Trident project + Kansanshi copper/gold operation
In April 2011, large scale mining licenses for the development of the Trident project were received from the Government of the Republic of Zambia. The licences give the Company the exclusive rights to carry out mining operations on the full area of interest at Trident for a period of 25 years. See "Exploration" for further discussion on the Company's exploration program at the Trident project.
Based on an internally-generated resource estimate, the Company is proceeding with the design of a project that will initially produce 150,000 tonnes of copper in concentrate annually then rising up to 300,000 tonnes of copper in concentrate. Once the resource drilling is complete, the production target may be increased further. A National Instrument 43-101 compliant resource statement for the Sentinel deposit is expected in mid 2011.
Subject to final permits, results of the on-going resource and mine studies and approval by the Company's Board of Directors, it is expected that the initial design and construction phases could commence during 2011 with commercial production in early 2014.
It should be noted that the potential quantities and grades and other technical parameters presented in this document in relation to the Trident project are conceptual in nature only. There has been insufficient exploration to define a NI-43-101 compliant resource and it is uncertain whether further exploration will result in the Sentinel deposit being delineated as a mineral resource and whether the Sentinel deposit will be developed into a mine.
Kansanshi copper/gold operation, Zambia
Kansanshi has commenced phase one of a two phase project which has the intention of expanding the annual copper production capacity from the current 250,000 tonnes to 400,000 tonnes of copper by 2015. Phase one is expected to increase annual production capacity to approximately 285,000 tonnes. It is focused on expanding the annual treatment capacity of the oxide circuit by about 20% to 8.5 Mt and building in flexibility to allow for the mixed and sulphide circuits to be switched as needed to suit mining activity. The expansion will include the use of relocated equipment from the recently closed Bwana Mkubwa copper SX/EW plant as well as new installations. This phase of the expansion project is scheduled for completion during Q4 2011.
Construction of phase two is expected to start in the second half of 2012 with commissioning targeted for the first half of 2014. This phase of the expansion will focus on the construction of a new concentrator with a planned annual throughput of 25 Mt of ore. As a result, Kansanshi's total annual production capacity is expected to increase to approximately 400,000 tonnes of copper. The capital budget for phase two is projected to be in the range of approximately $350 million
Potential copper smelter, Zambia
Currently, Kansanshi's concentrate production is treated at smelters in Zambia, but from time to time, due to limited capacity, copper concentrate is sold to third parties for export sale. Due to the substantial increase in production expected from the Kansanshi mine together with anticipated new production in Zambia including from the Sentinel deposit, an evaluation is currently underway to determine the economics and options for building and operating a copper smelter near Kansanshi. This evaluation is expected to be completed in the second half of 2011.
Exploration
Exploration activities continued at a high rate during Q1 2011 with ongoing drill programs in Zambia, Finland, Peru and Mauritania.
Trident
Up to sixteen core drills are active on the Trident project which comprises the Sentinel copper deposit and the Enterprise and Intrepid targets. Over 140,000 metres of drilling has been completed in more than 380 holes on Sentinel since the Company commenced work in April 2010. A broad grid of 200 x 200 metre spaced holes is currently being in-filled to 200 x 100 metres which should provide necessary confidence for resource classification and reserve definition of the core of the deposit. Strong results at the western end of the property will move the focus westwards and may provide an attractive area of near surface resources for commencement of mining. Drilling is scheduled to complete definition of the main Sentinel copper resource in May 2011 and resource modeling and optimization studies are planned for Q3 2011. Drilling emphasis will then move to the eastern end of the deposit where, despite lower and more variable copper grades, nickel and cobalt intercepts in recent and historical drilling make this area an attractive target for further work.
Five drills have continued testing the Enterprise nickel prospect twelve kilometres to the northwest of Sentinel. Forty-five core holes have now been completed on a series of sections over approximately 1,100 metres of strike. Mineralization has been intercepted on most sections and some impressive intercepts of width and grade appear to relate to strongly altered zones around intersections of faults and carbonaceous stratigraphy. Establishing continuity of the high grade zones in this unusual hydrothermal nickel system will require a substantial amount of detailed drilling. Drilling has also recently commenced on other regional targets to the northeast of Sentinel.