KGL Resources Ltd (ASX:KGL) has bolstered the mineral resource estimate (MRE) at the Jervois Copper Project’s high-grade Reward deposit ahead of a feasibility study slated for mid-2022.
The MRE update takes the contained copper metal at Reward up 20% to 244,000 tonnes, while the grade remains consistent at 1.8% copper.
In addition, two new higher-grade shoots have been defined at the deposit, with the indicated mineral resource tonnage jumping 23%.
Considering this upgrade and future MRE updates at Jervois’ Bellbird and Rockface targets, KGL now plans to release its feasibility study for the copper play mid this year.
“An important result”
Speaking to the results at Reward, KGL managing director Simon Finnis said: “While we have experienced delays in the resource work after we were unable to drill in 2020 due to COVID-19, which has subsequently delayed the feasibility study, a 20% increase in the Reward mineral resource is an important result for KGL.
“This increase has been achieved by carefully planned resource growth drilling, largely within the known footprint of the Reward deposit.
“Two new higher-grade shoots have been defined (Main FW and Main HW), located within a previously modelled lower-grade gap between Main shoot and Deeps South shoots.
“Importantly, this newly defined mineralisation should be readily accessible for mining from the Reward decline and therefore make an important early contribution to production.
“Mineral resources for Bellbird and Rockface are currently being estimated, although this work is being hampered by slow assay lab turnaround times for the final set of Rockface drill holes.”
Reaping at Reward
Reward’s mineral resource now stands at 13.58 million tonnes of ore, grading 1.8% copper, 32.8 g/t silver and 0.31 g/t gold for 224,000 copper tonnes, 14.32 million silver ounces and 136,700 ounces of gold.
Independent consultants Mining Associates Pty Ltd completed the MRE update, incorporating results from drilling completed last year as well as historical assays.
When compared to the most recent previous estimate, released in 2020, the JORC-compliant Reward MRE delivers a 20% increase in contained copper metal, as well as a 23% increase in resource tonnes in the indicated category.
Although both gold and silver grades have dropped slightly, the newly minted mineral resource estimates show increases in both metal contents from 2020 to 2022.
Feasibility study update
Prior to the MRE update, KGL expected the Jervois feasibility study would be complete in quarter one of 2022.
However, industry-wide challenges — including COVID-19-related restrictions, which have impacted site activities — have led to a delay in completing some of the key milestones.
These include the Jervois mineral resource and ore reserve updates, subsequent finalisation of the optimised mine plan and, therefore, the completion of the feasibility study itself.
An update for the Bellbird resource should be completed in early 2022, but KGL has advised it will be a number of months before an upgrade for the Rockface target is complete.
Although it admits the delay to mid-2022 is disappointing, KGL believes the buffer will allow it to:
- Include recent Rockface results in the mineral resource update;
- Add to mineral resources, most likely at Reward and Rockface based on recent drilling;
- Further optimise the mine plan;
- Finalise offtake arrangements;
- Identify and define any cost pressures to refine capital and operating costs, and;
- Continue to explore optimal project financing options, including the potential for Government assistance (NAIF), and develop an appropriate funding strategy.
The company stated: “Despite the ongoing challenges, the project is emerging as a significant copper and silver project located in a first-world jurisdiction, where all approvals are now in place.
“Jervois will offer customers a long-term supply of copper concentrate, with gold and silver credits, from a secure and stable operating environment in comparison to similar mines operating in more difficult geopolitical jurisdictions.”
Finnis concluded: “The delay in completing the Jervois Feasibility Study would, in more normal circumstances, represent a significant risk for shareholders.
“The recent discovery record at Jervois increasingly indicates potential for a larger and potentially more robust asset coming to development in a demand environment driven by a global shift into vehicle electrification and renewable energy systems.
“Management and board are therefore hopeful in delivering a higher value asset for shareholders which we expect will attract significant interest from financiers.”