KGL Resources Ltd (ASX:KGL) recently extended the feasibility study (FS) of its Jervois Copper Mine Project in the Northern Territory to complete essential studies and carry out the optimisation phase.
The FS of the high-grade project is well advanced with the initial major costing packages including the mining, processing plant and logistics costs being received, and mine and infrastructure planning nearing completion.
KGL’s aim is to complete the financial results of the FS, produce a new mining reserve, finalise the project financing, take the final investment decision and begin project construction during the first (March) quarter of 2022.
Strong hits at Reward and Bellbird
Resource development drilling at Rewards and Bellbird deposits were recently completed.
Copper, silver and gold intersections are broadly in line with expectations and the results serve to increase confidence in sections of the resource model where the drill hole spacing was, previously, wider than optimal.
All holes in the Reward drilling program intersected reportable intervals of copper, silver and gold mineralisation.
Some of the highlights from the Reward program include:
- 19.71 metres (true thickness) at 2.54% copper, 68.1 g/t silver, 0.27 g/t gold from 76 metres downhole including 6.27 metres (true thickness) at 4.53% copper, 90.8 g/t silver, 0.42 g/t gold from 76 metres downhole; and
- 5.84 metres (true thickness) at 2.91% copper, 115.9 g/t silver, 2.30 g/t gold from 146.59 metres downhole KJCD438 including 9.88 metres (true thickness) at 2.25% copper, 31.9 g/t silver, 1.03 g/t gold from 481.94 metres downhole.
Jervois copper resource evolution.
“Outstanding potential of Jervois”
KGL managing director Simon Finnis said: “The recently received assays show the outstanding potential of the Jervois mineral field, with high-grade intersections confirming previous drilling results.
“These final results will now be processed by our independent consultants to update the Reward mineral resource model over the next few weeks.
“Bellbird assay results are expected to be finalised early next month and these will similarly be used to update the Bellbird resource model.
“It is very encouraging to note that all Jervois copper deposits remain open at depth and are prospective for additional resources and discovery by deeper drilling, either from surface or underground as the mine proceeds.
Rockface, Cox’s Find & Bellbird South drilling
Finnis added: “Currently work is proceeding with two universal drill rigs.
“At Rockface, one rig is drilling a series of eight deep resource definition holes comprising two parent and six daughter holes.
“One parent and one daughter hole have been completed and the drill-core is being processed at our on-site facility at Jervois.
“Our second rig will be drilling a series of exploration holes at the Cox’s Find and Bellbird South prospects, based on the interim IP and geophysical modelling.
IP and geophysical modelling
All exploration holes will be cased with PVC pipe in preparation for downhole electromagnetic (DHEM) logging, due to commence this month.
DHEM is a proven technique at Jervois, being instrumental in the discovery of the high-grade Rockface deposit.
A large MIMDAS IP (induced polarisation) survey is nearing completion with data analysis and modelling well underway.
This work has guided the current exploration holes and will be important in positioning further exploration holes planned to be drilled this calendar year.
Feasibility study update
The Jervois FS is progressing according to the revised timetable, with the current emphasis on optimisation of mine design and schedule.
Recent comprehensive and positive metallurgical test results have supported KGL’s efforts to modify the process flowsheet to improve copper recovery, concentrate grade and reduce capital and operating costs.
With silver and gold grades continuing to show economic benefits, the FS will incorporate further optimisation to deliver attractive by-product credits.
During the first quarter of 2022, KGL’s aim is to complete the financial results of the FS, produce a new Mining Reserve, finalise the project financing, take the final investment decision and begin project construction.
Early works will also commence in this period.
Jervois pre-feasibility study - Dec 2020
“Near-record copper prices”
KGL managing director Simon Finnis said: “This is a high-grade copper resource that continues to increase in both confidence and quality, and, with further drilling, still has significant upside potential.
“Jervois is being prepared for development at a time of near-record world copper prices that are forecast to remain strong for at least the life of the initial mine at Jervois.
Copper price chart
“The long term copper supply constraints being forecast as demand for copper strengthens significantly in an increasingly electric society are only intensified by the current stresses on production, most recently the labour disruptions in the world’s largest copper producing country, Chile.
“With supply under such pressure, we look forward to bringing Jervois into production in this extended period of sustained growing demand for copper.”
Well-funded
In February 2021, KGL successfully completed a strategic institutional placement, issuing 28,024,573 at $0.42, and raising $12 million before costs.
KGL had ~$25 million cash on hand at June 30 2021, which provides a pool of funds to finalise the DFS, undertake project financing, and test some of what KGL believes are exciting additional exploration targets in the area.