Historically the Nifty mine from the 90's to 2005 was mining an oxide ore via open pit. This oxide ore was then heap leached. The solution from the heap leach was then run through the SX/EW plant to create a copper cathode/plate.
After 2005/2006 the open pit operation stopped. The concentrator was built for the sulphide ore and the underground mine was started.
Up until Nov 2019 Metals X had been accessing the sulphide ore via an underground mine. They then put this ore through the concentrator and sold a copper concentrate. Metals X have not operated the SX/EW plant. They also have not touched the old heap leach ore. Metals X were not getting good operating performance from the mine. Seems like they were losing somewhere in the order of $20M a quarter...... Reading the old Metals announcements it seems like all of the issues they were experiencing were to do with the underground mine and not being able to get enough ore out. Seems like they could never get there development far enough head or build up any sort of mined stockpile. This meant if there was ever any small problem in the mine then production would drop and $/lb would increase.
In Nov 2019 Metals X put the mine on care and maintenance while they considered their options. The scoping study was done that found it would be better to go back to an open pit. The scoping studies plan was to enlarge the pit so they could go deeper and access the sulphide ore via open pit now rather than underground. The study also found that while enlarging the pit they would be mining more Oxide ore. The scoping study recommended:
- refurbishing the SX/EW plant (at a reduced through put of 5000-6000 tons down from 25000 of copper cathode pa),
- restarting the heap leach using the partially leached ore currently on the heap lead pads,
- then heap leaching the new oxide ore.
- restarting the concentrator once the sulphide ore was getting mined (via open pit)
This gave them roughly 8 years of heap leaching producing 5000-6250 tons of copper plate a year and about 10 years of concentrate production producing 25kt-27kt of copper concentrate. per year.
The scoping study had the budget cost of this plan between $50M-$70M. My guess is the metal X board and shareholders were not keen on spending more money on this mine that had been losing them so much money. So the opted to sell it.
This gives CYM a good opportunity now to buy these assets at a bargain price.
Apart from the interview Barry did, I have not seen anything official regarding CYM's plans for the mine. But from the sounds of things their plan is similar to the scoping study:
- They want to refurb the SX/EW plant but sounds like to 20kt PA output capacity
- They want to start releaching the partially extracted historic ore sitting on the heap leach pads
- They want to change the mine to got back to open pit, mine the new oxide ore and then access the sulphide ore
- Sounds like they are going to try and Heap Leach the sulphide ore. My knowledge on this must be out of date. I had thought sulphide ores generally didn't work with heap leaching. But I did a little research and there appears to now be some examples of it. So I think they will try and H/L the sulphide ore and if that doesn't work then the back up is restart the concentrator for the sulphide ores.
- So sounds like their aim is to be selling 20kt of copper plate/cathode per year.
So they have some work ahead of them to finalise their plans. They will need to do some test work on the sulphide ore, and existing heaped ore. Confirm it makes sense to refurb the SX/EW plant. Finalise the open pit mine plan, probably need to do some more drilling.
They do look very interesting though. I will keep watching them until the cap raise is complete.
(20min delay)
