Alecto Minerals PLC (LON:ALO) has awarded London-listed group Capital Drilling Limited (LON:CAPD) the contract for Drill and Blast at its Mowana copper project in Botswana.
Mark Jones, Alecto’s chief executive, said: "We are moving at speed towards delivering continuous production and first sales at Mowana meaning that the atmosphere on site is buoyant, particularly given that the first blast is anticipated in just a matter of days.
“It is significant that we have been able to sign up a company of Capital Drilling's profile to provide future Drill and Blast services, and with Giant already on site, our stockpile is increasing.”
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Jones said that a local contractor will carry out the first production blast by the end of this month while Capital mobilises its equipment.
Giant Transport, the mining contractor for the project for an initial period of six months, has started work with the conventional crushing and screening circuit operating for two weeks, stockpiling crushed ore.
Test production has also now commenced, producing saleable concentrate up to 28% copper (Cu), which will comprise part of the first tranche of product to be delivered to Fujax Minerals and Energy Limited under a five year copper offtake contract
This early test production will help the project’s value, Jones said, so the time for the shares to return from suspension on AIM has been pushed back until end May.
“Most importantly, we have switched the plant back on as part of a test phase and this has been a great success, producing saleable copper concentrate.
"Of course, there are still some hurdles to overcome before we can announce that we are in full scale production, but our project is being de-risked on a continuous basis.”
The Mowana acquisition was announced in December.
The deal will see Alecto acquire a 60% interest for about £6.7mln made up of £1mln cash and the rest in shares.
Alecto believes Mowana can be brought back into production for US$20mln, which will be met through offtake and vendor financing deals.
At a copper price of US$2.50 per lb, Alecto's internal estimate for the project's net present value is US$245mln.
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