Thank you kindly for taking the time to write up such a detailed reply. HotCopper needs more quality posts like this.
Your post has detailed some of the historical challenges as they pertained to the Nifty orebody at the time.
I became aware of these during my original due diligence into the company. And very early doors, prior to making an investment here, I contacted Barry about them.
I think one of the things we need to be mindful of when comparing past mining endeavours (especially after several decades) with current day mining endeavours is the advancement of mining technology/knowledge. That isn’t to dismiss past issues, but to highlight that advancements have been made over time. Some former problems can be surmounted with modern day approaches.
The historical issues you have discussed were outlined by Barry in a Samso interview titled “An undervalued Copper Producer - Cyprium Metals Limited, 17 March 2022”.
To wit,
“When they (historical operators of the mine) started in the real oxide rather than the transitional - it’s like a clay and it compacted and they lost permeability, so it doesn’t leach - coz the fluid can’t get through. And they started with grades greater than 3% Cu and that’s why there is so much copper left. Over time, (the heaps go from 1-7), they got better and better at it. On heap 1, they picked it up and retreated already and put it on top. It improved, but because of all sorts of reasons it didn’t improve to the level we’ve got it now - because as you know - technology changes and knowledge changes. We’ve now got this mix - if we have new ore - oxide/transitional - we can recover up to 95% of the copper. If you look at the historical heap leach, 70% on average has already been taken out - so there is only 30% left - of which you can get 20-25% - which is an 85% recovery. When we look at the new oxide, we can get 90% plus. In this study, we put 90%, we can potentially get 95% - but I don’t think we will get there, so 90% is good. Heap leach retreat we can do because times change, technology changed, and you can work on the mistakes that were made in the past. And you can get your new ore out of the pit and do a much better job on it. It’s all about the ability to leach the copper mineral out of the heap leaches with the right particle size, the right agglomeration and the right regent mix”.
In the Cyprium Restart Study Presentation, a point was made as follows: "Historic unrecoverable copper component has been disproved. Only occluded minerals within the particle size are not recovered".
On environmental issues (from the same Samso interview), Barry said the following:
“Nifty - in terms of its environmental - hasn’t been handled very well. There is some misinformation around the type of material that is there. There’s acid producing material - which generally goes on the heap leach and we extract the copper from and the acid goes out of it. But, generally the carbonates are an acid consumer and when you have a look at the tailings dam and waste dumps - there is one area we have seen off a ROM pad where there is a bit of an acid issue. But, it's off a ROM pad - where the sulphide has been stored - but on the rest there is no AMD at all over 20-30 years - and that’s because it is benign and what we are seeing - if the acid level starts to rise from any point - the carbonates absorb the acid - they acid consume. Which is always a problem with the metallurgy at Nifty - the acid consumption. And we are seeing benign material that is in fact alkaline. And funnily enough the byproduct of that acid/alkaline reaction is magnesium sulfate - which is fertiliser - Epson salts - which you put in your bath”.
I'd like to believe that 1/ this team were well aware of all the risks and challenges posed by Nifty prior to its acquisition 2/ they have the skills/competencies/experience necessary to surmount said challenges.
The best way to view Cyprium's approach is to think in terms of two phases. Phase 1 - retreat of existing oxide heaps & Phase 2 - the sulphides (years away). Barry made the point in the interview that "Cyprium’s IP is on sulphide heap leach. Oxide heap leaching is easier to manage. The latter is more about agglomeration and regents and sulphide heap leaching is about temperature, air, bugs, acid and other regents, etc (more complicated). Chalcopyrite is much harder to leach - it leaches much more slowly. The heap leach now has no chalcopyrite in it - it is an oxide transitional - basically a malachite, azurite leach - as well as chalcocite, coverlite and even some carrollite (copper/cobalt)".
My view (based on what little I know about this type of mining op) is that the initial few years of retreating the oxides will be relatively easy to manage, but that complexities will increase once they move into the sulphide portion of the orebody. Is that a fair assessment?
Just another point on the metallurgy. There was a discussion a while back between @Bison8 and @FreeflyerNZ (from memory) where they talked about the multiple columns Cyprium were running for reagent consumption rate optimisation. Barry has previously spoken about changing various parameters, etc. And apparently - Barry & Co reduced leaching times and improved recoveries during their stint with Finders. If they can replicate this at Nifty, we could see a reduction in opex and greater EBITDA margins. I seem to vaguely recall something about potentially reducing leaching times from 180 days to 90 days, but I would need to dig out my old notes and go back in time on HotCopper. Bison or FFNZ might want to jump in and add further context here.
“Any competent rocks found at Nifty in oxide form perform well and leach economically its just there isn't enough of this material available to blend out all the other rubbish material that is present”. Can you provide some evidence to back up this claim that there isn’t enough competent material at Nifty? Thanks in advance.
Not referring to you here, but I think people forget just how large this orebody is. Despite being mined for so long, the orebody remains open at depth and there is opportunity for expansion. Barry mentioned this when discussing one of their drill campaigns conducted prior to the release of the Restart Study. "One intersection threw up +10m at greater than 2.5% Cu in a zone that hasn’t been drilled properly. There is opportunity for expansion. The material you are drilling is already in the pit shell. Before that intersection, that material would be mined as waste. Now, we get an intersection that gets mined as ore. So, the pit becomes more profitable. The waste ton becomes an ore ton. And the ore ton goes to the heap leach pad".
Good point re: breakdown of ore types and recoveries against each ore type.
Thanks again and I hope that you will contribute more to these threads.
p.s. I can see that @eastwest101 has kindly replied to my earlier post since starting this reply. I will get back to you shortly. Cheers.
