PERTH (miningweekly.com) – ASX-listed KGL Resources would spend a further A$2.7-million on an additional work programme at its Jervois copper project, in the Northern Territory, despite positive results from a recently-completed prefeasibility study (PFS).
Based on a resource estimate of 25.3-million tonnes, containing 280 000 t of copper, 18-million ounces of silver, 120 000 t of lead/zinc and 113 000 oz of gold, the two-million-tonne-a-year project would have an initial mine life of seven years, producing about 21 000 t/y copper and one-million ounces a year of silver concentrate.
The PFS estimated that the project would require a capital investment of A$189-million, with cash costs estimated at $1.51/lb.
“Jervois has been confirmed as a viable mid-sized, multi-metal mine. However, the opportunities to add value to the project before proceeding to development are too substantial to ignore,” said KGL MD Simon Milroy.
“The opportunities at Jervois are demonstrated not only by the PFS to date, but also the continuing flow of exploration results that point to the potential for a larger and more valuable asset.”
The additional work programmes were expected to add between A$100-million and A$200-million of additional free cash flow over the life of the project. Milroy said that at the completion of the additional work programme, KGL expected improved economic parameters for the project.
KGL would now undertake further drilling to increase the resource and reserves in both openpit and underground areas, and would conduct metallurgical improvements to potentially increase the recoveries and reduce capital and operating costs.
“Our declared strategy for Jervois includes attracting an equity partner into the project. It is important, therefore, that the project be presented in the best possible way to attract such a partner to contribute to the project’s development,” Milroy said.