Exco Resources inks maiden JORC reserve of 28.1Mt at 0.83% copper and 0.24g/t gold at Cloncurry

Exco Resources (ASX: EXS) has established a maiden JORC reserve at its Cloncurry Copper Project (CCP) located in North West Queensland.

The open pit ore reserve estimate is 28.1 million tonnes at 0.83% copper & 0.24g/t gold.

There is 9.2 million tonnes in proven reserve and 18.9Mt in probable reserve. The reserve contains 233,000 tonnes of copper and 220,000 ounces of gold.

Resources within the CCP area stand at 55.7Mt at 0.85% copper & 0.22 g/t gold, of which 37.9Mt is classified as measured or indicated.

The delineation of the ore reserve represents a key milestone for assessing the development options for the CCP and is in line with Exco's expectations for the project.

The CCP comprises four key deposits, the E1 Camp, the Monakoff group of deposits, Mount Colin and the Great Australia Deposit.

With growing confidence in the resource and Exco's ability to establish a 3mtpa+ operation at Cloncurry, Xstrata (LON:XTA) will be keeping a close eye on the CCP as its Ernest Henry operation is located just 8km to the east.

Xstrata is reportedly looking at opportunities with juniors in the region to help bolster mill feed as the project transitioned to underground mining.

The proximity of the mineable resources at the CCP to Xstrata’s Ernest Henry operation could potentially present opportunities for the treatment of ore through that facility as an alternative to the development of a stand-alone concentrator operation by Exco. 

Exco could conceivably pursue a commercially acceptable ore supply arrangement with Xstrata, whilst continuing to progress the items that remain on the critical path for the stand alone concentrator option.

Exco remains proactively focused on the completion of the definitive feasibility study (DFS) for the CCP, and securing the necessary approvals for project development.

This maiden ore reserve resides only within the E1 Camp and Monakoff deposits. Work is ongoing at the Monakoff East deposit in particular with a view to adding further to the CCP reserve, whilst the company continues to proactively evaluate the potential for inclusion of the Mt Colin resource into the project.

The metal prices used in determination of the ore reserve estimate are gold at US$900/oz, copper at US$3.00/lb with an exchange rate of A$1.00 = US$0.80.

The metal prices, grades, recoveries and costs have been used to identify mineable blocks to be included in the ore reserve estimate.

Processing costs have been factored from pre-feasibility level assessments, and the financial viability of the project was therefore tested with a 20% increase in processing costs, and subsequent increase in economic cut-off grade.

Financial modelling with the resulting inventory shows the project to still be viable and AMC conclude that the potential changes in the processing costs would not be material to the ore reserve estimate.

The DFS currently in progress is based on a 3Mtpa operation with a concentrator facility located at the E1 Camp.

At this throughput the project will produce  about 25,000 tonnes of copper in concentrate per annum with substantial by-product credits from gold, magnetite, cobalt and potentially uranium.

Final metallurgical optimisation and detailed engineering design has begun.

The Environmental Impact Statement (EIS) for the project has been accepted and the  Environmental Management Plan (EMP) is in progress. Liaison continues with the relevant authorities in pursuit of the necessary project approvals for the CCP.

The company is also evaluating the development strategy and funding options for the project.

In recent months Exco has also recommenced a targeted exploration program.
 
Exco is undertaking further geological and structural modeling with a view to maximising additional resource potential and identifying the potential for further conversion of resources to the indicated and measured categories.

Numerous targets have been drilled and results reported, whilst others have been prioritised for future drilling.