I'm really impressed by how much better the numbers are for Kakula compared to an earlier economic assessment for Kamoa. 3 Mtpa (million tons per annum) at Kamoa resulted in a NPV (net present value) of $986 million. 4 Mtpa at Kakula resulted in a NPV of $3.7 billion.
Highlights from both PEAs are below. All of the numbers have changed significantly for the better.
I think we saw some sell the news profit taking yesterday. IVPAF climbed from a low of 1.39 on 10/27 to a close of 2.17 on the day before the news.
(12-13-2016)HIGHLIGHTS
Initial option for a single 4 Mtpa mine
The preliminary economic assessment (PEA) results finalized this week present two initial scenarios for development of the high-grade copper deposits at the Kamoa-Kakula Project on the Central African Copperbelt, west of the Democratic Republic of Congo’s Katanga mining region.
One initial option analyzed in the PEA is the development of a four-million-tonne-per-annum (Mtpa) Kakula Phase 1 Mine at the Kakula Deposit, in the southerly portion of the project’s discovery area. For this option, the PEA envisages an average annual production rate of 216,000 tonnes of copper at a mine-site cash cost of US$0.37/lb copper for the first 10 years of operations (see details Table 4, page 10), and peak copper production of 262,000 tonnes by year three.
A pre-production capital cost of US$1.0 billion for this option would result in an after-tax net present value at an 8% discount rate (NPV8%) of US$3.7 billion – an increase of 272% compared to the after-tax NPV8% of US$986 million that was projected in the March 2016 Kamoa pre-feasibility study. The internal rate of return of 38% would be more than double the return that was estimated in the March 2016 Kamoa pre-feasibility study.
Initial option for two mines producing a total of 8 Mtpa
The PEAalso analyzed an alternative initial option that could involve a two-phase sequential expansion of production to 8 Mtpa from the proposed Kakula Phase 1 Mine at the Kakula Deposit and also the Kansoko Mine at the adjacent Kamoa Deposit.
Under this alternative, the PEA envisages US$1.0 billion in capital costs and an average annual production rate of 292,000 tonnes of copper at a mine-site cash cost of US$0.42/lb copper during the first 10 years of operations, (see details Table 8, page 18), and peak production of 370,000 tonnes by year seven.
Under study: New option for one mine producing 8 Mtpa, plus expanded output options of up to 16 Mtpa from two mines
The follow-on PEA, now underway, is examining an alternative approach that would see development of a single 8 Mtpa mine on the Kakula Deposit. This option is expected to have substantial advantages over the development of two mines to achieve the same production rate. Planned studies also will assess higher mining rates of up to 16 Mtpa, which would utilize high-grade copper mineralization from both the Kakula Deposit and the Kansoko Sud and Kansoko Centrale areas of the adjacent Kamoa Deposit.
(2-23-2016) Highlights of the Kamoa 2016 PFS:
Annual mine production of 3 Mtpa at an average grade of 3.86% copper over a 24-year mine life, resulting in annual copper production of approximately 100,000 tonnes.
Initial capital cost, including contingency, is US$1.2 billion, approximately US$200 million lower than estimated in the Kamoa 2013 PEA.
Life-of-mine average mine-site cash cost is US$0.75/lb of copper.
After-tax net present value (NPV) at an 8% discount rate of US$986 million.
After-tax internal rate of return (IRR) of 17.2% and a payback period of 4.6 years.
High-grade copper concentrate with an average grade of 39.2% copper and very low arsenic levels.
Improvements to the mining method have the potential to reduce average mine site cash cost during the first phase to US$0.61/lb of copper, and improve the after-tax NPV at an 8% discount rate to US$1.182 billion, the IRR to 18.9% and the payback period to 4.3 years.
“The results of this independent pre-feasibility study confirm the robustness of the Kamoa Copper Project over a wide range of copper prices, with the potential for significant improvement in the results as we move forward on the Feasibility Study,” said Mr. Friedland.
“We know of no other copper project in the world that offers the potential of multi-decade, large-scale, mechanized production from a near surface, stratiform deposit grading nearly 4% copper, with the demonstrated potential for further high-grade discoveries nearby, and located close to a major mining centre.
AI
