Approval has been granted by the board of mining company Antofagasta for the development of the Esperanza copper-gold project in Chile.
The mine will produce copper concentrate containing gold and silver by-product credits and will have a lifespan of 15 years, based on proven, probable and possible ore reserves.
The average gold grade of these reserves is 0.23 grams per tonne, while the copper grade is 0.55 per cent.
It is located next to the Telegrafo sulfide deposit, with will use the Esperanza plant and facilities when beyond the estimated 15 years mine life.
Capital costs for the development are estimated at $1.5 billion, and the first production is predicted for the end of 2010. It is expected to produce concentrate with 229,000 ounces of payable gold each year.
"We are very pleased to announce the development of the Esperanza project," said Antofagasta's chief executive, Marcelo Awad.
"This is an important step in the group's growth strategy Esperanza is a competitive and environmentally sound project."
The project is subject to environmental approval.