TIDMCAML
RNS Number : 4000U
Central Asia Metals PLC
18 January 2017
18 January 2017
CENTRAL ASIA METALS PLC
("CAML" or the "Company")
Results of the Copper Bay Definitive Feasibility Study
Central Asia Metals plc (AIM: CAML) today announces the results
of the definitive feasibility study (DFS) for its 75% owned Copper
Bay tailings project in Chile.
Summary
-- Mineable resource of 34.8 million tonnes
at a copper grade of 0.24%, containing 84,635
tonnes of copper metal;
-- DFS envisages average annual copper production
of 8,640 tonnes for seven years;
-- Average C1 cash cost of $1.37 per pound of
copper produced;
-- Initial capital of $88.5 million;
-- Post-tax net present value (NPV) at an 8%
discount rate of $34.1 million, at a copper
price of $3.00 per pound;
-- Significant additional resource potential
in surf and bay zones;
-- Copper Bay development on hold pending an
internal review of options.
Project overview
Following the completion of the pre-feasibility study (PFS) in
2015, CAML made the decision to undertake a DFS on its 75% owned
Copper Bay tailings project in the Atacama Region of northern
Chile. Copper Bay Limited effectively holds the exploitation
licence comprising 15.25km(2) .
The project is a site of historic tailings disposal on the beach
at Chañaral Bay. This resulted from the Potrerillos and El Salvador
copper mines releasing tailings residues from their respective
mineral processing operations into the Rio Salado, which outflows
into Chañaral Bay. Between 1938 and 1975, it is believed that some
250 million tonnes of tailings were discharged and now sit in the
beach, surf and bay zones.
The DFS utilises a dredging operation to recover the copper
tailings, a solvent extraction and electro- winning (SX-EW) plant
to produce copper cathode and a flotation circuit to produce a
copper in concentrate product that could be marketed to nearby
smelters.
The DFS was undertaken by Copper Bay with detailed input from
the following international consultants:
-- Cube Consulting Pty Ltd, Australia - geology,
resources, mineable resources, engineering
and financial analysis
-- IHC BV Mining Advisory Services, The Netherlands
- dredge study and mine design
-- M&F Consultores, Chile - environmental impact
assessment (EIA), environmental baseline
studies
-- Wardell Armstrong International, UK - metallurgical
testwork
-- Propipe S.A., Chile - engineering, processing
plant design and capital cost estimation
Mineral Resource estimate
As part of the study, Cube Consulting undertook a Mineral
Resource estimate to JORC (2012) standards and demonstrated
contained copper of 125,820 tonnes at a 0.1% Cu cut-off grade.
Mineral Resource Tonnes Copper Contained
(kt) grade (%) copper (t)
------------------------ ------- ----------- ------------
Measured and Indicated 39,042 0.24 92,166
------------------------ ------- ----------- ------------
Inferred 14,398 0.23 33,654
------------------------ ------- ----------- ------------
Total 53,440 0.24 125,820
------------------------ ------- ----------- ------------
In addition, historical work obtained in 2008 estimated a
non-compliant resource of about 190,000 tonnes of copper within the
surf and bay zones.
The mineable resource comprises 34.8 million tonnes of tailings
material at a copper grade of 0.24%, containing 84,635 tonnes of
copper. The overall mineable resource includes 7% of material that
has been classified as an inferred resource and which forms part of
the overall dredging production plan.
The difference between Mineral Resource and mineable resource
tonnages arises due to material remaining in-situ during the
dredging process to form a berm between the operation and the sea,
and due to removal from the mine plan of a high acid-consuming
lower shell-rich horizon.
Operational summary
The study envisages a nine year project, comprising two years of
construction followed by seven years of operation, which would
process five million tonnes of material annually at a copper grade
of 0.24%. Total copper recoveries in the processing plant are
expected to be 72%, yielding an annual average of 7,080 tonnes of
copper cathode and 1,560 tonnes of copper in a concentrate grading
20%.
Capital cost
Total initial capital expenditure has been estimated at $88.5
million. This figure excludes contingency of $6.8 million.
The table below shows capital expenditure components and
costs:
Component $m
------------------------------------------- -----
Dredging 10.8
------------------------------------------- -----
Site preparation / earthworks 3.2
------------------------------------------- -----
Plant equipment 39.7
------------------------------------------- -----
Plant construction 25.6
------------------------------------------- -----
Pre-production operating costs 3.0
------------------------------------------- -----
First fills 1.4
------------------------------------------- -----
Engineering, procurement and construction
management (EPCM) 4.8
------------------------------------------- -----
Total initial capex, excluding
contingency 88.5
------------------------------------------- -----
Operating cost
The study estimates a C1 life of mine cash cost of copper
production in the lower half of the global cost curve at $1.37 per
pound, excluding contingency costs of $0.05 per pound.
Component Per year ($m) Per pound ($/lb)
--------------------- -------------- -----------------
Plant 18.0 0.93
--------------------- -------------- -----------------
Dredging 2.5 0.14
--------------------- -------------- -----------------
G&A 3.0 0.16
--------------------- -------------- -----------------
Sales and marketing 2.6 0.14
--------------------- -------------- -----------------
Total 26.1 1.37
--------------------- -------------- -----------------
NPV and internal rate of return (IRR)
On the current mine plan, the post-tax NPV of the project is
$34.1 million at an 8% discount rate and a flat copper price of
$3.00 per pound. The project's post-tax IRR is 19.1%.
Gavin Ferrar, Business Development Director, commented:
"We are pleased that the Copper Bay team has delivered the DFS
and that following the Company's total investment in Copper Bay of
$6.2 million, CAML has added significant value in delivering a
project worth $34.1 million based on a copper price of $3.00 per
pound.
"Given the current uncertainty with regard to the near and
medium term expectations for copper, the CAML Board has recommended
that the project remains in our development pipeline while we
review our options. We will update the market as and when
appropriate."
For further information contact:
Tel: +44 (0) 20
Central Asia Metals plc 7898 9001
Gavin Ferrar, Business Development
Director
Nick Clarke, Executive Chairman
Nigel Robinson, CFO
Louise Wrathall, Investor
Relations
louise.wrathall@centralasiametals.com
Peel Hunt (Nominated Adviser Tel: +44 (0) 20
& Joint Broker) 7418 8900
Matthew Armitt
Ross Allister
Mirabaud Securities (Joint Tel: +44 (0) 20
Broker) 7878 3362
Peter Krens
Tel: +44 (0) 20
Bell Pottinger (PR Advisers) 3772 2500
Lorna Cobbett
Aarti Iyer
Marianna Bowes
Qualified Person Statement
The technical information contained in this announcement has
been reviewed and approved by Brian Gregory Fitzpatrick, a
consultant working for Cube Consulting Pty. Ltd. Mr. Fitzpatrick is
a Competent Person as defined by the JORC code, 2012 Edition,
having five years' experience that is relevant to the style of
mineralisation and type of deposit described in the announcement,
and to the activity for which he is accepting responsibility. Mr.
Fitzpatrick consents to the inclusion in the announcement of the
matters based on the work undertaken and context in which it
appears.
Note to editors
About CAML
Central Asia Metals, an AIM-listed UK company based in London,
owns 100% of the Kounrad SX-EW copper project in Kazakhstan. The
Company also has a 75% equity interest in Copper Bay Ltd, which is
a private company that has conducted a definitive feasibility study
at its copper project in Chañaral Bay, Chile. In November 2016,
Central Asia Metals signed a framework agreement to acquire an
effective 80% interest in the Shuak copper exploration property in
northern Kazakhstan. For further information, please visit
www.centralasiametals.com.
Glossary
Cu Copper
------------------ ----------------------------------------
Inferred Mineral That part of a Mineral Resource
Resource for which quantity and grade
or quality are estimated on the
basis of limited geological evidence
and sampling. Geological evidence
is sufficient to imply but not
verify geological and grade or
quality continuity. An Inferred
Mineral Resource has a lower
level of confidence than that
applying to an Indicated Mineral
Resource and must not be converted
to a Mineral Reserve. It is reasonably
expected that the majority of
Inferred Mineral Resources could
be upgraded to Indicated Mineral
Resources with continued exploration.
------------------ ----------------------------------------
Indicated Mineral That part of a Mineral Resource
Resource for which quantity, grade or
quality, densities, shape and
physical characteristics are
estimated with sufficient confidence
to allow the application of Modifying
Factors in sufficient detail
to support mine planning and
evaluation of the economic viability
of the deposit. Geological evidence
is derived from adequately detailed
and reliable exploration, sampling
and testing and is sufficient
to assume geological and grade
or quality continuity between
points of observation. An Indicated
Mineral Resource has a lower
level of confidence than that
applying to a Measured Mineral
Resource.
------------------ ----------------------------------------
Measured Mineral That part of a Mineral Resource
Resource for which quantity, grade or
quality, densities, shape, and
physical characteristics are
estimated with confidence sufficient
to allow the application of Modifying
Factors to support detailed mine
planning and final evaluation
of the economic viability of
the deposit. Geological evidence
is derived from detailed and
reliable exploration, sampling
and testing and is sufficient
to confirm geological and grade
or quality continuity between
points of observation. A Measured
Mineral Resource has a higher
level of confidence than that
applying to either an Indicated
Mineral Resource or an Inferred
Mineral Resource.
------------------ ----------------------------------------
Mineral Resource A concentration or occurrence
of solid material of economic
interest in or on the Earth's
crust in such form, grade or
quality and quantity that there
are reasonable prospects for
eventual economic extraction.
The location, quantity, grade
or quality, continuity and other
geological characteristics of
a Mineral Resource are known,
estimated or interpreted from
specific geological evidence
and knowledge, including sampling.
------------------ ----------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
UPDGGUWCGUPMGQM
(END) Dow Jones Newswires
January 18, 2017 02:00 ET (07:00 GMT)