Carbine agrees offtake deal for Mt Morgan output
PERTH (miningweekly.com) – Metals developer Carbine Resources has secured an A$8-million-a-year copper sulphate offtake contract for its Mt Morgan copper and gold project, in Queensland.
The company announced on Tuesday that it had executed a binding principal offtake agreement with chemical and mineral distributor Swancorp, following an extensive due diligence, off-site trial production, end-user testing and pricing negotiations.
Under the terms of the agreement, the two parties have agreed to a three-year exclusivity for mine-gate sales of up to 1 200 t/y of Mt Morgan copper sulphate, providing Carbine with a mechanism for near-term sales of production from water treatment operations.
The contract allowed for the potential extension of sales up to 5 000 t/y, by mutual agreement, while pricing was done at a fixed formula relative to the London Metal Exchange copper cathode price.
A 2014 prefeasibility study into the Mt Morgan project estimated a production rate of one-million tonnes a year over a mine life of eight years, to deliver production of 31 200 oz/y of gold, 3 200 t/y of copper sulphate and 211 000 t/y of pyrite concentrate.
The study estimated that the project would require a capital investment of A$63.3-million, while operating costs were estimated at A$29.20/oz and all-in sustaining costs (AISC) at $234/oz.
Carbine said on Tuesday that revenue from the offtake agreement could reach a projected A$8-million a year, which was anticipated to reduce the C1 cash costs for the operation by 27%, from $680/oz to $494/oz. Combining the expected earnings generated from copper sulphate and the pyrite offtake, the C1 cash costs for the operation would be reduced by 89%, to $75/oz.
The projected AISC would remain at $234/oz.
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