‘Attractive’ copper project advances on back of $50m loan

The first shipment of the red metal to markets is expected in 2019

OUTPUT OUTLOOK The first shipment of the red metal to markets is expected in 2019

Photo by Bloomberg

26th May 2017

By: Simone Liedtke

Creamer Media Social Media Editor & Senior Writer


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Copper miner Cupric Canyon Capital has secured $50-million to develop its Khoemacau underground mine, in north-west Botswana, and bring the copper- silver project into production.

The underground mine is planned for its high-grade Zone 5 deposit, which contains 100-million tonnes of ore, grading 2% copper and 20 g/t silver.

Besides project development costs, the proceeds from the loan will also be used for front-end engineering in advance of starting full-scale construction at the site, planned for the second half of the year.

The loan facility agreement announced in February was signed by Cupric’s subsidiary Khoemacau Copper Mining (KCM) and mine finance company Red Kite Mine Finance.

Located in the Kalahari Copperbelt, the $350-million mine is expected to produce 50 000 t of copper and 1.4-million ounces of silver a year over its 25-year life span; however, future expansions could increase yearly copper output to about 120 000 t.

The first shipment of the red metal to markets is expected in 2019, with average C1 cash cost estimated at $1/lb.

“This project has the full support of the government of Botswana and the size and quality of the mineral resource makes Khoemacau one of the most attractive new copper projects in the world today,” says Cupric CFO Rodney Prokop.

The Zone 5 mine will initially feed the nearby Boseto copper concentrator, which was acquired as part of Cupric’s acquisition of copper exploration and production company Discovery Copper Botswana, and will be accessed with three declines using a highly mechanised, low-cost sublevel open stoping mining method.

The Boseto concentrator will be upgraded from its current three-million-tonne-a-year nameplate capacity to 3.6-million tonnes a year. As of February, the Botswana Environmental Ministry was expected to approve modifications to KCM’s environmental permits to facilitate processing Zone 5 ore at the upgraded Boseto plant within the next few months.

The Botswana Power Company is also progressing development of the high- tension power line that will provide commercial power to the north-west region of Botswana. This power line project includes a spur line to Boseto and Zone 5, providing low-cost commercial power when KCM starts production.

Exploration Game

During the 2015 and 2016 exploration programmes at Khoemacau, drilling continued to produce encouraging results, with 36 holes, totalling 14 240 m, completed at Zeta NE and the newly discovered Zone 5 North deposits.

Following recent success, further drilling was proposed to test continuity of mineralisation and confirm copper-silver grade. The exploration drilling programmes exceeded expectation, intersecting continuous high-grade copper and silver mineralisation over wide intersections.

Deep drilling at Zeta NE included eight diamond core holes totalling 5 562 m.

Drilling focused on confirming high-grade mineralisation at depth and expanding and upgrading the mineral resources estimate. These results have confirmed high-grade copper and silver mineralisation over thick intervals to a depth of 900 m below surface. The Zeta NE deposit remains open at depth and along strike.

Discovery of the Zone 5 North deposit in late 2015 continued to return outstanding drilling results in 2016. Eighteen diamond core (DC) holes totalling 7 085 m and ten reverse circulation (RC) holes totalling 1 594 m intersected mineralisation over a strike length of 5 km and to a depth of 700 m below surface.

The drilling was able to provide high-grade copper and silver results as well as prove high-grade mineral continuity along strike and at depth. The Zone 5 North deposit is still open at depth and along strike.

Mineral Resources Estimates

These positive drill results, the company avers, led to two maiden mineral resource estimates at Zeta NE and Zone 5 North. The models were built using classification definitions by the Australasian Joint Ore Reserves Committee Code and comply with the recommended guidelines of the code of 2012.

The estimates were prepared by independent consultant RungePincockMinarco (RPM) of Denver, Colorado, in the US. The drilling and assay result cutoff date for the Zone 5 North deposit was June 9, 2016.

The drilling and assay database cutoff date for the Zeta NE deposit was August 4, 2016, and was supported by 76 DC holes (14 358 m) and 110 shallow RC holes (4 527 m).

Eight of the DC holes (5 561 m) were drilled by Khoemacau. All other holes were drilled by predecessors on the property. The drill hole and assay database has been reviewed and audited by RPM.

Additional Drill Results

In the second half of 2016, four additional DC holes were drilled at depth at Zone 5 North, totalling 4 063 m of deep drilling and two additional DC holes were drilled deep at Zeta NE totalling 1 669 m.

These holes intersected mineralisation at depths below the current inferred mineral resource.
These drill results confirm continuous high-grade copper mineralisation to depths greater than 1 000 m below surface at both Zeta NE and Zone 5 North.

The results, the company adds, have the potential to increase both the tonnage and grade of mineral resource estimate at both Zeta NE and Zone 5 North.

Edited by Tracy Hancock
Creamer Media Contributing Editor




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