RE: Great update9 Apr 2020 09:55
The CE oxide discovery we’ve made this year is very modest in size. It’ll be less than 5m tonnes ore. In most circumstances it would be pretty worthless, no ones going to buy the asset and build a mine around that size deposit. Sentinel mine for example would process 5m tonnes of ore in about 5weeks!
The CE oxide deposit whilst small is high grade. ARCM are in the great position of being able to use the built small scale plant to monetize that. Lots of juniors have a larger resource, but no way to take advantage of it. Arcm does and that matters significantly.
Information on the plant is limited at the moment. What we do know is
1) it is expected to be able to process 10,000 tonnes or ore a month. This is mainly limited by the residence time in the leach tank (how long is spends in acid). This was expected to be 6hours, however it might be possible to decrease that to 2hours therefore trebling plant processing ability to 30,000 tonnes per month. This would probably involve some additional capex
2) NVS previously commented when discussing kaliba deposit not being suitable that 1% grade is required to make running the plant worth while.
3) Grades at CE high grade zone can be seen on assay RNS. Without doing a full exercise working out average I’d say we’re about 1.5% average.
4) Ways of concentrating the ore are being reviewed. There are a number of ways of doing this - simple jig system through to dense media separation and X-ray scanning and sorting of Ore into higher and lower grade piles
5) Smelters in Zambia want Zambian ore to process. They are very short. They used to import ore from DRC, but now there are taxes on imported ore making this less attractive.
6) smelters will often advance pay small producers to upgrade their plant as part of any offtake agreement
7) the company is producing an economic report on the plant. This will review all aspects above regarding whether it’s worth the additional capex to increase throughout to 30k tonnes per month and what type of equipment to use (again more capex) to concentrate the ore more. This review will be like a mini scoping study/BFS and will be worked on during rainy season
From NVS comment grade needs to be 1% to be worth while you can probably take that to mean anything over 1% would be profitable with anything below just covering costs.
Base case processing 10k ore per month at 1.5% grade, but binning if 1% to cover costs and keeping the 0.5% as profit would get you profit of 50tonnes copper per month. Say we sell at $5000 per tonne that’s $250k profit per month.
If you trebled production rate $750k per month.
Where it gets more interesting is speculation on how high you could concentrate the ore before being fed into plant.
For example if you could get it to 2% grade then instead of 0.5% grade being profit you’d be 1% - twice as high.
A copper oxide producer that went under with debts called cradle arc did a test using dense media separation.
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