Mar 25 Jan 2011 18:47
FQM Zambia
At the Kansanshi operation, an expansion project is underway to expand annual copper production capacity from the current 250,000 tonnes to 400,000 tonnes of copper in 2015. The expansion project will be implemented in two phases. Phase 1, which is currently underway, is expected to increase annual production capacity to approximately 285,000 tonnes. It is focused on expanding the treatment capacity of the oxide circuit by about 20% to 8.5 million tonnes 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 has a capital budget of $40 million and construction completion is scheduled for the fourth quarter of 2011.
Construction of Phase 2 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 million tonnes 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 2 is expected to be in the range of $350 million.
In addition to the production expansion project, Kansanshi's drilling program has been stepped up with a primary focus on the Southeast Dome prospect. An updated reserve and resources estimate incorporating results from the program is expected to be released by the end of 2011. The capital budget for the drill program in 2011 of $16 million compares to approximately $3.5 million in prior periods.
Sentinel copper deposit, Zambia
Although a NI-43-101 compliant resource is not expected until mid-2011, based on drilling and other work to date, the Company's internal study has been updated since first reported on in October 2010. The internal study now assumes a resource of at least 700 million tonnes, headgrade in the range of 0.65% to 0.80% copper and annual throughput rate of 40 million tonnes of ore for annual production of approximately 250,000 tonnes of copper. Both mining and processing conditions continue to appear to be relatively straightforward supporting the assumption that the unit cash cost of production is likely to be in the range of the Kansanshi mine. Results from the ongoing drill program, which has 14 rigs on site, may lead to an expansion of the resource base and allow the possibility of further production expansion.
Subject to results of the on-going resource and mine studies, securing all relevant permits and approval by the Company's board of directors, the Company expects that the initial design and construction phases could commence during 2011 with commercial production in early 2014. Based on these assumptions and the Company's experience, the capital cost to develop, including the necessary infrastructure, is expected to be in the range of $1 billion.
It should be noted that the potential quantities and grades and other technical parameters presented in this document in relation to the Sentinel deposit 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.
Potential copper smelter, Zambia
Currently, the bulk of Kansanshi concentrate production is treated at smelters in Zambia, but from time to time, due to limited capacity, some copper concentrate is sold to third parties for export sale. The Zambian smelters are located at least 250 kilometers from the Kansanshi minesite. Due to the substantial increase in production expected from the Kansanshi mine and the anticipated new production from the Sentinel deposit, an evaluation is currently underway to determine the economics and options for building and operating a copper smelter close to Kansanshi. The evaluation is expected to be completed in the second half of 2011.
http://www.investegate.co.uk/Article.as ... 422420571A
