New Mining Study Commissioned, Mankayan Project
28 November 2018
Bezant Resources Plc
("Bezant" or the "Company")
New Mining Study Commissioned, Mankayan Project, Philippines
Bezant (AIM: BZT), the copper-gold exploration and development company, is pleased to announce that it has commissioned a new mining study to be conducted by Mining Plus Pty Limited ("Mining Plus") in order to examine mining options in relation to distinct high grade areas within the Mankayan copper-gold project, located on the Island of Luzon in the Philippines (the "Mankayan Project").
New Mining Study
Mining Plus, a mining technical services provider, has been appointed as an independent consultancy group to undertake a mining study on the Mankayan Project (the "Mining Study") based on their strong international reputation and prior experience with the project. The Board notes that Mining Plus' involvement in an historic study, alongside TWP Australia (Pty) Ltd ("TWP"), was limited in scope by the then specified mining method, production rate and other parameters.
Following analysis of higher grade areas and engineering concepts by the Company, the new study will look to examine the viability of new, scalable mining options for the Mankayan Project. One of the objectives of the study is to determine economically viable alternative mining processes, within the Lift 1 area of the historic Scoping Study, to traditional block caving. Block caving typically requires high levels of initial capital expenditure before first production commences.
The new Mining Study will comprise a high-level desktop review, which will not require additional drilling, and is expected to be completed during Q1 2019.
The Mining Study will consider the economics of various mining options, which may include:
· High-grade focussed block caving
· Alternative production rates
· Staged production rate ramp-ups
The existing block cave model, based on the historic studies completed in 2011 and 2014, includes various scenarios built around a two lift sequence including, at a run rate of 20 million tonnes per annum ("Mtpa"), a US$739m net present value ("NPV") with a 21 per cent. internal rate of return ("IRR"), production costs of US$17.31/t, mining capex of US$217m and infrastructure capex of US$796m. Following analysis of certain high-grade areas, including 'open' sections in the JORC (2004) resource, the single lift scenario offers the potential to move from a block cave system to a different mine plan with significantly reduced capital expenditure. It is anticipated than any new alternate mining scenario resulting from the new study would sit alongside the full 20 Mtpa block cave model, thereby allowing the Company distinct options to progress its Mankayan Project.
As the new Mining Study will include geological block model analysis, it will assist the Company in determining further target areas where higher grades of copper and gold may exist within the current JORC (2004) resource area defined by Snowden Mining Industry Pty Limited in 2009. The Board notes that this previously reported resource estimate excludes the results of hole BRC-60, a 1,491m diamond drill hole completed by Gold Fields Netherlands Services BV ("Gold Fields"), which were announced on 12 February 2014, which confirmed that the Mankayan deposit is open at depth and increased the previously known depth extent of the mineralisation on the eastern part of the deposit by over 200m.
Commenting today Laurence Read, CEO of Bezant, said:
"As CEO, I am pleased that we shall be progressing the Mankayan copper gold project following the results of extensive in-house geological and engineering work over the course of the last year.
"Our understanding of Mankayan has grown significantly and the potential for exploiting high grade resource areas needs to be independently examined. While the current, 20 Mtpa economic scenario for Mankayan is highly robust and comparable to a series of successful, currently operating, third party projects we believe that there may well be a viable alternate mining system that can be implemented within the Lift 1 area of the existing model.
"Mankayan is a significant potential source of long-term copper gold-supply and the results of the new Mining Study may allow Bezant to pursue new avenues for the project if production scenarios, with reduced upfront capital expenditure, can be determined.
"Mining Plus is a major, internationally recognised mining services provider who have successfully worked with a host of mining companies to deliver projects into first production and I look forward to working with them."
For further information, please contact:
Bezant Resources Plc
Chief Executive Officer
Tel: +44 (0)20 3289 9923
Strand Hanson Limited (Nomad)
James Harris / Matthew Chandler / James Dance
Tel: +44 (0)20 7409 3494
Novum Securities Limited (Broker)
Tel: +44 (0)20 7399 9400
or visit http://www.bezantresources.com
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.
Notes to Editors:
Mining Plus (www.mining-plus.com) in an international mining services provider specialising in geology, mining engineering, and geotechnical engineering, covering a broad range of mineral commodities and project types, enhanced by strategic alliances in other core disciplines. Mining Plus has advised on over 1,850 projects for 630 customers in 40 countries over a range of different commodities.
The Mankayan Project, Philippines
The Mankayan deposit is principally hosted by a 900m long by 400m wide north-south striking intrusive stock complex composed largely of quartz diorite porphyry. The igneous rocks have intruded a thick sequence of andesitic volcanics and a basement of biotitequartz schists and mafic flows. The size, grade and mineralogy of the Guinaoang deposit are typical of porphyry copper deposits.
From October 2011 to January 2014, the Mankayan Project was held under option by Gold Fields for a total exercise price of US$70m (of which US$9.5m was received by the Company by way of initial non-refundable option payments). The option ultimately lapsed, as Gold Fields began new operations in Australia, and all exploration data, including the results of the high-grade BR 60 drill hole completed by Gold Fields during the option period, was transferred to Bezant.
In 2011, TWP was commissioned by Bezant to undertake a Conceptual Study on the Mankayan Project comprising an undeveloped underground mine, for which a conceptual mining, extraction and processing method was to be determined. This study was conducted within +35% to -30% limits of accuracy. In 2014, GHD Group Pty. Limited ("GHD") and Mining Plus were commissioned to conduct a desktop review of TWP's report and update the capital and operating expenditure assumptions.
· Project's estimated return (US$3.00/lb, Cu and US$1,250/oz Au):
- post-tax NPV of approximately US$739 million at an 8% discount rate
- post-tax IRR of 21%
- post-tax net cashflow of approximately US$3.7 billion
· Total capital investment cost of approximately US$1 billion over the duration of the project at 20 Mt per annum and over a 28-year mine life
· US$17.31 costs per ore tonne, including all royalties, taxes, capital costs, equipment ownership, operating and processing costs and administrative and technical services costs
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