PERTH (miningweekly.com) – A feasibility study (FS) into the Jervois copper project, in the Northern Territory, has increased the project’s mine life from the 8 years estimated in the prefeasibility study (PFS) to just under 12 years.
ASX-listed KGL Resources on Thursday also announced a 25% increase in the copper metal produced at Jervois, compared with the 2020 DFS, with annual production now estimated at 24 700 t/y of metal in concentrate with gold and silver credits.
The FS also estimated a pre-production capital cost of A$298-million for the Jervois project, which was up from the A$200-million estimated in the DFS, while the project’s post tax net present value is now estimated at A$241-million, compared with the pre-tax net present value of A$177-million previously estimated, and the internal rate of return has changed from 23.1% to 20.7%, pre-tax and post-tax respectively.
KGL said on Thursday that the increased costs to the Jervois project reflected the impacts of industry-wide costs inflation and other challenges associated with bringing new projects online in the current environment.
However, the forecast long-term structural deficit in the copper market from 2025 driven by global decarbonisation targets for achieving net-zero emissions by 2050, supported the project coming online in the second half of this decade.
Project development is expected to take some two years, KGL told shareholders, followed by a commissioning and ramp-up period of six months.
KGL plans to start with openpit operations for approximately three years to commission and ramp up production. This will reduce up-front mining costs, simplify operations during commissioning and reduces pre-production capital expenditure, the company told shareholders.
Underground operations are progressively scheduled to start ore production to sustain a 1.6-million tonne a year process plant feed once open-cut operations cease. This mine development sequence results in higher grade underground resources being delayed until later in the mine life, but results in reduced project execution risk.
Before making a final investment decision, KGL will look at improving the project economics and will continue to grow the resource. A final investment decision is planned for early 2023, subject to market conditions.