sulphide versus oxide, page-6

I find this Research absolutely fascinating, and I hope a few others do too.

It takes quite some time to do, and share.

I do not mean for it to be tedious and dogmatic, and apologise for that if it seems so. But I try and take it down the path to at least some useful conclusion to make it logically reasoned, based on fact and worth following....... rather than emotive.

Whilst I have enormous respect for AVB Management, I do not let their credentials overwhelm me to the point where whatever they say is gospel. Other may choose to differ in that regard, and I certainly respect that attitude.

If you went to the AGM and were told a smelter deal was imminent, and that plant construction would commence (possibly) in June and accepted that, you could be forgiven for being a touch bitter about paying what you did for an airfare.

Anyway.....

The main deposit at AN is sulphide. The annual report presentation details 183,000t Cu as a total resource and 169,000t as sulphide, so presumably there is only 14,000t of shallow oxide. That is 6%.

However at AS for a total copper resource of 85,000t, only 33,500t is sulphide, giving the balance as 51,500t oxide or 60%.

From the following AS reference :

http://www.avancoresources.com/pdfs/ExceptionallyHighGradeCopperRioVerdeProject21Sep10.pdf

"Avanco now believes that intersections containing +25% copper are associated with the presence of abundant chalcocite mineralisation (Cu2S) and represents a classical supergene enriched transition structure hosting both sulphide and oxide copper mineralisation. "

and also, significantly,

"...underscores the high value of the exceptionally high grade, shallow and easily exploitable nature of the deposit."

"Any direct ship concept offers the advantages of short revenue lead times with low pre production capital and minimal accompanying technical and commercial risks"

"The direct-ship component of Antas South resource has been delineated to extend from surface to more than 30m depth and is open on strike. Open cut mining will be largely free digging with a minimal pre-strip requirement. "

Noteworthy is the fact that the Direct-ship component is Open On Strike. That it extends from surface!! minimum pre-strip.

Thus there is strong potential for the AVB-detailed $20m DSO profit achievable in 18months to be upgraded. To what? $30m in 2 years, $40m in 2.5years? It is Open on Strike and is fabulously rich and requires no processing.

OK setting aside the DSO.....the HG material is all shallow and easily exploitable... To get the Trial Mining Licence, agreement needs to have been reached with the Antas South farmer and he is happy, so no doubt his expectations were fanned up. And now?

One interpretation is that the DSO will contain chalcocite, the bonanza material and a sulphide. So if that is removed then what is left is almost entirely oxide.

So the question is how will this oxide respond to being

Q1. put through the new flotation plant by itself or
Q2. put through in a blend of sulphide and oxide.

A1. Flotation studies done on this oxide 14th January 2010 indicate "+75% copper recovery into saleable concentrates demonstrated and with optimisation metallurgical performance is expected to improve".

A2. As per previous post, there is a suggestion that by using the appropriate method (typically n-octyl hydroxamate in the stereochemical form of AM28 collector) Sulphides and oxides in a mix or blend can be processed with no appreciable reduction in Copper recovery from the sulphide ore. (97% to 95.5%) This is a useful technical advance proved at plant level.


Conclusion :

1. Whilst oxide is not plentiful at AN, there is a lot at AS. In fact it is considered High Grade and forms the very dominant part of the HGZ.

2. As per previous post, the DSO profit indicates $20m for 18months easy work.

3. The DSO is in fact Open On Strike. Something I have previously missed.

4. The DSO extends from surface to 30m . How easy is that!! (high-5's) alright!!

5. While Copper recovery from Oxide is 75% as compared to Sulphide 97%, it needs to be processed, and current technology suggests it is feasible, as a stand-alone or in a blend. Metallugical tests of 2010 prove it.

6. In terms of providing future direction for AVB, AS appears to hold several advantages.

Firstly you are a Producer. Immediately. A SP re-rate? NO grovelling for funding, just dig baby, dig! You can stockpile oxide ore for immediate use when your plant is built. Sure it is not sulphide, but it is ready to go at least, and make money.

Any Feasibility Study should look at the option of inclusion of AS at least. I do have a concern that management may have the view that with all that will (eventually) be going on at AN, it is all too hard to have AS going in parallel. It is a real concern and a strong suspicion I have..

So that I trust all adds a bit more information and thinking into our common pool here of knowledge and thoughts :))