In line with its vision of building a substantial copper-cobalt company in Central Africa, ASX-listed exploration and development company Nzuri Copper is fast-tracking the development of its flagship Kalongwe copper-cobalt project in the DRC.
The project already has a clear near-term development programme in place.
This article first appeared in Mining Review Africa, Edition 4 2018
Located within the tier 1 address of the north-western portion of the Central African Copperbelt, the Kalongwe project hosts a near surface oxide JORC-compliant resource of 302 000 t of contained copper (Cu) at an average grade of 2.70% Cu that also includes 42 000 t of cobalt (Co) at a grade of 0.62%.
Kalongwe importantly also has a JORC-compliant reserve of some 6.98 Mt at 3.03% Cu and 0.36% Co.
Responsible for an estimated 63% of the world’s cobalt and about 10% of the world’s copper production in 2016, the Central African Copperbelt is host to several new world-class mining developments, most notably Ivanhoe Mines’ Kamoa-Kakula deposit – which has been ranked as the world’s largest undeveloped high-grade copper discovery.
Taking Kalongwe through to development
Claiming its stake within this highly prospective belt, Nzuri Copper (formerly Regal Resources) acquired a 30% stake in the Kalongwe copper-cobalt project at the end of 2013 and completed a positive scoping study on the asset thereafter.
As a means to grow its landholding in the region, the company signed a memorandum of understanding with TSX-listed Ivanhoe Mines in 2015 to earn up to 98% interest in the Fold and Thrust Belt JV project, also in the DRC.
Increasing its focus on the development of the company and its assets, 2016 saw a consolidation in ownership of the Kalongwe asset by the company – taking its total ownership to 85% as well as a turnaround in the company’s development strategy to facilitate the future development of the asset.
It was also the year in which CEO Mark Arnesen and COO Adam Smits joined the company to action the new strategy.
Appointed in January 2016 and October 2016 respectively, Arnesen and Smits spearheaded the development of the latest chapter in the company’s history which saw the company commence fast-tracking the development of the Kalongwe copper-cobalt project.
Did you know? The word Nzuri means ‘beautiful’ in Swahili
Renamed in January 2017 from Regal Resources to Nzuri Copper, 2017 was the year in which the development plan for Kalongwe was actioned and saw the company successfully complete the Stage 1 feasibility study (FS) in October 2017.
The FS for an open pit, 1 Mtpa dense media separation (DMS) project confirmed the viability of a high grade copper and cobalt project capable of producing 19 360 tpa of contained copper and 1 507 tpa of contained cobalt (at an average recovery of 64% copper and 40% cobalt) over a seven year mine life with low capital costs (US$53.12 million capex and a 21 month payback period) and strong financial returns including a pre-tax NPV of $116 million and pre-tax IRR of 71% and a 12 month timeline to production once funding and board approvals are secured.
The FS also highlighted the significant upside potential that exists at Kalongwe that can be unlocked through a future Stage 2 solvent extraction – electro winning (SX-EW) project expansion that could see Nzuri Copper increase its project mine life to well beyond the initial seven years with some +6 Mt of mineralised rejects and Cobalt only ore available to process at the completion of the initial DMS 7 year project life.
During 2017, Nzuri Copper also advanced an extensive copper-cobalt exploration at the Fold and Thrust Belt JV project having completed 7 200 m of trenching and about 7 000 m of reverse circulation and diamond drilling.
At the end of 2017, Nzuri Copper secured an A$10 million cornerstone investment from the world’s largest cobalt chemicals producer Zhejiang Huayou Cobalt, through its wholly-owned subsidiary Huayou International Mining Hong Kong, that entitles it to a 14.76% shareholding in Nzuri Copper.
The proceeds from the transaction are funding ongoing development activities and optimisation studies at the Kalongwe project, including a leaching/SX-EW scoping study and test work programme and allow the company to pursue an aggressive ongoing exploration campaign within its Fold and Thrust Belt JV project in 2018.
According to Arnesen, 2018 should be a good year for Nzuri Copper as the company embarks on its funding proposals for Kalongwe in the run up to project execution.
“We are looking at a funding the project through a 50:50 debt to equity ratio with debt funding potentially through our South African suppliers, or other sources, and equity from our shareholders with the potential of equity to be raised through off-take agreements if needed,” says Arnesen.
Unlocking further potential at Kalongwe
The company embarked on a leaching/SX-EW scoping study and metallurgical test work programme in January 2018 as a means to unlock greater copper and cobalt value. Australian engineering firm Lycopodium will undertake the scoping study, having successfully delivered the Kalongwe FS.
According to Smits, the high-level Kalongwe Stage 2 scoping study will determine the viability for a full SX-EW development as well as a variety of post-DMS development options currently being considered for Kalongwe Stage 2.
“The metallurgical test work programme, to be undertaken in parallel with the scoping study will utilise a 4.2 t sample collected during 2017 and will pave the way for a detailed Stage 2 SX-EW pre-feasibility study, planned for the second half of 2018,” says Smits.
“This will allow us to evaluate all key parameters for the leaching and SX-EW recovery of copper-cobalt ores from Kalongwe,” he adds, noting that it will also confirm the potential of processing cobalt-only ore and mineralised rejects stockpiled during Stage 1 of the project.
Growth strategy – The Fold and Thrust Belt JV
Nzuri Copper has exploration upside potential within the 334 km2 Fold and Thrust Belt JV project. The company signed a JV agreement with Ivanhoe Mines in 2015 to acquire a 98% interest in Ivanhoe’s permits PRs 688, 689, 702 and portions of PRs 690 and 701, which is contiguous with the Kalongwe project.
As part of the JV, Nzuri acquired a comprehensive technical database containing detailed geophysical and geochemical drilling information for the permits.
The Fold and Thrust Belt JV project contains five highly prospective tenements including the Monwezi West Cluster; Kasangasi; Kambundji East; Mamba; and the Mutwa and Mulonda Funda prospects.
The company is under way with an aggressive expanded exploration campaign during 2018 at the Fold and Thrust Belt JV project targeting:
- Near-mine satellite targets at Monwezi, which has the potential for new copper-cobalt resources;
- Large-scale ‘Kamoa-Kakula’ style targets at Kasangasi; and
- The exceptional pipeline of regional exploration opportunities.
Resource potential at Monwezi
The key focus at Monwezi is unlocking further copper-cobalt resources through near-mine exploration from two main targets at Monwezi which were identified through the 2017 drilling campaign.
Showing most promise at this point is the Monwezi 2 and Monwezi 7 targets within the Monwezi West Cluster target, which is located 2-5 km from Kalongwe. Nzuri Copper believes that Monwezi has the potential to add additional copper and cobalt resources with the potential to become a satellite resource to the Kalongwe project and extend the Kalongwe mine life.
Monwezi 2 has been identified to host Kalongwe-style mineralisation over a 300 m strike length while high-grade cobalt has been intersected during trenching and drilling at Monwezi 7.
Kasangasi’s Kamoa-style mineralisation
Kasangasi, located 17 km from Ivanhoe’s Kamoa-Kakula deposits, has been confirmed as a key target for Kamoa-style mineralisation with 3 km of identified strike length to explore in 2018.
Significant exploration was undertaken at Kasangasi in 2017 including mapping, trenching and drilling, which has helped define the geometry and style of mineralisation – which is the equivalent rock sequence that hosts the Kamoa-Kakula deposits.
“Having identified what we believe is the contact area, reverse circulation and diamond drilling will begin in April to test the extents of the Kamoa-style mineralisation, says Arnesen.
Regional target potential
Nzuri Copper has a strong pipeline of regional targets including targets generated by a 9 900 line-kilometre high-resolution aeromagnetic survey completed in September 2017.
“While Monwezi 2, Monwezi 7 and Kasangasi will remain our main focus in 2018, we will continue to explore our other regional targets including Kambundji East; Mamba; and the Mutwa and Mulonda Funda prospects in an extremely focused manner, says Arnesen.