LONDON (Mineweb.com) --Flagging an imminent funding announcement, AIM Resources has adjusted its proposed mining method at its flagship Perkoa zinc project and now expects to come on stream next year, between six and twelve months ahead of schedule.
Perkoa will produce up to 65,000 tonnes of zinc per annum (world wide zinc metal production is 6.8 million tonnes per annum) and lies in Burkina Faso, roughly 120 kilometres west of the capital Ouagadougou and 35 kilometres by road from Koudougou, the third largest town in Burkina Faso. Infrastructure is good; Koudougou is linked by tarred roads to Cote d’Ivoire, Ghana and Togo, and by rail to Abidjan, the capital of Cote d’Ivoire. Process water will be sourced from a dam close to the project.
Perkoa is a volcanogenic massive sulphide deposit, hosted by the Lower Proterozoic Birimian Belt. The deposit, which was acquired by AIM Resources from BHP-Billiton and Metorex in January 2005, is unusual for its high concentrations of zinc and barium mineralisation and relatively low levels of lead and copper. Perkoa had been the subject of three previous exploration campaigns before BHP Billiton was granted the concession, which covers approximately 320 square kilometres, in 1997.
There is a JORC-compliant ore reserve of 6.3 million tonnes at a head-grade of 14.5% zinc, equating to 907.679 tonnes of contained metal. The study incorporates a shaft and decline for access, with a simple processing facility that comprises a crushing circuit, dense media separation, milling an d flotation to produce a relatively clean concentrate grading 53% zinc over a 14-year mine life, with 93% zinc recovery.
The economics of the project look robust. Based on a zinc price of US$1,815/tonne, the in ground zinc metal value is US$1.5 billion and the company forecasts an internal rate of return of 43%. Average cash operating costs are forecast at US$53.5/tonne or US$0.18/lb of zinc in concentrate. The official zinc price in on the London metal Exchange on 8th September was $3,580/tonne or $1.62/lb and the average price of the year to date was $2,921/tonne or $1.32/lb.
Part of the key to the change in the mine schedule has come from the appointment of the engineering, procurement and construction manager, the South African engineering company DRA Mineral Projects. This has seen a new mining method devised.
AIM’s Managing Director, Mr Marc Flory, a senior practitioner in both the mining and the financial sectors, says the main factor in the foreshortening of the schedule stems from the decision to put in larger box cuts to 25 metres as against the original plan to use ten-metre sections. The initial mining rate will be half a million tonnes of ore annually, but it should be possible to raise that within a short period to 650,000 tonnes per annum, generating 65,000 tpa of zinc metal.
A bankable feasibility study was completed by Snowden Mining consultants in December of last year. The company is also making progress with respect to funding; AIM has been negotiating with two smelters and a metals trading company with a presence in West Africa and expects to make an announcement on the subject within a few weeks.
AIM resources is listed on the Australian Stock Exchange and on the AIM market in London (ticker symbols AIM and AIMR respectively) with a current market capitalisation of approximately £230 million or US$435 million. The Perkoa property is 100% - owned, while two further projects include a joint venture with BHP-Billiton in the Mumbwa copper-gold project in Zambia, in an area prospective for iron-oxide copper-gold deposits akin to Olympic Dam and Ernest Henry. Priority targets are currently being drilled. In South Africa AIM Resources owns 100% of the Mokopane nickel-platinum project on the northern limb of the Bushveld Igneous Complex. Mokopane has a JORC-compliant resource of 39.7 million tonnes grading 0.146% nickel, 0.085% copper, 0.22 grammes/tonne platinum and 0.33 grammes/tonne palladium. For the time being, however, the emphasis lies with Perkoa.
AIM Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
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