Posted on TG by DP today, in response to questions about permitting. Part 14 Nov 2022 12:22
I'll try to explain things as clearly as I can.
The original plan was to draw up an updated feasibility plan, raise financing, get the permit and get into production as soon as possible. However, a few problems arose, the main one being the total collapse of supply chains globally accompanied by inflation and a retrace of 35% in the copper price. This made it impossible to produce a feasibility plan, as it was impossible to procure quotes from companies to provide the sort of equipment and plant we would need in 9/12 months time. Anybody who has tried to get pricing for a product with a long lead in time will confirm this.
At the same time, the price of fuel and chemicals went through the roof. For Empire, the big consumables are going to be diesel and suphuric acid, both of which had risen sharply in price and were also showing extreme volatility: again, making it difficult to produce a meaningful feasibility study. Sulphuric acid, at one point, had risen in price by 400%. That is unprecedented, and because it is unprecedented, nobody has much thought about how to reduce or eliminate the cost of sulphuric acid to copper oxide mines previously.
So the team thought that, rather than press ahead into a market showing unprecedented levels of uncertainty, let's take the time to review the whole project and see how we can make it as robust as possible. The demand for copper is only going to increase. The resource isn't going to vanish. While it is always nice to get into production as soon as possible, there is a time to be patient. So this year the focus has been on optimising a plan of production that could massively reduce the amount of diesel used and eliminate the use of sulphuric acid entirely. That's what ATS is designed to achieve, and it would have huge cost savings: not only is ATS cheaper, but it is much safer to both transport and work with. But that takes time: firstly, there is lots of benchwork to establish how the ATS process works, then there is the process of scaling up, which is what is going on currently: can the labs replicate with tonnes of material what the lab can achieve with kilos? The drilling has established that there are 4 different types of rock at Empire, so they are being analysed and then blended into samples that the lab can use for their testing of the ATS process. If the lab works, then we have to design the plant to produce commercially: this in turn will be informed by the findings in the lab. It might, for example, work best as a continuous process in a big tanks, or it may be we need multiple, smaller units. Or it might not work at all. We just don't know yet. And while we could draw up plans ourselves based on different variables, the BLM would expect to see the final work produced by a professional engineering company, and would it really help if we had drawn up sketches?
(Part 2 to follow)
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