Development work on the Serrote copper/gold project, in Brazil, is continuing apace and the greenfield openpit mine project remains on track to reach production in the second half of next year.

Construction is continuing despite Brazil being the second worst-hit country by the Covid-19 pandemic.

Developer Mineração Vale Verde (MVV), which is owned by British investment adviser Appian Capital Advisory, reports that the necessary precautions are in place to ensure the health and safety of the 1 500 people working on site.

The Serrote project is progressing in line with the construction plan and last month marked a “major” milestone with the first blast, MVV reports in a statement.

Overall project execution is tracking at 60% complete. Procurement is approaching the final stages and 96% of key packages by value have been awarded.

“Serrote continues to demonstrate robust economics with potential upside, and we are seeing strong interest from offtake and financing partners, which underlines the progress that MVV and Appian have made in developing and derisking the project, along with the attractiveness of Serrote’s high-grade copper/gold concentrate,” comments MVV and Appian Brazil CEO Paulo Castellari.

MVV is in “advanced” discussions on a $160-million senior bank project financing facility, as well as other nondilutive funding options to fund the remaining construction capital expenditure. It expects to reach financial close in the second half of the year.

Other milestones that MVV is targeting for the year are the construction of the tailings storage facility spillway and conveyance system tunnel, and the completion of the concrete foundation for the grinding area and primary mill structure, energising the 230 kV power system.

The definitive feasibility study (DFS) for Serrote outlined a conventional, low strip openpit operation producing 20 000 t/y of copper-equivalent at second quartile costs over an estimated initial mine life of about 14 years.

The project economics outlined in the August 2019 DFS led to a positive construction decision, with Appian funding all of the equity required to bring the asset into production. The DFS estimates that $250-million in capital will be required.

MVV is pursuing expansion opportunities beyond the initial 14-year mine life, with significant defined mineralisation outside of the current mine plan, as well as numerous satellite resources and targets within trucking distance of the planned plant infrastructure.

It notes that less than 50% of the 112-million-ton global resource is currently contained within the mine plan, with active exploration and growth plans under way to increase mineable inventory.

MVV is stockpiling Serrote’s oxide resource for future processing as part of the prestripping activities. With 19-million tons of oxide resource at Serrote grading 0.5% copper and additional near-surface oxide material present at satellite deposits, the company is evaluating the processing of oxides through solvent extraction and electrowinning on-site to produce copper cathodes.

COVID SUPPORT
Meanwhile, Appian has announced a $600 000 support package to help combat the pandemic in the regions in which its portfolio companies operate, through its philanthropic vehicle, the Appian Way Charitable Foundation (AWCF).

To date, AWCF’s support includes procuring 6 000 Covid-19 rapid test kits, 12 000 N95 masks, 25 000 white surgical masks and 70 noncontact digital infrared forehead thermometers for use in Alagoas where Serrote is situated, and Bahia, the location of Appian’s Santa Rita nickel sulphide project.

AWCF has also distributed more than 40 t of materials packed into hygiene kits to community members, with all materials carefully sourced to support local businesses. In Bahia, AWCF also contributed to fund a health unit dedicated to treat Covid-19 patients.

“Environmental, social, and governance efforts continue to be fundamental to our business, and I am proud of our actions to help combat the Covid-19 pandemic in Brazil, to support and partner with the communities in which we operate,” says Castellari.