Alara Resources Ltd (ASX:AUQ) has achieved a significant milestone as it has received all eight government approvals for mining at its 70% owned Al Hadeetha Copper Project in Oman.
Oman's Public Authority for Mining is now in the process of issuing a mining licence.
The stage is now set for Alara to realise the value of Al Hadeetha’s Ore Reserve of 9.7 million tonnes grading 0.88% copper and 0.22 g/t gold.
Early site preparations for mining have commenced
While some licensing conditions may still be discussed, confirmation correspondence gives no indication that major delays are to be expected regarding the licence issue.
Alara is proceeding with ancillary work to set up a new core yard and storage facilities near the site.
Ready to issue EPC contract
Two engineering, procurement and construction (EPC) bidders have been shortlisted.
Alara is ready to issue the EPC contract as soon as a final agreement is reached.
Furthermore, Alara and its joint venture partner, Al Hadeetha Investments LLC, are also finalising financing terms based on letters of intent (LOIs) renewed last year.
Al Hadeetha Investments LLC is owned by the family of Sayyid Khalid Al Busaidi, a prominent business figure who is chairman of one of Oman’s largest business entities.
Initial 10-year open pit copper mine
The Al Hadeetha Copper Project is underpinned by construction of a 1 million tonnes per annum copper concentration plant over an initial 10-year mine life.
Notably, when the updated feasibility study was published in early 2017, the base case assumptions used a copper price of US$5,593 per tonne and gold price of US$1,200 per ounce.
Moves in the copper and gold prices over the last 18 months mean that copper and gold prices could potentially end up being higher than the high case.
LME cash copper prices are around US$6,870 per tonne with the December 2019 contract at US$7,030 per tonne.
Gold is trading around US$1,320 per ounce.
Copper revival in Oman
Al Hadeetha is set to become the next producer of copper concentrate in the Sultanate of Oman, with several other copper projects following closely.
The increased activity reflects the Sultanate’s economic diversification strategy, combined with higher copper prices supported by increased electrification and growing global supply deficits.
The region was one of the biggest producers and exporters of copper for centuries during the Islamic Period.
A growing project portfolio in Oman
Parallel to advancing the Al Hadeetha Copper-Gold Project toward production, Alara has been developing its Oman project portfolio.
During March 2018, Alara acquired a 10% interest in the Awtad Copper-Gold Project in Oman with the right to increase its interest to 70%.
Awtad is adjacent to the Daris Copper-Gold project for which Alara is advancing a mining licence application.
Furthermore, during March 2018, Alara entered into an agreement to form a new joint venture providing drilling and mineral exploration services in Oman.
The joint venture will engage in drilling, exploration, and mine development activities, and offer these services to other mining and exploration companies in the region.
Alara also owns the Khnaiguiyah Zinc-Copper Project in Saudi Arabia for which a feasibility study has been completed.
The company is working through a mining licence being reissued.