ASX-listed Havilah Resources on Tuesday published the prefeasibility study (PFS) for its Kalkaroo project, which indicates that a new openpit mine producing 30 000 t/y of copper and 72 000 oz/y of gold was feasible.
The study was previously prepared for potential partner Wanbao Mining by RPMGlobal Asia and Havilah said it released the results on Tuesday to inform the market ahead of a meeting for the approval of a proposed transaction with GFG Alliance member Simec Mining.
Havilah technical director Chris Giles commented that the PFS, at it stood, outlined an “attractive’”openpit copper/gold project with a pretax net present value (NPV) of $564-million at a 7.5% discount, and an internal rate of return of 26%.
The project economic calculations were based on a copper price of $2.89/lb and a gold price of $1 200/oz. The project is highly sensitive to commodity prices with a 10% increase in metal prices resulting in a 48% increase in the pretax NPV to $835-million.
Preproduction capital expenditure is estimated at $332-million with total capital cost, including sustaining and mine closure capital, estimated at $680-million.
Havilah was working with RPM to potentially enhance the PFS.
Havilah is proposing a A$100-million transaction with Simec and announced the proposed deal last month. The funding will be provided through a series of equity placements in Havilah, at a premium of up to 35%, over a three-year period, potentially providing GFG with a 51% stake in Havilah, if all the equity placements are made. Following the equity placements, GFG could potentially acquire direct equity interests in Havilah’s iron-ore assets.