Arc Minerals* (ARCM LN) – Drill results indicate significant scale copper project at Kalaba, Zambia
4.7p, Mkt Cap £29m
(ARC Minerals currently owns 55% of Zamsort which holds 100% of the Kalaba copper/cobalt mine and associated mineral licenses)
- Arc Minerals report results from the first four Reverse Circulation ‘RC’ drill holes drilled at Kalaba in Zambia.
- The results show the project is significantly greater in scale than previously anticipated and with better copper equivalent grades than expected.
- They also show significantly higher cobalt grades over longer widths than was also anticipated with high copper and high cobalt grades combining to produce shorter but still impressive lengths of >2% and
- The first four RC holes assayed show significant scale potential for the Kalaba project with mineralisation open to the north, west and east.
To the south the stratigraphic unit (dolomite) that hosts the mineralisation daylights and crops out on surface including:
- 20m at 1.31% CuEq.
- 25m at 1.24% CuEq.
- 26m at 1.10% CuEq.
- The intersections are from surface and near-surface for open cast mining with assays expected shortly from the other 12 of the 19 holes so far drilled
- Drill holes are sited along a single line 200m east of the Kalaba open pit indicating a good strike length
- Looking at the drill sections in more detail indicates potential for selective mining of very high grade mineralisation with the option of leaving the lower grade sections for processing at a later date.
- Alternatively it may prove more profitable to mine and process the 50-90m mineralised section as a whole.
- The higher than expected cobalt grades are interesting and skew the Copper Equivalent grades higher partly due to the high cobalt content and also due to the relatively high price of cobalt.
- Copper equivalent grades are calculated at current metal prices and while we feel the current copper price is relatively conservative while we note that cobalt prices remain relatively high at $62,000/t.
- We note: cobalt prices have fallen from a peak of $95,250/t but are still higher than the year-low of $55,750/t though they remain significantly higher than the five-year average of $40,770/t eg from before the start of the battery-metals revolution.
- Scale: it is too difficult to hazard a proper estimate at the tonnage of the project without access to maps or cross-sections but if we assume the mineralised strike runs for 1200m long and guess that the mineralisation runs across a 200m width and is from surface to a depth of 30m then we could guess at a tonnage of around 15mt assuming a density of 2.5t/cubic meter. The drilling is 200m to the east of the Kalaba open pit, hence our 200m width assumption.
- It is possible that the ore zone may vary from around 50m deep to 80-90m of mineralisation
- Grades: the average grade also looks to be >0.9% copper equivalent to give around 135,000t of contained copper equivalent with the emphasis on the cobalt more than the copper.
- Mineralisation is open in all directions according to the statement indicating that there should be more mineralisation to come.
- Metallurgical test work on the nature of the mineralisation still needs to be done to determine recovery rates and the eventual potential value of the project. The mineralisation is hosted by a dolomitic unit as seen in some other Copperbelt mines. The dolomite varies in composition between Ca rich and Mg rich with the latter seen as low from an acid consumption perspective. While the dolomite consumes acid raising costs its effect can be reduced before processing to improve recoveries and lower costs.
- Process plant: Zamsort appeared to be more than half way through the construction of their process plant in August. We look forward to further news on its construction and potential commissioning later this year.
Conclusion: These are very encouraging results indicating a significantly larger cobalt / copper mine at Kalaba than previously envisaged. We look forward to being able to estimate a significantly larger tonnage of mineralised material from the next set of assay results in the short term.
*An SP Angel analyst has recently visited the Kalaba open pit mine, stockpiles, process plant and drilling operations. Our intrepid analyst and co-driver drove to site from Lusaka and back again.
*SP Angel acts as nomad and broker to Arc Minerals.