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First Quantum plans $800m investment
By DEAN MWAANGA
FIRST Quantum Minerals Limited intends to invest about US$800 million to develop its Sentinel deposit (formerly Kalumbila Mine) which the firm expects to be productive by 2014.
Chairman and chief executive officer Philip Pascall said his firm, which also owns Kansanshi Mine in Solwezi, may increase its investment at its new mine if the drilling and development evaluation programme meets its expectations.
Commenting on the progress report on the exploration programme underway at the Sentinel deposit (150km North-West of Solwezi), which forms part of the Trident project, Mr Pascall said potential exists for a larger resource at the site.
“At present, based on our experience with other development projects, we expect the capital cost to develop, including the necessary infrastructure, could be in the range of US$600 to US$800 million,” Mr Pascall said.
He said based on drilling, the mining company believes that the resource can be in the range of at least 300 to 400 million tonnes.
“As a result, the programme has been extended to cover a strike length of approximately 11.5 kilometres. Assuming the results of further work are consistent with work to date, the potential exists for a larger resource,” Mr Pascall added.
He said that FQML is carrying out an evaluation for an operation based on an annual output rate of 25 million tonnes per annum.
Mr Pascall said at the current stage, both mining and processing conditions appear to be relatively straightforward and the company expects the unit cash cost of production to be in the range of its other Zambian operations.
He said while FQML has set a very tight schedule to get to a potential development decision, which it anticipates to happen in the second quarter of 2011 followed by a two-and-a-half year construction phase that will lead to production in 2014, the mining company is confident the final resource estimate will support their approach.
FQML president Clive Newall said nearly 50,000 metres of drilling has been completed in 148 holes to date with 14 rigs now on site since resource drilling started in March this year.
He said social and economic studies are in progress with a view to delivering a full environmental impact statement in the second quarter of 2011 adding that a timeline has been established to complete a mining licence application by the second quarter 2011.
Mr Newall however, said a decision to proceed with development of the project is subject to results of the resource and mine studies, securing all relevant permits and approval by the board of directors.
The Trident project comprises five prospecting licences totalling 2,300 square kilometres containing a number attractive base metal prospects including the Sentinel deposit.
The Trident project, approximately 150 kilometres north-west of Solwezi, was obtained through the acquisition of Kiwara Plc in February 2010.