PERTH (miningweekly.com) – The prefeasibility study (PFS) on ASX-listed Blackthorn Resources’ Kitumba copper project, in Zambia, has flagged a $358-million development cost.
An underground operation has been chosen as the preferred base case, as it offered a lower capital cost and higher capital efficiency, the miner said on Tuesday.
Under the PFS, the project would deliver an annual run-of-mine production of some three-million tonnes to deliver 39 000 t of copper. Kitumba would have a mine life of some 11 years, delivering 572 000 t of contained copper over the life of the project, at an average cash cost of $2.04/lb.
At a copper price of $3.50/lb, the Kitumba project would have an internal rate of return of 12.7% and a net present value of $108-million.
MD Scott Lowe pointed out that work has already started on optimisation studies focusing primarily on metallurgical recovery and mining sequence, which had the potential to further enhance economics.
“The completion of the PFS for Kitumba, along with identification of optimisation and value enhancement potential is a very important milestone for the company and the latest in a series of positive developments since BHP Billiton exited the joint venture just two years ago.”
Lowe noted that Blackthorn had chosen a smaller-scale underground operation, rather than a large openpit mine, to allow the company to target the higher-grade zone much earlier, and to avoid expensive and time-consuming pre-strip.
“The economic comparison clearly showed that the internal rate of return is better for the underground scenario, with a significantly lower preproduction capital cost.”
He added that the timing of the PFS was also important for the preparation of a mining licence.
“Our immediate priorities are to work through the optimisation exercise while examining a range of strategic alternatives for the project to map out the path to production that was in the best interest of shareholders.”
A feasibility study was expected to start early in 2014.