontract Equipment Total

2014 - Year 0

Plant 2,898,606 10,455,990 5,885,711 19,240,3072014 - Year 0 2,898,606 10,455,990 5,885,711 19,240,307

2015 - Year 1

Infrastructure 7,500,000 7,500,000Mine 2,054,716 3,335,646 23,116 463,503 5,876,980Plant 5,649,256 10,961,390 11,357,635 6,262,717 34,230,9982015 - Year 1 7,703,972 21,797,035 11,380,751 6,726,220 47,607,978

2016 - Year 2Infrastructure 27,994 8,614,800 6,006 8,648,800


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Labour Material Subcontract Equipment TotalMine 8,337,782 3,801,445 12,139,227Plant 3,316,499 5,013,609 9,085,468 3,048,918 20,464,4932016 - Year 2 3,344,493 21,966,191 12,886,913 3,054,927 41,252,520

2017 - Year 3Mine 8,337,782 1,492,890 9,830,674Plant 288,409 2.022.272 3,512,540 809.833 6,633,0542017 - Year 3 288,409 10,360,054 5,005,430 809.833 16,463,728

2018 - Year 4Infrastructure 27,994 3,206,326 6,006 3,240,326Mine 1,440,546 1,440,546Plant 32,634 46.228 3,502,886 172,725 3,754,4732018 - Year 4 60,628 4,693,099 3,502,886 178,731 8,435,344

2019 - Year 5Infrastructure 685.149 685.149Mine 5,093,000 274,445 5,367,445Plant 3,986,695 5,739,831 3,320,000 3,020,778 16,067,3042019 - Year 5 3,986,695 11,517,981 3,594,445 3,020,778 22,119,898

2020 - Year 6Infrastructure 370.000 370.000Mine 24,153,411 2,720,389 26,873,800Plant 281,024 311.899 3,676,108 181,241 4,450,2722020 - Year 6 281,024 24,835,310 6,396,497 181,241 31,694,073

2021 - Year 7Mine 37,622,662 2,755,922 40,378,585Plant 2,541 1.270 6.865 20,432 31,1082021 - Year 7 2,541 37,623,932 2,762,787 20,432 40,409,693

2022 - Year 8Infrastructure 325.000 325.000Mine 18,601,014 2,270,822 20,871,836Plant 388,094 2.563.990 241.648 1,152,095 4,345,8272022 - Year 8 388,094 21,490,004 2,512,470 1,152,095 25,542,663

2023 - Year 9Infrastructure 1.997.848 1.997.848Mine 14,052,444 845,633 14,898,079Plant 5,803,328 7,705,947 12,357 4,328,731 17,850,3632023 - Year 9 5,803,328 23,756,239 857,990 4,328,731 34,746,290

2024 - Year 10Mine 16,095,829 4,979,664 21,075,494Plant 20.326 175.000 3.104 198.4302024 - Year 10 20.326 16,270,829 4,979,664 3.104 21,273,924

2025 - Year 11Infrastructure 1.505.942 1.505.942


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Labour Material Subcontract Equipment TotalMine 1,749,417 760,471 2,509,888Plant 381,934 2.628.490 75.515 1,091,683 4,177,6212025 - Year 11 381,934 5,883,848 835,986 1,091,683 8,193,451

2026 - Year 12Mine 924,105 384,000 1,308,1112026 - Year 12 924,105 384,000 1,308,111

2027 - Year 13Mine 428,210 2.141.000 2,569,210Plant 8,150,032 4,311,469 1,791,784 14,253,2852027 - Year 13 8,150,032 4,739,679 2.141.000 1,791,784 16,822,495

2028 - Year 14Mine 16,298,330 2,147,903 18,446,233Plant 192,033 1.312.280 131.808 572,721 2,208,8422028 - Year 14 192,033 17,610,610 2,279,711 572,721 20,655,075

2029 - Year 15Mine 607.000 607.000Plant 6,032,568 3,538,787 1,325,990 10,897,3452029 - Year 15 6,032,568 3,538,787 607.000 1,325,990 11,504,345

2030 - Year 16Mine 347.000 347.0002030 - Year 16 0 0 347.000 0 347.000

2032 - Year 18Plant 1,486,836 299,988 1,786,8242032 - Year 18 1,486,836 299,988 1,786,824

TOTAL 41,021,518 237,463,692 60,474,530 30,443,978 369,403,718

23.5.5 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.


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Table 23.5-5: @Risk Contingency Calculation SummaryReference Information @R i sk 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 4.99% 60% Perc = 3,764,021,248 346,329,748 10.13%

15% Perc = 3,615,854,080 198,162,580 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 = 3,656,746,240 239,054,740 6.99% 75% Perc = 3,814,959,104 397,267,604 11.62%

30% Perc = 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 RiskIn 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.

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