Proceeds from the loan will be used by Khoemacau Copper Mining (KCM), a subsidiary of Cupric Canyon Capital, to fund project development costs and front end engineering in advance of starting full scale construction in the second half of 2017.
KCM will construct an underground mine at its high-grade Zone 5 deposit in Botswana.
The Zone 5 resource contains 100 Mt of ore grading 2% copper and 20 g/t silver as reported in November 2015. The Zone 5 mine will initially feed the near-by Boseto copper concentrator, which was acquired as part of Cupric Canyon Capital’s purchase of Discovery Copper Botswana announced in July 2015.
The Zone 5 underground mine will be accessed via three declines and will utilise a highly-mechanised, low- cost sub-level open stoping mining method. The Boseto concentrator will be upgraded from its current 3 Mt pa nameplate capacity to 3.6 Mt pa.
The Zone 5 mine is expected to have a minimum life of 25 years and average C1 cash costs of about $1.00/lb.
The total cost to develop KCM’s project is about $350 million, with underground mine development being the largest single cost component. Efforts are underway to optimise both ore grade and capital expenditures. Within the next few months, the Botswana Environmental Ministry is expected to approve modifications to KCM’s environmental permits to facilitate processing Zone 5 ore at the upgraded Boseto plant.
The Botswana Power Company is also advancing development of the high-tension power line that will provide commercial power to the northwest region of Botswana. This power-line project includes a spur line to Boseto and Zone 5, providing low-cost commercial power when KCM starts production in 2019.
“Proceeds from the term loan will enable us to continue development work at Khoemacau as we prepare to begin full scale construction of the starter project in the second half of 2017. All design, engineering and permitting work is progressing well and on schedule, bolstering our confidence that production will start in 2019,” saysDennis Bartlett, Cupric Canyon Capital’s CEO.
“In addition, the most recent drilling results, including the discovery of Zone 5 North and mineral resource updates for the deposits acquired last year are very exciting. We continue to believe that Zone 5, combined with the expansion potential offered by the other deposits within our license areas, represents perhaps the most attractive new copper project in the world today, with the potential to ultimately achieve copper production in excess of 120 000 tpa.”
Future expansions are expected to increase production at Khoemacau up to at least 120 000 tpa of copper. A prefeasibility study with very positive results has been completed for a future concentrator to be built at Zone 5 that will process 6 Mt and produce an average 80 000 tpa of copper.
Cupric Canyon Capital was formed in 2010 with a goal to acquire undeveloped copper assets with a known resource.