Discussion with Stephen Twyerould CEO of Excelsior
On Friday, 2/19, I had an hour long phone conversation with Stephen. Long story short…Excelsior is still on track to produce at the 25MLb/yr rate of copper by the end of 2021 (approx. 2MLb/mo) after a ramp up that will occur over the duration of 2021. I was encouraged by the phone call and – while disappointed they are encountering a couple unforeseen issues – remain optimistic they have a solution identified to get them to the production levels identified in the Feasibility Study for Stage 1.
I was impressed with Stephen's candor and openness during the call. He was very transparent and accommodating. He was not able to share specifics as to flow rate, copper grade in the PLS and the specific number of wells that have achieved breakthrough, as that information has not been released publicly yet.
He spoke with confidence that Excelsior is on track to reach the 2MLb/month rate (25MLb/year) Stage 1 production levels by EOY 2021 and that the issues they've encountered to date are simply teething pains experienced by any operation as they gear up for full production. The projections and methods described in the FS are being implemented without signficant revision, with the exception of some additional back-flushing activities to aid in achieving breakthrough on the injection/extraction well pairs. He emphasized that the team has learned a lot in the past few months.
During the call, we discussed the challenges in addressing the CO2 issue referenced in an earlier NR:
"A variety of issues still need to be worked through, such as how to minimize the impact of carbon-dioxide on fluid flows and how best to maximize flow rates in general; however, we believe that all of these challenges are temporary and will not impact long-term copper production. We expect to be able to expand operations to include the entire wellfield in the very near future." NR dtd 11/10/2020
Definition of “breakthrough”: The state between an injection and extraction well pair where the pregnant leach solution (PLS) is able to flow through without interruption or precipitating into copper sulfide crystals within the orebody.
1. Are there any remaining issues w.r.t. acid supply and entering into long-term contracts for supply?
ST: There are no supply issues with obtaining acid at this time. Excelsior has secured a long-term contract for acid supplies for the remainder of 2021.
2. How many total extraction/injection wells have been drilled so far?
ST: A total of 41 injection/extraction wells were drilled for Stage 1, excluding monitoring wells. As has been previously disclosed, there is no difference between the injection and extraction wells. The only difference are the connections at the top of the wellheads and whether the wells are fitted for injecting or extracting the PLS.
3. Have any well pairs that previously achieved breakthrough fallen out of breakthrough?
ST: We have not observed any well pairs falling out of breakthrough, once breakthrough is achieved.
4. Was the issue with copper sulfide precipitating into crystalline buildup at the extraction wells resolved?
ST: Yes. The copper sulfide precipitation issue has been completely resolved by incorporating the push/pull methodology implemented after January 2020. The push/pull method backflushes the extraction wells with low pH (more acidic) PLS that dissolves the copper sulfide precipitate that formed in the wells.
5. Is the primary problem now the CO2 gas resulting from acid contacting the carbonate in the orebody causing airlocks?
ST: Yes. That is the primary issue we're facing.
6. What are the effects of the CO2 gas formation?
ST: The CO2 creates pockets of gas in the orebody that inhibit/block the flow of PLS from injection to extraction wells. We are able to mitigate these gas pockets by back-flushing the wells with water. This dissolves the gas and allows the PLS to proceed further through the orebody during the next iteration. The present optimization efforts are addressing the amount of water used to backflush. We have observed that there is an optimum balance in the amount of water used. The net effect of the back-flushing activity is that it is taking longer to achieve breakthrough on individual well pairs than we originally estimated.
7. Is there a risk of not meeting the original Feasibility Study projections of copper recovery due to the CO2 issue?
ST: No. The only impact is that it is taking longer to achieve breakthrough. Once breakthrough is achieved, we do not anticipate long-term issues with CO2 gas pocket formation.
8. What other problems exist?
ST: We have had issues with the water elevation and pressure transducers failing due to dynamic range problems with the transducers. The water elevation sensors are used in the extraction wells to ensure that the pumps are underwater to maintain proper cooling to the pump. If the pumps are operated when a gas pocket is present, the pumps can and do fail due to overheating.
The water elevation sensors operate at a significantly lower pressure than the pressure transducers used on the injection wells. When we reverse the flow to backflush the wells (i.e., injection wells become extraction wells and vice versa), the higher pressure is now hitting the water level sensors, which is resulting in some transducer failures. A transducer failure inhibits our ability to accurately "see" the water elevation in that well. So, when we revert back to pushing the PLS through in the original direction, a failing water level sensor may result in that extraction well pump operating out of the water and a overheating condition may occur.
We have recently identified new transducers that are able to handle the dynamic range required whether the well is configured for injection or extraction. However, Covid has impacted the transducer manufacturer's ability to readily supply these components in a timely manner. We expect this issue to resolve as the manufacturer ramps up capacity again.
9. Can the CO2 cause long-term problems with gas in fissures that block acid from reaching fracture surfaces?
ST: No. We do not believe the CO2 issue will create long-term issues. As previously stated, once the well pair achieve breakthrough, the CO2 issue goes away. We are confident that the CO2 issue will affect us only in the short-term.
PG
