Khoemacau copper-silver project is a high-grade project being developed in Botswana, Africa. Khoemacau Copper Mining, a subsidiary of Cupric Canyon, is developing the project, which was acquired along with the nearby Boseto licenses and complex in 2015.Estimated to cost $397m to construct, the project is expected to produce 62,000 tonnes (t) of copper and 1.9 million ounces (Moz) of silver in the initial stages.
An expansion plan is proposed for Khoemacau, which will include the construction of a new 5.8Mtpa processing facility near Zone 5. It is expected to produce approximately 100,000t of copper a year additionally.
Khoemacau copper-silver project geology and mineralization
Khoemacau copper-silver project is a 4,040 square kilometer (km²) mineral concession located in north-west Botswana. Zone 5 is the prominent deposit among the several deposits within the Khoemacau project and hosts some of the most significant high-grade copper mineralization deposits such as Khoemacau and Boseto.The project is located in the Kalahari Copper Belt (KCB), which is a northeast-southwest stretching long belt. Stretching from northern Botswana to Namibia, KCB is located along the north-western edge of Kalahari Craton and hosts Ghanzi and Tsumis Group metasedimentary rocks.
The proven and probable mineral reserves of the Khoemacau mine are estimated to be 30.4 million tonnes (Mt), grading 2.03% copper and 19.5% silver.The measured indicated and inferred mineral resources of the project are estimated to be 91.7Mt.
Mining ore processing at Khoemacau copper-silver project
Conventional sub-level long hole open stoping (LHOS) mining method will be applied at the Khoemacau copper-silver project.The mine plan includes the development of the Zone 5 orebody as three separate underground mines, each with an average production capacity between 1 and 1.5 million tonnes per annum (Mtpa) for the first five years. All the mines will have independent ramp access and operate over a strike length of approximately 1,000m.
Run-of-mine (ROM) ore will be hauled by trucks to the Boseto processing facility, which is located approximately 35km from Zone 5. The processing facility was acquired as part of the acquisition of Boseto assets in 2015.
Khoemacau ore will be processed by conventional sulphide flotation method to produce approximately 40% copper concentrate.Ore will be crushed in three stages to obtain a desired size, before screening and ball milling. It will then be passed to the rougher flotation and scavenger stage, where tailings will be pumped to the tailings thickener and the rougher concentrate forwarded to the regrind mill.]
Concentrate from the scavenger and the regrind mill product will undergo two stages of cleaning, following which it will be taken through the concentrate filter and moved to the concentrate stockpile.The final concentrates will be bagged and hauled by trucks to the port for shipping to African and international smelters
.Financing and offtake from Khoemacau
Cupric Canyon secured a project funding of $565m for developing the Khoemacau project, in February 2019. The funding includes a senior debt facility of $275m from Red Kite Mine Finance (RKMF), and $265m silver stream and a $25m subordinated debt facility from RGLD Gold. RGLD Gold will offtake 80% of payable silver production in return for the $212m funding and also eligible to receive an additional 20% of the payable silver if it elects to use the $53m option. RKMF previously provided a term loan facility of $50m in February 2017 for the project development.
Power supply for the project will be provided by the Botswana Power Corporation grid through a 56km overhead transmission line. Existing diesel generation capacity at the Boseto plant will be used as back-up.Water for the mining activities will be collected from three bore fields along with dewatering boreholes available at Zone 5.
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Ash here.
SFR looks a natural owner of Khoemacau with very useful synergies. Cupric Canyon is allegedly seeking $1.5b for Khoemacau, which sounds a little high to me.
We shall see.
Ash
SFR Price at posting:
$6.06 Sentiment: Buy Disclosure: Held
(20min delay)