Positive Results for Kipoi De-Bottlenecking Study
- Reserve-backed life of mine (LOM) of +16 years at 32,500tpa rate
- Low risk debottlenecking project
- Average LOM cash operating costs of US$1.27/lb at 32,500tpa
- Capital cost of <$25 million
- High return 107% IRR and 10 month project payback
- Detailed engineering and design commenced with investment decision targeted in 4Q15
The study focused on potential modifications to utilise the identified latent capacity of the SXEW processing train at Kipoi and was completed by Tiger with assistance of independent consultants, Cube Consulting and Worley Parsons.
The study confirms the potential for a high return, low capital cost debottlenecking of the Kipoi SXEW train. The debottlenecking project has a forecast IRR of 107% and a payback period of 10 months at a copper price of $3.00/lb.
The debottlenecking works are expected to be completed within an eight-month period including detailed design, procurement and construction. Thus a commencement of works in 4Q15 would see completion during 3Q16.
Reserves and mining
The study utilised the existing Kipoi JORC reserve of 50.5mt grading 1.4% copper for 689kt copper. The heap leach feed schedule was optimised to provide sufficient recoverable copper to sustain
production at 25ktpa, ramping up to 32.5ktpa in late 2016. The optimisation assumes the resumption of mining in 3Q16. The production schedule is based solely on Kipoi Central ore feed up to 2028, with ore in later years sourced from Kipoi North and Kileba.
The mining schedule assumes the utilisation of conventional open pit mining methods with a LOM strip ratio of 2.1:1 and average copper grade of 1.4%.
Following exhaustion of above ground ROM stockpiles and HMS floats, ROM ore will be delivered to a two-stage crushing circuit. The circuit will be designed with a capacity of 4.5mtpa and reduce 1000mm ROM to 25mm which will then be fed onto the heaps.
The tank leach will process slurry from the HMS fines or fines generated run of mine. The resultant pregnant leach solution (PLS) will then be pumped to the SXEW plant. The modular tank leach design incorporates a scalable modular plant that can easily be expanded as the tank leach throughput requirement increases.
Increased solvent extraction capacity can be achieved by elevating the PLS grade and increasing the extractant concentration to facilitate the transfer of copper cathode. These minor operational changes will not require any capital works and can be achieved with existing infrastructure.
The electrowinning circuit currently includes a power rectifier with a design rating of 40kA. With minor site modification, this is expected to provide sufficient power for installation of an additional 14 electrowinning cells. These will be accommodated in two extra bays to be installed in the existing tank house.
The estimated power requirement for 32,500tpa cathode production is 10MW, which is a 1MW increase on the power draw for the current production rate of 25,000tpa. As Tiger has previously advised, the transition to grid power commenced in 2Q 2015 and Kipoi expects to commence sourcing majority grid power during 2H 2015. However, the diesel power station on site is capable of delivering up to 12MW and provides a backup to grid power.
The study indicates a capital cost estimate of $25 million (including contingency) and includes:
- Expansion of the electrowinning facility by adding an extra 14 cells ($4.4 million); and
- Modular tank leach plant and reclaim system ($15.3 million)
The estimates are based on prices received for similar installations within the last 24 months and knowledge of current equipment prices, delivery lead times and construction and installation rates. Final pricing for the electrowinning expansion and tank leach plant is expected before the end of August 2015, whilst final pricing for the crushing circuit is expected in September 2015.
The average LOM cash operating costs under the 32,500tpa SXEW configuration are expected to be US$1.27/lb.
- Preliminary mining tenders indicate mining costs of US$0.39/lb Cu produced
- Processing costs are expected to vary depending on the types of ore. The lowest cost of $0.38/lb Cu produced occurs when treating the low acid consuming, high recovery Kipoi Central ore which forms the majority of ROM material to be treated. The LOM average processing cost is US$0.45/lb Cu produced based on a 90:10 grid:diesel power supply.
- General and administration costs are largely fixed and based on the 2015 budget costs are forecast to be US$0.23/lb Cu produced at a 32,5000tpa production rate.
- Selling and export clearing costs are expected to be consistent with 2015 guidance levels of US$0.18/lb Cu produced.
- LOM inventory adjustment for the significant stockpiles of ore is forecast to be US$0.02/lb Cu produced.
All references in this report to $ are to US$, unless otherwise stated.
About Tiger Resources Limited
Tiger Resources Limited (ASX:TGS) has established itself as a producing copper/cobalt company with excellent growth potential after making the transition from an explorer. We have a highly-rated portfolio of properties, all strategically located on the world renowned Katanga Copperbelt in the Democratic Republic of the Congo (DRC), central Africa.
Tiger Resources Limited