KGL Resources (ASX:KGL) has now delivered its highly anticipated Pre-Feasibility Study (PFS) for the wholly-owned Jervois Copper-Silver Project in the Northern Territory.
This follows on from the initial PFS, announced in December 2014, found Jervois to be technically and commercially feasible. Work since then has enhanced the project significantly.
The potential of the PFS is that this is a starting point, and as tonnes and grade is added to the Jervois resource, this will have a direct impact in lowering all in costs (C3), as the PFS includes all of the capex.
More tonnes and grade will add mine life, as already highlighted by the recent discovery at the Rockface prospect, with the results not included in the PFS at this stage.
Jervois has been ranked in the lowest quartile for costs and first quartile for grade of undeveloped copper projects in a global ranking, and has a low capital intensity when ranked against peers.
Key Project Metrics:
* The LoM schedule is derived from a mining inventory of which 62.5% is indicated resources and 37.5% is inferred resources.
** The commodity prices were based on the mean value of the long term (beyond 2020) forecast price of each metal from a number of international banks and investment firms as compiled by Concensus Economics Inc.
Simon Milroy, managing director, commented:
“Jervois is confirmed as a robust, mid-level scale mining project with an initial annual production of more than 20,000 tonnes of copper, one million ounces of silver, plus lead and zinc, with a mine life of more than 8 years.
“In 2015, we increased and upgraded the mineral resource, simplified the metallurgical processing and reduced the operating costs.
“The additional studies now show Jervois to be:
- A conventional copper flotation project with strong economics.
- With a C1 (cash) cost of US$0.88/lb and C3 (including depreciation, amortisation and royalty) cost of US$2.13/lb.
- Among the lowest cost of the world’s probable new mines.
“The PFS benefited from the upgrading of mineral resources and increases in silver, lead and zinc tonnages.
“With 12 kilometres of strike length, all current orebodies remain open, and the potential for substantial new discoveries is demonstrated by the recent intersection at the Rockface prospect in an area that is not included in the current mining inventory used in the PFS.
"The strongly mineralised 14 metre intersection is currently being assayed.”
Resource growth potential
Recent exploration successes at Rockface, Green Parrot and Bellbird East offer the potential for additional high grade, relatively shallow resources that could feed into the early part of the mine schedule and further enhance the Project’s economics.
The plan for Jervois
The Jervois Project will consist of open pit mining of several deposits followed by underground mining to feed a 2.2Mtpa flotation plant producing 80-100,000 tpa of copper concentrate plus a separate lead/zinc bulk concentrate.
Jervois is forecast to produce a total of 754,000 tonnes of copper concentrate at a grade of approximately 23% copper and 283 g/t silver over an initial life of 8.25 years*.
This equates to an annual average production of 21,000 tonnes of contained copper and 1 million ounces of contained silver.
Jervois will also produce approximately 179,000 tonnes of bulk concentrate at a grade of 43% lead, 17% zinc and 1,069 g/t silver over the LoM.
The PFS is based on an Indicated and Inferred resource of 30.5 million tonnes containing 327,000 tonnes of copper, 22.6 million ounces of silver, 143,000 tonnes of lead and 47,000 tonnes of zinc
Analysis
The PFS has confirmed Jervois as a robust, mid-level scale mining project with an annual production of more than 20,000t of copper, 1moz of silver, plus lead and zinc, with a mine life of more than 8 years.
More tonnes and grade will add mine life, as already highlighted by the recent discovery at the Rockface prospect.
Jervois has been ranked in the lowest quartile for costs and first quartile for grade of undeveloped copper projects in a global ranking.
It also has a low capital intensity when ranked against peers.
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