Phase 2 will involve the expansion of the phase-one concentrator and the construction of a new acid-leaching and solvent-extraction/electro winning plant for the production of copper and cobalt metal on site. This metallurgical complex is contingent on the successful completion of a feasibility study. This phase will also involve the mining of higher-grade copper ores from the Ruashi orebodies, with direct leaching of the ore, resulting in higher copper and cobalt recoveries and less dependence on cobalt. There is also potential for phase three, which will be mining high-grade sulphide ores underground. The mine has an estimated life of 22 years.
Value The capital costs of the first phase, at $31-million, is above the original forecast of $25-million. There are several reasons for the increase. Metorex CEO Charles Needham has stated that Ruashi had been overdesigned to include certain portions of Ruashi phase 2 and it had cost more to refurbish equipment than initially expected.
Initial estimates for phase 2 are put at between $120-million and $140-million; however, Needham has stated that this figure could rise to as much as $160-million if Metorex decides to include a cobalt metal circuit at a cost of about $25-million.
Duration Initial production started in June 2006. The mine is being ramped up, treating material from 56 dumps and tailings dams. Full production was expected in September 2006, but ramp-up has been slower than expected, a lack of water being the problem.
Breakdown of main contracts In phase one the stockpiles will be mined and milled. The ore will undergo a flotation process, resulting in the production of a copper/cobalt concentrate Client Metorex Limited. Latest developments It was thought that there would be a three-month build-up between July and September; however, the mine has not yet reached full production, owing to delays though by a seasonal lack of water in the area.
The mine has been drawing water from opencast pits, and Ruashi will commission a borehole in the following weeks to secure a steady and reliable water supply to the plant. Pipelines have been extended to access water deeper in the pits.
Further, Metorex has raised $25-million in bridging finance from Standard Bank to place orders for long-lead items and starting civil work for phase 2.
Participants Standard Bank is the lead finance arranger for the mine and the processing plant.
GRD Minproc were responsible for the engineering management. Steffen, Robertson & Kirsten (South Africa) has completed a competent-person report, which includes a review of the technical, legal and financial aspects of the projects.
Bowman Gilfillan has completed a legal due diligence on the project with regard to ownership of mineral title. SRK consulting completed the independent competent-person report.
Brait Corporate Finance was the transaction arranger and corporate adviser. Barnard Jacobs Mellet was the corporate adviser and sponsor. Deloitte & Touche chartered accountants (SA) was the independent reporting accountants.
Deloitte Corporate Finance division was the independent expert. Will any structural steel be used and, if so, how much? Not stated.
On budget and on time? The project is on track.
Contact details for project information Metorex Limited, tel: (011) 880 3155 or fax: (011) 880 3322.