"A decision by China's Wanbao on HAV's flagship Kalkaroo is just over 4 months away, at most. This should give the SP the long-awaited rocket it needs.
As long as the decision is positive!"
PeterPlus,
Wanbao wants a presence in Australia. So a deal for Kalkaroo will get done, eventually.
As I have said before, while a seller (Havilah) will always prefer that a purchase price be paid as a lump sum, applying an element of deferred consideration can be considered as a way to balance interests of the sellers and buyers (Wanbao), particularly where there has been such a significant upgrade in the resource (as there has been at Kalkaroo).
Approximately 20% of the purchase price could be placed in an escrow account, to cover this deferred consideration, to be settled on the updated JORC milestone being reached.
Remember, it was Wanbao that approached Havilah. Wanbao's interest followed Havilah's upgrading of the resource at Kalkaroo, making it one of the largest undeveloped copper-gold deposits in Australia.
My remaining reasons, as listed in my post from 7 September 2017 (below), apply equally to Wanbao:
https://hotcopper.com.au/threads/up...egy.3653484/page-7?get_post=true#.Wbs54a2B1Zo
In fact, I will add Reasons
11 and
12 to that list. The fact that HAV owns the Kalkaroo Pastoral Lease (so it does not have to worry about 'lock the gate' protestors) and the proposed mine's remoteness (doesn't have to worry about 'villagers' as it does in Burma) IMLTHO are huge positive selling points to Wanbao for investing in Kalkaroo.
Another Overseas Party (watching from the sidelines)
As I have said before, in my limited discussions with Dr Giles, Native Title Issues and power uncertainty were the big issues for another potential Kalkaroo joint venture partner who missed out to Wanbao.
That particular overseas party is 'monitoring' Kalkaroo from the sidelines, particularly given NTA has now been resolved (just waiting on the paperwork to be finalised, in the short-term) which is the final piece of the puzzle needed for a Mining Lease to be issued for the Kalkaroo mine.
'
Bacterial Leaching Technology
I had said in Reason 8 (from my post of 7 September 2017) that: the updated Kalkaroo JORC resource is based on a 0.4% copper equivalent lower cut-off grade. At a 0.2% copper equivalent lower cut-off grade, the JORC resource tonnage is more than doubled meaning more copper-gold.
This is demonstrated on the graph below, which comes from page 7 of Havilah's 29 March 2017 ASX announcement:
View attachment 731310
Grade –Tonnage classification for the total Kalkaroo copper-gold resource showing the dramatic increase in total resource tonnage with decreasing copper equivalent cut-off grade.
The current resource is based on a 0.4% copper equivalent lower cut-off grade. At a 0.2% copper equivalent lower cut-off grade, the resource tonnage is more than doubled.
Note: the scale on the lower axis and right axis of the above graph should read 'ppm Cu'. However, I find it easier to say 0.2%, 0.4% 'copper equivalent lower cut-off grade' rather than 2,000 4,000 ppm Cu on the bottom axis.
Based on conventional copper recovery techniques, you could say that is a lot of ore in the sub-economic 0.3-0.4% Cu range. And you would be right if using conventional copper recovery techniques at Kalkaroo.
But you would be missing the fact that Wanbao has successfully developed and applied a proprietary bacterial copper leaching technology.
Wanbao
can and
should apply its proprietary bacterial copper leaching technology at Kalkaroo to recover copper at a 0.3% or a 0.2% copper equivalent lower cut-off grade.
Assuming 100% recovery, the following would be the copper equivalent tonnes from Kalkaroo using the various equivalent lower cut-off grades:
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
| 1 |
Tonnes |
ppm Cu |
Cu equivalent lower cut-off grade |
Copper (tonnes) equivalent |
| 2 |
168,620,510 |
9,252 |
0.5% |
1,560,076,959 |
| 3 |
232,491,324 |
7,936 |
0.4% |
1,845,051,147 |
| 4 |
320,816,572 |
6,706 |
0.3% |
2,151,395,932 |
| 5 |
472,374,934 |
5,344 |
0.2% |
2,524,371,647 |
The following is an article on bacterial leaching, amongst the conventional copper recovery techniques:
https://www.copper.org/publications/newsletters/innovations/2001/08/hydrometallurgy.html
Cheers
These are only my random thoughts (plus at least 12 reasons to be cheerful ) and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional expert
(20min delay)