Modern Mining: Featured News

Now listed on London’s AIM, Cradle Arc, the 60 % owner of the revived Mowana copper mine in Botswana, is ready to take the asset to a new level of operation via the installation of a DMS pre-concentration circuit that would more than double the present plant capacity of 1,2 Mt/a. Modern’s Mining’s Arthur Tassell recently spoke to the company’s CEO, Kevin van Wouw, and its COO, Mark Jones, to learn more about their plans for the mine.

Panoramic view of the Mowana open pit.

Commissioned in 2008 by African Copper, which was listed in Toronto and London, Mowana – located 120 km north-west of Francistown – was built at a cost of more than US$170 million in today’s terms but never really lived up to its potential. For a variety of reasons, much of the actual mining took place not at the Mowana site but at the Thakadu sulphide deposit, a full 70 km away by road, and plant throughput consistently fell short of nameplate capacity. When Thakadu was exhausted, mining moved back to Mowana for a few months but a falling copper price plus a range of other problems led to African Copper’s subsidiary, Messina Copper (Botswana), being placed in provisional liquidation in late 2015 and the mine going into care and maintenance.

A majority shareholding in Mowana was subsequently purchased by Cradle Arc Investments (CAI), a subsidiary of Penmin, a company founded by van Wouw. The intention was for CAI to be reverse listed into AIM-listed Alecto Minerals, which at that stage was mainly focused on the Matala and Dunrobin gold deposits in Zambia. Alecto had been working closely with Penmin on the Zambian assets and a good relationship had been developed between the two companies.

The deal was announced in late 2016 and, in terms of AIM rules, trading in Alecto’s shares was suspended in December 2016 pending publication of an Admission Document. Says van Wouw: “This whole process took much longer than we had been advised and the delay led to Alecto being delisted in July 2017. I’m happy to say that these problems are all now behind us and that we were re-admitted to AIM in January this year under our new name of Cradle Arc. The company now holds 60 % of Mowana, with the balance in the hands of Zambia Copper Investments (ZCI), which has had an interest in Mowana since 2009 and is supportive of our efforts to redevelop the mine.”

Jones – whose COO role entails him spending much of his time at Mowana – says that while the problems experienced with the AIM listing in 2017 undeniably delayed progress at Mowana much was also achieved over the course of the year. “The plant was refurbished and recommissioned in March 2017, initially processing oxide stockpiles and re-establishing Mowana as a copper producer. The recoveries were low because of the nature of the material but there were no mining costs. Mining recommenced in September, starting with pre-stripping, and ore was intersected, as expected, in early November last year. In December we restarted blasting activities.”

Improvements already made in the plant include new automation and controls to improve efficiencies and the use of a reagent (H88L) which is improving recoveries of transitional ores.

The interesting question is why Cradle Arc believes it can succeed with Mowana where its predecessors failed. “We’ve identified a number of factors that we believe contributed to the mine being placed on care and maintenance, including a poor geological and mining model, lack of management oversight and inefficient control of processing,” van Wouw responds. “We’ll be bringing an entirely fresh approach and, moreover, will be operating in a much more favourable copper price environment. We also intend upscaling the operation via the installation of a low capex DMS pre-concentration circuit which would increase throughput to approximately 2,6 Mt/a with very much reduced cash costs.”

Cradle Arc has just completed a maiden JORC (2012) compliant resource for Mowana (based on the existing resource models and prepared by Wardell Armstrong International). It estimates a measured and indicated resource of 40 Mt at 1,17 % Cu for 466 000 tonnes of contained copper and an inferred resource of 35 Mt at 1,12 % Cu for 395 000 tonnes of contained copper. The company is following up with a JORC (2102) compliant reserve estimate and this will be published in Q2 2018.

Van Wouw notes that while the Mowana plant was designed to handle oxide, intermediate and sulphide ores, in practice recoveries on oxide ore were always poor –  around 30 % compared to the 60 % predicted. “Our business plan is to treat the oxide material – much of which has already been ‘stripped out’ of the orebody – as waste,” he says. “We’ll stockpile it and come back to it later. We know the supergene and sulphide ores recover perfectly in the float and this is what we’ll be concentrating on.”

Van Wouw’s belief in the value of upgrading the front-end of the Mowana plant by putting in a DMS module dates back to his first encounter with the mine in 2007, when it was in the final stages of construction.

“I had just left LionOre which operated the Tati Nickel mine near Francistown to form my own consultancy and was asked to undertake a feasibility study on the viability of installing a DMS at Mowana– which is something we had done at Tati with great success,” he explains. “The study – which was carried out in conjunction with SENET, who designed and built the Mowana plant – produced very positive results and its conclusions were accepted by the mine’s owners. But they were never able to implement the DMS project because the funds simply weren’t available.”

Further confirmation of the viability of the DMS option has come from recent testwork undertaken by SGS Africa that has demonstrated that DMS pre-concentration can be deployed successfully at Mowana on all low oxide ores (defined as those containing less than 25 % acid soluble copper). According to the testwork, a mass yield of 30-40 % and a copper recovery of more than 85 % can be achieved. In addition, mill feed grades in excess of 2 % can be expected, nearly double the current ROM grade.

Following the positive resource update and the metallurgical test results, Cradle Arc has prepared an Accelerated Development Plan (ADP) which is now in the process of being implemented. This will fast-track access to the deeper sulphide and supergene ores and allow Mowana to reach steady-state production and positive cash flows more rapidly. The goal is to reach the full 1,2 Mt/a capacity of the processing plant which will result in a yearly production of approximately 12 000 tonnes of copper in concentrate.

Van Wouw notes that the financial resources to implement the ADP are in in place, Cradle Arc having raised £5,5 million in pre-IPO and IPO equity raisings and, more recently, securing a US$10 million debt facility.

The ADP will see four mining units in service in the Mowana open pit, with each mining unit consisting of a 75-tonne excavator and five 40-tonne articulated dump trucks (ADTs). The mining units will be able to operate independently of each other and will enable Crade Arc to mine multiple faces simultaneously. The expected increase in ROM tonnage will permit improved blending and will also allow Cradle Arc to build stockpiles of ore ahead of the planned implementation of the DMS upgrade.

The exact timing of the DMS expansion is still uncertain but Cradle Arc should complete all preparatory work shortly, opening the way to an investment decision. Should the go-ahead be given, a build time of roughly six months is expected. Under a best-case scenario, this could mean that the DMS could be commissioned either late this year or early in 2019. The exact cost of the expansion has yet to be determined but is unlikely to exceed US$20 million.

To facilitate the ADP, Cradle Arc has greatly expanded its mining fleet, with the arrival on site of 20 ADTs (all of 40-tonne capacity), three Cat D8 dozers, two Cat 374 excavators and ancillary equipment. Most of the machines have been sourced from the New Luika mine in Tanzania, where the contract mining operation has now ended as the mine has transitioned into being a mainly underground operation. The fleet was owned by Digmin – which was responsible for the open-pit mining at New Luika through its subsidiary, Bamboo Rock Construction – but has now been purchased by Cradle Arc.

“We’ve had a long association with Digmin and its founder, Gerald Chapman, and they are acting as our mining partner at Mowana,” says Jones. “Cradle Arc will undertake the mining directly but with Digmin managing the operation and the maintenance of the fleet.”

Also partnering with Cradle Arc at Mowana is Penmin, the company founded by van Wouw (although he no longer has an executive role with it). Penmin has a range of mining skills but, in respect of Mowana, it will mainly be contributing its expertise in metallurgy and in the design, construction and operation of process plants.

It should be mentioned that Cradle Arc also has the rights to the Makala deposit (part of the Thakadu mineralisation) which has a higher grade (1,8 % Cu) than Mowana and also silver credits and which lends itself to being exploited by underground mining methods. Cradle Arc intends launching a study on the project later this year.

Summing up the prospects for Mowana, van Wouw says the mine is an excellent asset. “We’re in no doubt that we can make it work. The current base case NPV for the mine is USS$87 million but this increases to US$245 million if we implement the DMS upgrade, which would lift annual copper production to plus 20 000 tonnes. Certainly Mowana has its challenges but we’ve put together a highly experienced team to run it and we have a clear strategy in place to turn it into a profitable, long-life operation. We’re confident that we will make real progress in the coming year and that Mowana will finally start to realise its considerable potential.”

Contact Modern Mining

Title: Editor
Name: Arthur Tassell
Email: mining@crown.co.za
Phone: +27 11 622-4770
Fax: +27 11 615-6108

Title: Advertising Manager
Name: Bennie Venter
Email: benniev@crown.co.za
Phone: +27 11 622-4770
Fax: +27 11 615-6108

BANNER 9

 
Full Name*
Invalid Input

Company Name*
Invalid Input

Your Email*
Invalid Input

Phone*
Invalid Input

Postal Address 1*
Invalid Input

Postal Address 2*
Invalid Input

Postal Code*
Invalid Input

Street Address 1
Invalid Input

Street Address 2
Invalid Input

Postal Code
Invalid Input

Town / City*
Invalid Input

Country*
Invalid Input

Magazine

Invalid Input

Invalid Input