Modern Mining

ASX-listed Nzuri Copper has completed an updated Feasibility Study (FS) for the proposed Stage 1 development of its flagship 85 %-owned Kalongwe copper-cobalt project located in the Kolwezi region of the DRC.

The updated Stage 1 FS was based on revised pricing (reflecting continued increases in the cobalt price) and point-of-delivery (Kolwezi as opposed to Lubumbashi). It also includes an updated ore reserve estimate for Kalongwe of 7,99 Mt at 2,94 per cent Cu and 0,34 percent Co for 234 868 tonnes of contained copper and 27 102 tonnes of contained cobalt. This represents an 11 per cent increase in contained copper and an 8 per cent increase in contained cobalt compared with the maiden ore reserve published in October 2017.

The future open-pit area at Kalongwe (photo: Nzuri).

The project scope and capital requirements for Stage 1 remain unchanged and comprise an open-pit mine and an on-site 1 Mt/a DMS processing plant to produce two high-quality dry saleable concentrate products suitable as a feedstock for off-site SX-EW processing.

Estimated annual concentrate production would be 117 kt of DMS product with an average grade of 15 % Cu and 1 % Co and 20,5 kt of spiral product averaging 5,2 % Cu and 0,9 % Co. This is equivalent to an annual average metal production of 18 657 tonnes of Cu and 1 370 tonnes of Co.

The estimated capex to bring Stage 1 into production is US$53,12 million with payback expected in 17 months.

A Preliminary Economic Analysis of SX-EW processing has also been completed which highlights further potential increases to the returns and mine life from higher copper-cobalt output and revenue.

One option has been selected for further evaluation as a potential Stage 2 to the DMS construction, comprising a full SX-EW plant and cobalt circuit to process DMS-generated rejects and cobalt-only ore. This Stage 2 expansion option, which can be funded from cash-flows from the Stage 1 DMS, will be incorporated into the recently commenced front-end engineering design (FEED) programme for Stage 1.

Comments Nzuri Copper’s CEO and Executive Director, Mark Arnesen: “The Kalongwe copper-cobalt project continues to go from strength to strength. The updated Stage 1 Feasibility Study has delivered an impressive pre-tax NPV of US$186 million, a 99 per cent IRR and an increased ore reserve which now underpins an eight-year mine life. This incorporates updated, though still conservative, cobalt pricing assumptions. It is also based on an enhanced point-of-delivery at Kolwezi based on advanced discussions with potential off-takers completed since the 2017 Feasibility Study.

“In conjunction with these outstanding results, the recently completed Stage 2 Preliminary Economic Analysis has captured the value potential of a larger SX-EW development. This has confirmed our view that there is huge upside in the project which can be unlocked through future staged expansions funded from Stage 1 cash-flows. The results provide a clear roadmap that will help guide the detailed front-end engineering and design of the project, which is about to commence.

“Our immediate focus over the next few months is to advance appropriate funding solutions and, with the support of our cornerstone shareholders, deliver Stage 1 as quickly as we can while keeping in mind the best way of pursuing SX-EW processing. At the same time, we are continuing to pursue aggressive exploration aimed at growing our resource inventory and mine life at numerous exciting near-mine and regional targets.”

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