Kalongwe Copper-Cobalt Project (DRC)

“…Kalongwe is a significant high-grade oxide Cu-Co near surface resource which has potential to be developed into a near term – low CAPEX low OPEX mining operation…”

The Kalongwe deposit is an outcropping high-grade copper cobalt deposit located within the western extent of the Central African Copperbelt in the Democratic Republic of the Congo (DRC) (Figure 1).

Figure 1 – Kalongwe Copper-Cobalt Project Location

The Kalongwe Copper Cobalt Project (Kalongwe or the Project) is owned by Kalongwe Mining SA (KMSA) under a joint venture agreement between Nzuri Copper Limited (Nzuri) (85%), La Generale Industrielle et Commerciale au Congo (GICC) (10%) and the Democratic Republic of the Congo Government (5%). GICC is a Congolese company which is 90%-owned by Theo Mahuku, a respected Congolese businessman.

In March 2015, KMSA filed an application for the conversion of the Exploration Permit to an Exploitation Permit based on a technical study and an approved environmental/social assessment (EIE). Ministerial approval was received in October 2015 with an initial term of 30 years and renewal periods of 15 years.

The Kalongwe deposit is situated within an Exploitation Permit which covers an area of ~8km² and includes the entire area proposed for mining and Project infrastructure. This permit allows for mining and processing on site and for the transport and sale of copper / cobalt concentrate product.

Nzuri has successfully completed an updated +15% accuracy Feasibility study (FS) in April of 2018 further reinforcing the technical and financial viability of the Project from the previous October 2017 FS.

Updated Project FS highlights include:-

  • Updated Ore Reserve of 7.99Mt at 2.94% Cu and 0.34% Co for 234,868t of contained Cu and 27,102t of contained Co. All production targets and forecast financial outcomes underpinned 100% by Ore Reserves.
  • Kalongwe Stage 1 (“K1”) comprises an open pit mine and on-site 1Mtpa Dense Media Separation (DMS) processing plant:

  • Project fully-permitted with 12-month timeline to production post-funding and Board approval.
  • Significant opportunities to improve project economics and mine life through future staged project expansions, including leaching solutions for stockpiled cobalt-only ore/ mineralised rejects from the DMS plant plus improved product pricing terms at offtake finalisation.
Next Steps
  • Progress off-take and funding negotiations and advance project towards development.
  • Pursue the further options available to unlock the broader value of the project

Kalongwe -Mineral Resources

(Forming the basis for conversion to Ore Reserves)

The Kalongwe Mineral Resource Estimate is based on data obtained from 98 historical and recent diamond drill-holes (16,471 m) drilled across the deposit footprint. A total of 46 diamond holes (6,016 m) were drilled in 2014, including four diamond holes twinning selected historical holes. Drill holes are located on a nominal 50 m x 50 m grid, and in places 25 m x 50 m grid. Drill holes are vertical or inclined across the dip of mineralisation.

CSA Global, who completed the resource estimate, accepted the quality of the historical drilling results for inclusion in the current Mineral Resource Estimate, which is set out in Table 1 below:

Table 1: Kalongwe Mineral Resource EstimateScientific or technical information above that relates to the Mineral Resource estimate for the Kalongwe Project was first released by the Company in its ASX announcement entitled ‘Upgraded JORC Resource at Kalongwe 302,000t Copper and 42,700t Cobalt’ dated 5 February 2015. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and that all the material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.

Kalongwe – Mining Factors / Ore Reserves

(Inclusive of cut-off parameters)

The updated Ore Reserve estimate for Kalongwe is set out below :

Table 2: Ore Reserve

Scientific or technical information above relating to the updated Kalongwe Cu-Co Deposit reserve estimate was released by the Company in its ASX announcement entitled ‘Updated Stage 1 Feasibility Study Delivers Significantly Enhanced Financial Returns’ dated 16th April 2018. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and that all the material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.

The proposed mining method at Kalongwe is envisaged as conventional open pit mining. Mine operations will utilise conventional drill-and-blast, truck-and-shovel open pit mining methods and technologies proven at other locations throughout the region. All these activities will be managed and undertaken by Nzuri.

A revised mining block model was generated from the resource model provided by CSA Global by allocating appropriate dilution and ore loss. The WHITTLE™ software tool was utilised by Orelogy to undertake the open pit optimisation. Only materials classified as Measured or Indicated in the resource model could report as ore, with all other materials reporting as waste.

Material from the cobalt-only enriched zone reports as waste but are to be stockpiled separately for potential future processing. The revised Life of Mine (LOM) schedule was developed in monthly increments to allow for a detailed assessment of the ore presentation and potential uranium blending requirements.

The aim of the scheduling activity was to generate a practical, realistically achievable schedule that maximises project value within the given process plant ore feed targets. Mine scheduling was undertaken with the Maptek Evolution software.

Table 3: Kalongwe Mining Schedule by Reserve Category

Kalongwe – Processing

(Including metallurgical factors and assumptions)

Metallurgical testwork and analyses have been completed to assess the performance of the Kalongwe mineralisation in the production of a concentrate that will be sold to customers. Testwork was conducted in two stages with representative ore samples selected from purpose-developed drill holes.

The testwork programs included head grade analysis, comminution testing, mineralogy, size distribution analysis, heavy liquid separation and analysis and leach test work. Based on the overall results achieved, a DMS concentrate grade of 15% copper, a Spiral concentrate grade of 4-8% and accompanying life-of-mine copper recoveries have been used in the process design.

The treatment plant design incorporates the following unit process operations:

  • Primary crushing
  • A live surge bin with a dead stockpile
  • Scrubber and secondary crushing
  • Dense media separation via two single-stage modules
  • De-sliming of scrubber wet screen undersize to produce a mineralised ‘sands’ product that is further treated via a spirals circuit to produce a spirals concentrate product;
  • DMS mineralised coarse reject stream conveyed and stacked in waste storage area;
  • DMS and spiral concentrate product bagging station; and
  • Tailings thickening prior to pumping to the tailings storage facility (TSF).

Process flow – block diagram

The process flowsheet incorporates tried and proven technology and includes equipment from reputable suppliers. The decoupling of the crushing circuit from the DMS plants will result in higher overall plant availability, as well as providing operation flexibility regarding the crushing circuit.

Kalongwe – Environmental

An Environmental and Social Impact Assessment for the Kalongwe Project, which in the DRC is termed Etudes D’impact Environnemental (EIE), was completed in 2014 by Bureau d’Etudes Environnementales du Congo. It aimed at identifying the baseline environmental and social conditions, and determining management of the proposed Project’s social and environmental impacts through an Environmental and Social Management Plan, which in the DRC is termed Plan de Gestion Environnementale du Projet (PGEP). The EIE was approved by the DRC Government in April 2015.

Additional works as part of the FS were also completed in the first half of 2017. These works focused on an assessment of cultural heritage issues, water, air and soil, and social and environmental assessment work associated with the site access corridor.

Kalongwe – Infrastructure

Infrastructure and services required for the development of the Kalongwe Project include:

  • Access and site roads;
  • Power station and liquid fuel storage;
  • Buildings and storage facilities;
  • Communications and information technology;
  • Water storage dam and diversion channel; and
  • Mine de-watering borefield.

Figure 2 – Kalongwe Copper-Cobalt Project Site Layout

Kalongwe – Capital Cost Estimate

The capital cost estimate was compiled by Lycopodium with input from Knight Piesold on water infrastructure and the tailings storage facility, Nzuri on project infrastructure, village, mining and Owners (KMSA) costs. The total project build capital is US$53.12M (exc. working capital allowance).

Table 4: Kalongwe Capital Cost Breakdown

The estimate is expressed in US dollars based on prices and market conditions current at first quarter 2017 (3Q17). The following exchange rates have been used:

  • US$1.00 = R14.7 ZAR (South African Rand).
  • US$1.00 = A$1.33 (Australian Dollar).
  • US$1.00 = €0.95 EUR (Euro). 

Kalongwe – Operating Costs

Operating costs have been built up into the following cost centres:

  • Mining
  • Processing
  • General and Administration
  • Services and Utilities
  • Environmental and Community

Mining costs have been calculated by mining consultants Orelogy. Processing, administration, services and utilities costs have been prepared by Lycopodium. Environmental and community costs are per the approved Kalongwe EIE.

Kalongwe – Implementation Schedule

An Engineering and Procurement (EP), as opposed to a more traditional Engineering Procurement Construction Management (EPCM), approach is to be adopted for Project execution. Responsibility for the execution and delivery of the various scope elements will be divided between the EP contractor and the Owner’s team. Close management by the owner of Project execution risks will be undertaken to avoid cost increases and schedule delays.

A high-level project development schedule has been developed for the project execution and assumes a late wet season early dry season commencement date and indicates a completion date for initial commissioning sign-off within 12 months on this basis. The schedule is high-level at this stage and will require further detailing as a part of the development of the Project Development Plan prior to commencement.

Kalongwe – Next Steps

The company is currently: –

  • Progressing off-take and funding negotiations and advance project towards development.
  • Pursuing further options available to unlock the broader value of the project