Cupric Canyon Capital will achieve this through its wholly-owned Botswanan subsidiary Khoemacau Copper Mining.
The project is a significant investment for the country and represents the start of what could ultimately be an 80 000+ tpa copper/silver producer in the region, Cupric Canyon Capital COO, Robert Coyle, tells Laura Cornish.
Cupric Canyon Capital is owned by its management as well as Global Natural Resource Investment, a spin-off investment management company of Barclays bank. The company is focused on providing funding and expertise to advance the development of copper mining projects.
After years of exploration and studies, the flagship Zone 5 copper/silver project, which Cupric Canyon Capital acquired in its entirety from cash strapped Hana Mining in 2013, is set to move into construction towards the end of the year, with first production targeted for the last quarter of 2019.
“While Hana had been focused on delivering a large, open pit operation at the Banana Zone (90 km to the south-west of Zone 5), Cupric Canyon Capital was unable to identify sufficient ore to warrant building a mine and was unable to raise any more cash to pursue its aspirations further,” states Coyle.
“Our management team, comprising former executives of Phelps Dodge, Freeport McMoRan and Newmont, saw the potential for an underground mine within the licence area because the mineralisation is similar to the well understood Lufilian arc mineralisation in Zambia and the Democratic Republic of Congo.
“After acquiring Hana, we immediately identified two key strongly mineralised target areas to drill – Zone 5 (a 4.2 km linear ore body) and the Banana Zone (a double plunging anacline with underground mining potential on the south limb.”
The Zone 5 area is buried below 30 m of windblown dense Kalahari sand, which is the primary reason why the deposit had not been found by previous explorers.
In 2019 Botswana will celebrate the production start-up of a new copper/silver mine in the country which has the potential to expand significantly as well.
Having drilled six core holes on the two deposits to a depth of 600 m to determine the viability of underground mining, every hole at Zone 5 hit ore grade mineralisation grade and thickness.
Four of the six holes delivered similar results at the Banana Zone.
“Zone 5, with an average ore body thickness of 10 m and a dip of 56°, was clearly the ideal area to pursue and we subsequently drilled 200 000 m of core over 400+ holes on the licence area,” explains Coyle.
Preparing for construction
Between 2013 and 2016, Khoemecau Copper Mining went through the processes necessary to prepare Zone 5 for construction start-up. This included acquiring the mining licences (granted in 2015 for both Zone 5 and the Banana Zone), conducting metallurgical and environmental test work, and completing a feasibility study to validate the size and scope of the project.
In February 2015 Cupric Canyon Capital acquired former copper producer Discovery Metals’ assets out of bankruptcy – this included four mining licences and the Boseto 8 000 tpd (3 Mtpa) concentrator with associated infrastructure which will according to current plans be upgraded and used to process the Zone 5 ore.
“We have employed a skeleton staff to maintain the mill in operating condition and we will need to transport the ore material some 30 km to the plant once we become operational,” notes Coyle.
Late in 2016 the management team made the preliminary decision to advance Zone 5 towards production. A US$50 million loan was arranged with UK-based metals focused investment group Red Kite Mine Finance to bridge the gap between the decision to move into production and releasing the full project for development.
“We are now working with a number of financial institutions to obtain the outstanding $350 million capital necessary to build the mine and upgrade the plant,” says Coyle.
A closer look at Zone 5
Once complete, the first stage of development at Zone 5 will comprise three independent declines/mines situated about 1 km apart – this reduces the cost of hauling laterally.
They will however be interconnected underground so that as the mines progress at depth they can accommodate additional trucks, operating in a loop, to prevent haulage congestion.
The mine has been designed to operate at a ROM rate of 10 000 tpd/3.6 Mtpa at an average head grade of 1.7% copper and a silver grade of 16 g/t. The concentrator will produce 50 000 tpa of copper and 1.4 Moz of silver in concentrate for 27 years.
Box cut excavation is scheduled to start in the last quarter of 2017.
A fair amount of investment is required to upgrade the plant from 8 000 to 10 000 tpd and is scheduled to start towards May/June 2018 to ensure it is ready to receive ore when the mine starts producing.
“In addition to general de-bottlenecking work, this includes replacing the filtration plant with a Larox filter and upgrading the crushing facility. We will also install an ISA regrind mill to ensure the flotation circuit receives a finer grind material, together with Jameson flotation cells which have smaller bubbles to float finer grind material to achieve a higher quality concentrate,” explains Coyle.
Aurecon Botswana was appointed to undertake a feasibility level study to consider extensions to the existing Boseto tailings storage facility (TSF). The existing TSF, currently on care and maintenance, was originally designed to receive approximately 3 Mt of tailings per annum over a design life of 10 years.
The larger Zone 5 production output requires storage capacity for a total of 66 Mt over the life of mine. The existing TSF can be modified to accommodate this increase.
At present, Khoemacau Copper Mining is underway with construction of on-site camp facilities and an access road to the Zone 5 area.
It will also install a power line next year along the same corridor as the access road to feed into a new power line that local utility company Botswana Power Corporation is investing in which will run into the north west of the country.
The Grid Power project is particularly focused on delivering power to the Kalahari Copper Belt given the national importance of the development of Botswana’s copper industry.
Coyle notes that the entire Zone 5 Starter project requires about 30 MW of power – “fortunately, the Discovery Metals acquisition included a 20 MW diesel-fired generator plant which we can use to operate the plant during commissioning; however, connecting to the national grid in Botswana is key to the long-term success of our operation.”
Cupric Canyon Capital also recently announced that it has awarded the project EPCM contract to engineering house Flour, which has already commenced with a capital re-estimate on the project.
“Fluor is very active in Botswana and has a significant presence and experience in the country. Considering the biggest challenge in Botswana is sourcing the right local workforce, Fluor will assist in delivering on this requirement,” states Coyle.
The local copper mining development company will directly employ about 1 000 personnel in total across the whole project once in production, which includes a contract miner.
Thinking about the future
The success of an early 2015 drilling programme on Zone 5 demonstrated the potential for a much larger resource along strike and at depth, which would support a production rate well about the 3.6 Mta planned for the Starter project.
A 100 Mt resource (43% is measured and indicated) with 2% copper and 20 g/t silver has been defined for Zone 5. Additionally, 25 Mt of inferred ore at the newly discovered Zone 5 North prospect will add significantly to the value of the district once the ore is proved up.
A pre-feasibility study conducted on larger-scale production concluded that an ore mining rate of 6.1 Mtpa was optimal from an economic perspective, and also practical and achievable considering the scale and geometry of the Zone 5 ore body.
This option is known as the Expansion project and also considers the development of five primary declines at Zone 5 to deliver the 6.1 Mtpa rate to a 16 800 tpd milling operation to deliver as much as 80 000 tpa of copper.
This expansion project does not fully utilise the Boseto plan and infrastructure, which can then be retained for the development of nearby resources, possibly within the Discovery Metals licences that Cupric Canyon Capital acquired.
“We have drilled a few holes at depth of the Discovery ore bodies and uncovered that they also continue at depth. The combination of these resources processed at Boseto, in combination with the Expansion project, could see Cupric Canyon Capital ultimately produce in excess of 100 000 tpa of copper,” highlights Coyle.
Main contractors for Zone 5
RungePincockMinarco: Resource and geology
Mining Plus: Resources reserve statements, underground mine plan and preliminary engineering work for underground mine
Middindi Consulting: Geotechnical
Fluor: EPCM contractor
Sedgman: Plant upgrade design