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Opportunities on the horizon for base metals – consultant

14th August 2015

By: Ilan Solomons

Creamer Media Staff Writer

  

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There has been a downturn in most base metal prices over the past five years, particularly copper, which is at its lowest level in six years, having traded at about $2.45/lb at the end of January this year.

Geological, mining and environmental consulting services company The MSA Group principal gold and base metals consultant Mike Robertson says the copper price is generally regarded as an indicator for the state of the global economy.

“This is because copper is a key component for infrastructural development projects, as it is used in many applications, including wiring for industrial structures and telecommunication lines.”

He highlights that slowing global growth and particularly the slowdown in China, with the country consuming more than 40% of the total base metals output, are having a negative impact on the copper price.

A global copper surplus is also contributing to the low copper price, he adds.

However, Robertson notes that new large base metals operations are being developed and expanded in Africa.

These include Canadian base metals producer First Quantum Minerals’ Sentinel mine and the expansions at its Kansanshi mine, in Zambia, as well as advanced projects such as Canadian mineral explorer Ivanhoe Mines’ Kamoa copper mine, in the Democratic Republic of Congo.

He also notes ASX-listed resources company Blackthorn Resources’ Kitumba copper mine, in Zambia, holds significant potential.

“The Central and Southern African regions are poised to play an increasingly important role in global copper production in the short to medium term,” Robertson asserts.

Botswana Copper Opportunity

Botswana-based copper miner Khoemacau Copper Mining (KCM), previously known as Hana Ghanzi Copper, a subsidiary of Cupric Canyon Capital, has been exploring and developing the Ghanzi-Chobe copper/silver project, commonly known as the Khoemacau project.

The project is located in the Kalahari copper belt, within the Ghantsi and Ngamiland districts of Botswana.

According to KCM, exploratory work on the project has been positive and its efforts continue in earnest, with the multiple exploratory studies meeting expectations. The company believes that there is significant resource potential for opencast and underground mines at the site.

A mining right application has been submitted to the relevant Botswana authorities.

The plan is to start the two-year construction activities next year, with the mine to start producing copper to fill an expected copper deficit in 2018.

Cupric Africa head of human resources Clare Calver told Mining Weekly in February that the company had a strong presence in Maun, Botswana, with about 60 personnel, mostly comprising local employees, including administration support staff, human resources managers and engineers, besides others, already on the ground, as exploration drilling on site continued.

The company’s current focus is on completing the drilling programme and additional work for the bankable feasibility study, which was completed in September 2014.

A 2010 National Instrument 43-101-compliant resource estimate for the project, undertaken by Vancouver-based copper hopeful Hana Mining, showed an indicated mineral resource – all from the Banana zone – of 585-million pounds of copper and 12-million ounces of silver from 19.7-million tons at a grade of 1.35% copper and 19.7 g/t silver.

The estimate also revealed inferred resources of 2.4-billion pounds of copper and 40.6-million ounces of silver from 91.2-million tons.

The project is expected to benefit from proposed rail projects, access to roads, and water and power infrastructure expansions, with the 600 MW expansion of government-owned Morupule power plant set to come on line by 2018.

Zone 5 Overview

KCM is completing drilling and feasibility work for the development of its “significant” high-grade copper/silver resource at the Khoemacau project’s Zone 5.

To date, more than 150 000 m of drilling has been completed in the Zone 5 licence area and, upon completion of the current phase of drilling in August 2015, the deposit is expected to contain a minimum of 80-million to 90-million tons of mineable sulphide copper ore at an average grade of more than 2% of copper equivalent.

KCM says the characteristics of the orebody are favourable for the development of an efficient and low-cost underground mine.

The site’s sedimentary rock-hosted stratiform copper deposit is similar to others in the Central African copperbelts. The ore occurs in a well- defined, consistent zone that dips about 60°, averages 10 m to 15 m in thickness and is bounded by highly competent rocks above and below.

Sulphide ore is encountered at about 70 m below the surface at its shallowest, and extends to at least 1 200 m below surface while remaining open at depth.

KCM has secured a mining licence and other necessary permits from the Botswana government and has identified the necessary water resources to support the development of Zone 5.

The company expects to complete feasibility work along with various production options later this year.

KCM is advancing the Zone 5 project towards start-up in 2018, and current study work suggests that a yearly average production rate of up to 80 000 t of copper and 1.8-million ounces of silver contained in concentrate might be achieved during the first ten years of mine life.

The company also notes that metallurgical testing indicates that concentrate grades will exceed 40% copper.

Edited by Leandi Kolver
Creamer Media Deputy Editor

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