26 Sep 2013 07:00
BERKELEY MINERAL RESOURCES PLC
("BMR" or "the Company")
Copper processing update
Initial production expected to commence at Kabwe in Q4 2013
Berkeley Mineral Resources (AIM:BMR), the AIM listed resource company engaged in the processing of tailings dumps in Zambia, provides an update on the progress made by its 100% owned Zambian subsidiary Enviro Processing Ltd ("EPL") to commence processing of copper tailings in Northern Zambia and at Kabwe in Central Zambia. The Directors believe that copper production will commence at Kabwe by the end of the fourth quarter in 2013.
Kabwe area
Plans are now well advanced for the implementation of BMR's copper processing plant at Kabwe. The plant has been delivered to the Kabwe site and is being erected between the historic concentrator plant and the railway running through EPL's property. The tailings from this plant will be housed in EPL's Davis Shaft area. Installation infrastructure has been specified and is in the process of being installed, including electrical connections and water supply.
In parallel, negotiations for material supply have been commenced with third-party owners of commercial-grade copper tailings and in some cases mines within a 100 kilometre distance from Kabwe; there are at least 20 small-scale resources that meet these criteria in the region. A pre-feasibility study will be completed once all the test work and supply studies have been completed and Environmental Project Brief ("EPB") will be lodged with the Zambian authorities by EPL when resource negotiations are complete.
Ndola area
Further to the announcement of 24 October 2012, the proposed operating arrangement with Phoenix Materials Ltd ("Phoenix") has been replaced by a Joint Venture agreement on similar terms. Together with the Bwana Mkubwa Consortium announced on 4 February 2013, BMR now has two Joint Venture ("JV") operations in the Ndola area. Revised plans to process ores from both at the Industrial Zone site it has secured have been agreed by the JV parties. Infrastructure for power, water and road transport connections already exists at this site.
BMR's revised plans follow the conclusions of metallurgical testing carried out by the Company's consultants on the material from both sets of resources. The revised combined estimate of tailings resources from both of the licence areas subject to JV agreements is estimated approximately 3.64 million tonnes of oxide copper minerals with a grade of approximately 1% copper. For the Bwana Mkubwa ores, an 80%+ recovery has been achieved in tests with a low acid consumption of 50kg per tonne as there is only a small proportion of acid-consuming materials present in the ore. These figures are not JORC compliant and as such should not be relied upon for economic purposes.
Two processing options are being considered by the Directors and their consultants. Firstly, multi-stage leaching and an EW circuit to produce copper-pregnant liquor solutions varying from 30 g/l to 10 g/l Cu which could produce an estimated 5,300 tonnes of cathode copper per annum. Alternatively the Company may opt to purchase a 15% copper oxide concentrate which would be processed together with Bwana Mkubwa ores in a single stage leaching and EW circuit which could produce an estimated 14,200 tonnes of cathode copper per annum. These production estimates are subject to a verification process to be conducted by a 3rd party processing consultancy firm.
The Directors believe that the latter option is expected to provide significantly higher returns on capital, with capital payback period within approximately 8 months. The project would have a five-year life from the Bwana Mkubwa ore source alone and a 7.5-year life from both sources. BMR is now proceeding to conclude the verification of the size of the resources and mineral head grades prior to completing a Pre-Feasibility Study. An EPB will also be completed for the verification process and, once the final process design and tailings plan has been approved, a final EPB for the processing plan will be commissioned.
Additionally, an Option is being negotiated to secure a further existing licence area within the Bwana Mkubwa mine area where preliminary information indicates further substantial deposits exist and the Company also intends to explore further along strike from the now dormant Bwana Mkubwa mine site.
Chingola Area
BMR already has Options over Licences at the Rephidim and Sensele clusters of copper tailings containing an estimated volume of 22.8 million tonnes with an approximate grade of 1.0% copper. The Company has an objective of obtaining mineral rights over a further 8 million tonnes of ore in the Chingola area and intends to commission a Chingola Scoping study as soon as negotiations over this ore are concluded.
There is a wide variance in rock dump composition in the Chingola region; some dumps favour oxides such as malachite while others contain more abundantly sulphides from basement complex rocks. BMR commissioned Namibian consultants Mineral Exploration International to carry out the first stage of the verification process in summer 2012 and this provided volume estimates via satellite imagery techniques and grade estimations. It is also the intention of BMR to complete a final verification programme by an accepted 3rd party verifier to produce volume and grade statements on these resources. All previous scientific works will also be reviewed by the appointed verifier.
From these verified reports a strategic plan to combine similar types of dump materials for processing with nearby infrastructure will be completed. EPB's for this verification and for the final processing plan will also be commissioned.
Masoud Alikhani, Chairman commented:
"Copper is a metal of world importance. However, unlike miners who have to explore for it, BMR has secured substantial above-ground resources in Zambia which are known, measurable and ready to process, without incurring the costs for either exploration or mining. We expect to have initial copper production at Kabwe in the fourth quarter with the other sites progressively coming on stream in 2014."
26 September 2013
This release has been reviewed by Dennis Human, B.Sc. (Hons), Bus. Admin (Hons), MGSSA, Consulting Geologist to the Company, who is a Qualified Person in accordance with the guidance note for Mining, Oil & Gas Companies issued by the London Stock Exchange in respect of AIM Companies.
For further information please contact:
Berkeley Mineral Resources Plc
Masoud Alikhani, Chairman
020 7408 1181
Cantor Fitzgerald Europe
Stewart Dickson / Julian Erleigh (Corporate Finance)
Jeremy Stephenson (Corporate Broking)
Tel: 020 7894 7000
Lothbury Financial Services
Michael Padley /Gary Middleton
020 3440 7620