Update on Copper Bay Investment
24 June 2015
CENTRAL ASIA METALS PLC
("CAML" or the "Company")
Update on Copper Bay Investment
Central Asia Metals plc (AIM: CAML), the owner and operator of the successful Kounrad copper cathode producing facility in Kazakhstan, today announces that it is exercising its right to invest a further US$3 million to increase its shareholding in Copper Bay Limited ("Copper Bay") to 75%. This investment is being made following the completion of an internal pre-feasibility study ("PFS") on the Chañaral Bay Copper Tailings Project, 100% owned by Copper Bay, which lies approximately 1,000km north of Santiago, Chile (the "Project").
The funds will be used to conduct a definitive feasibility study on the Project, which aims to exploit tailings deposited onto the beach and into the bay at Chañaral by the Potrerillos and Salvador Copper mines between 1938 - 1975.
Chañaral Bay Pre-feasibility Study Results
The recently completed PFS encompasses all major aspects of the Project and was compiled by Copper Bay using independent consultants for certain aspects of the study's constituent parts.
As part of the PFS a drilling campaign of 1,246 holes with an average depth of 9.2m was conducted on the beach. The results from this drilling together with historical drill data from the beach were used to estimate a mineral resource statement. This was prepared in accordance with the JORC Code (2012) guidelines by Wardell Armstrong International as tabulated below:
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Chañaral Beach Tailings Mineral Resource Estimate (JORC 2012) (Including 50m wide berm) Wardell Armstrong International - December 2014 |
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|
Cut-Off Grade (CuTotal %) |
Classification |
Volume (m3) |
Tonnage (kt) |
CuTotal (%) |
Cu (t) |
|
0.1 |
Indicated |
28,475,763 |
42,714 |
0.244 |
104,345 |
|
Inferred |
5,645,741 |
8,469 |
0.234 |
19,838 |
|
Much of the inferred resource will be utilised as a berm to protect the resource area from sea ingress during dredging operations. This resource will then be reclaimed on completion of the dredging operations.
The above resource only covers the Chañaral beach area and there is potential upside at Chañaral to significantly increase this resource through the future inclusion of a similar amount of additional mineralised material in the surf and bay zones covered by existing licences held by Copper Bay.
Metallurgical test work indicates that the most effective means of extracting the copper from the tailings is by initial acid leach to produce a copper cathode product followed by froth flotation of the leach tails to produce a clean copper concentrate. Indicative metallurgical recovery from the PFS test work is 72.8%.
Dredged material will be fed to the plant and will result in annual copper production of 8,600 tonnes, comprising 6,200tpa cathode and 2,400tpa copper in concentrate. The reported resource in the beach area would be sufficient for a mine life of 9 years. The PFS envisages fine tailings being stored in a tailings management facility located 3km from the proposed site of the processing plant and coarse tailings re-deposited on the beach.
Environmental and social baseline studies commenced over 12 months ago and will continue throughout the next 18 months. The Chañaral area is well known in Chile for the adverse environmental impact caused by the historical deposition of tailings into the bay and beach zone and, due to the reclamation of these tailings the Project is strongly supported by the local community and also at national level.
Project economics are based on the mineral resources estimated on the beach and do not consider the material that may be identified in the surf and bay zone, and a preliminary capital expenditure estimate of US$88 million. Estimated C1 cash costs of operation are US$1.34/lb with a project NPV at 8% discount rate of approximately US$50 million after tax, with an IRR of 21% based on a long term copper price of US$3/lb. Future exploitation of the surf and bay zones may provide significant economic upside to the Project.
Nick Clarke, Chief Executive Officer commented:
" We are pleased to announce this further investment into Copper Bay on the basis of the results of the PFS. This investment represents CAML's first step towards generating a robust project pipeline which gives the Company the opportunity to grow and to build upon our success at Kounrad. Moreover, this investment reinforces our presence in an attractive copper mining district where we will continue to focus on business development opportunities. We will be seeking opportunities to optimise the Project over the course of the feasibility study and are encouraged by the upside for resource development in the surf and bay zones."
For further information contact:
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Central Asia Metals plc |
Tel: +44 (0) 20 7898 9001 |
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Nick Clarke, CEO Nigel Robinson, CFO |
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Peel Hunt LLP (Nominated Adviser & Joint Broker) |
Tel: +44 (0) 20 7418 8900 |
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Matthew Armitt Ross Allister |
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Mirabaud Securities LLP (Joint Broker) |
Tel: +44 (0) 20 7878 3362 |
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Peter Krens |
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Bell Pottinger |
Tel: +44 (0) 20 3772 2500 |
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Lorna Cobbett |
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The information in this announcement that relates to the JORC compliant resource has been compiled by Wardell Armstrong International. Nick Clarke (CAML CEO), a qualified Chartered Engineer and member of the Institute of Materials, Minerals and Mining (MIMMM), has reviewed this announcement and agrees to the inclusion in the announcement of the matters based on the information in the form and context in which it appears.
Note to editors:
Central Asia Metals, an AIM-listed UK company based in London, owns 100% of the Kounrad SX-EW copper facility in Kazakhstan. The Company is investing a further US$3 million into Copper Bay Limited in order to increase its ownership to 75%. Copper Bay Limited is a private company that has just completed a pre-feasibility study of the Chañaral Bay Copper Project in Chile. At the 2014 UK Stock Market Awards, the Company was named Best Basic Resources Plc. For further information, please visit www.centralasiametals.com.
This information is provided by RNS
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