First Quantum Minerals Ltd. (“First Quantum” or “the
Company”) (TSX:FM) today announced the filing of an
updated National Instrument 43-101 – Standards of Disclosure for
Mineral Projects (“NI 43-101”) Technical Report dated June 30,
2020 for the Kansanshi Operations located in the North West
Province, Zambia (the “Kansanshi Technical Report”). The updated
Kansanshi Technical Report is based on 1.5 million metres of
resource expansion drilling and resulting assay data to provide an
updated Mineral Reserve and Resource estimates showing an increase
of 70% and 40%, respectively, over Reserves and Resources reported
in the last update in May 2015, and extends the mine life to 24
years. This plan assumes a 25 million tonnes per annum (Mtpa)
expansion of the sulphide ore processing facility and associated
increase in mining capacity, increasing annual throughout to 52
Mtpa (the “S3 Expansion”). The timing of capital expenditure
for the S3 Expansion is proposed for 2023/24 and commissioning
envisaged in late 2024. This timing could be accelerated or delayed
depending on capital availability, commodity prices and the Zambian
fiscal regime. Mineral Resources at Kansanshi are now estimated at
939.6Mt at 0.67%TCu including Mineral Reserves, excluding
stockpiles of 842.7Mt at 0.64% TCu.
Reserves & Resources reported at June
2020 |
Previous Models |
Updated Models |
|
Million tonnes |
%TCu |
Million Tonnes |
%TCu |
Total Proven & Probable Mineral Reserves |
492.8 |
0.63 |
842.7 |
0.64 |
Total Measured & Indicated Mineral
Resources |
667.5 |
0.66 |
939.6 |
0.67 |
Kansanshi NI 43-101 Technical Report
Highlights
Since the filing of the previous technical
report with respect to the Kansanshi Operations in May 2015, the
Company has expanded drilling coverage across the Kansanshi
deposits, completing over 300 diamond drill holes and over 24,000
reverse circulation holes in four years. This has resulted in 1.5
million metres of drilling and assay data providing the basis of a
Mineral Resource update that will now underpin a potential
expansion and upgrade to the processing facilities at Kansanshi.
With the oxide and mixed ore plant feeds depleting, this drilling
focussed on increasing the sulphide resource inventory,
particularly from the South East Dome deposit, which is yet to be
mined. Closer drill hole spacing, improved geological
definition and subsequent modelling have enabled a significant
tonnage of previously Inferred Mineral Resource to be upgraded to
Measured and Indicated status. Overall, there is a 40%
increase of Measured and Indicated Mineral Resource relative to
that reported in May 2015. With this
re-classification, additional resource was able to be included
in mine optimisation and life of mine planning, partly leading to
an approximate 70% increase in the Mineral Reserve tonnes and
insitu copper metal. (see Tables 1 and 2 and for further
detail refer to the NI43-101 Kansanshi Operations June 30, 2020
available on SEDAR)
TABLE 1: Kansanshi Mineral Resources, inclusive
of Mineral Reserves, excluding stockpiles, at a 0.2% Total Copper
cut-off as at June 30 2020
|
Tonnes (millions) |
Density
(t/m3) |
Cu(%) |
ASCu(%) |
Au(g/t) |
Measured |
306.6 |
2.5 |
0.71 |
0.13 |
0.12 |
Indicated |
633 |
2.72 |
0.65 |
0.07 |
0.12 |
Total Measured & Indicated |
939.6 |
2.65 |
0.67 |
0.09 |
0.12 |
Inferred |
166.5 |
2.75 |
0.58 |
0.04 |
0.11 |
TABLE 2: Kansanshi Mineral Reserves and
additional Stockpile Reserves, at a 0.2% Total Copper cut-off as at
June 30, 2020
MINERAL RESERVE AT 30th JUNE 2020 (AT $3.00/lb Cu and
$1200/ounce Au) |
|
Class |
MTonnes |
TCu (%) |
ASCu (%) |
Au (g/t) |
TOTAL OXIDE ORE |
Proven |
54.1 |
0.86 |
0.46 |
0.13 |
|
Probable |
60.2 |
0.68 |
0.37 |
0.11 |
|
Total P+P |
114.2 |
0.76 |
0.41 |
0.12 |
TOTAL MIXED ORE |
Proven |
67.0 |
0.56 |
0.16 |
0.10 |
|
Probable |
71.9 |
0.56 |
0.15 |
0.08 |
|
Total P+P |
138.9 |
0.56 |
0.16 |
0.09 |
TOTAL SULPHIDE ORE |
Proven |
182.7 |
0.68 |
0.02 |
0.12 |
|
Probable |
406.8 |
0.62 |
0.02 |
0.12 |
|
Total P+P |
589.5 |
0.64 |
0.02 |
0.12 |
TOTAL |
Proven |
303.7 |
0.68 |
0.13 |
0.12 |
|
Probable |
538.9 |
0.62 |
0.07 |
0.11 |
|
Total P+P |
842.7 |
0.64 |
0.09 |
0.12 |
Additional Stockpile Reserves |
|
Class |
Mtonnes |
TCu (%) |
ASCu (%) |
Au (g/t) |
TOTAL |
Proven |
|
|
|
|
|
Probable |
128.1 |
0.46 |
0.12 |
|
|
Total P+P |
128.1 |
0.46 |
0.12 |
|
|
|
|
|
|
|
TOTAL including stockpiles |
Proved |
303.7 |
0.68 |
0.13 |
|
|
Probable |
667.0 |
0.58 |
0.08 |
|
|
Total P+P |
970.8 |
0.62 |
0.10 |
|
The Mineral Resource and subsequent Reserve
uplift form the foundation for the potential re-commencement and
completion of the S3 Expansion. This will increase the existing 28
Mtpa Kansanshi sulphide, mixed and leach ore processing facilities
to an overall capacity of 52 Mtpa. The S3 Expansion had been
previously approved and commenced but activities were halted in
2013 as a result of market conditions and a challenging fiscal
environment. The earthworks, foundations, steelworks and the
filtration facilities (currently operational) for the S3 Expansion
were completed prior to the cessation of activities.
Once internal approvals are granted,
construction could potentially re-commence in 2023 with completion
by late 2024. An estimated $408M of capital would be required for
this construction, inclusive of $25M for upgrades and enhancements
to existing processing facilities. The current scenario has the
majority of spending occurring between the second half of 2023 and
early 2025. The timing of the S3 Expansion could be advanced
or delayed depending on capital availability, commodity prices and
the Zambian fiscal regime.
The additional mining fleet required for the S3
Expansion is expected to be procured at an estimated cost of $242M,
to enable the annual mining volumes to increase from the current
annual rate of 50 million bank cubic metres (MBCM) to approximately
80 MBCM.
The total capital required for the S3 expansion
project is expected to be approximately $650M, to be spent over
approximately two years starting in the second half of 2023. This
expansion plan will continue to be further refined before project
approval is sought which is expected within the new two years.
In addition to the processing plant expansion
and upgrades, the Kansanshi smelter will be increased to 1.65 Mtpa
capacity during 2022/23, an increase from current performance level
of 1.38 Mtpa. Rather than constructing the originally
proposed second smelter, the capacity increase will be achieved
partly through enhancing copper concentrate grades by lowering the
carbon and pyrite content of the Kansanshi and Sentinel concentrate
feeds. Concentrate processing capacity will be further
expanded through modifications to the existing high pressure leach
(HPL) circuit. These expansion measures are sufficient to
accommodate the majority of the increased concentrate production
from both Kansanshi and Sentinel, with some excess concentrate to
be marketed to other Zambian smelters. An estimated $80M is
expected to be spent on the smelter expansion and an additional
$15M, on the concentrate cleaning and HPL plant modifications.
Qualified Persons
The Kansanshi Technical Report was prepared
under the direction and supervision of the following First Quantum
personnel who are Qualified Persons for the purposes of NI
43-101:David Gray (QP) BSc (Geology), MAusIMM, FAIG, Group Mine and
Resource Geologist, FQM (Australia) Pty LtdMichael Lawlor (QP) BEng
Hons (Mining), MEngSc, FAusIMM, Consultant Mining Engineer, FQM
(Australia) Pty LtdAndrew Briggs (QP) BSc (Eng), ARSM, FSAIMM,
Group Consultant Metallurgist, FQM (Australia) Pty Ltd
The scientific and technical information
regarding the Kansanshi Mineral Resource and Mineral Reserve
estimates set out in this news release has been reviewed and
approved by Michael Lawlor (QP) BEng Hons (Mining), MEngSc,
FAusIMM, Consultant Mining Engineer, FQM (Australia) Pty Ltd, who
is a Qualified Person as defined by NI 43-101.
For further information visit our website at
www.first-quantum.com
North American contact: Lisa Doddridge, Director,
Investor Relations Tel: (416) 361-6400 Toll-free: 1 (888) 688-6577
United Kingdom contact: Clive Newall, President Tel: +44 7802
721663E-Mail: info@fqml.com
CAUTIONARY STATEMENT ON FORWARD-LOOKING
INFORMATIONCertain statements and information herein,
including all statements that are not historical facts, contain
forward-looking statements and forward-looking information within
the meaning of applicable securities laws. The forward-looking
statements include estimates, forecasts and statements as to the
Company’s expectations of production, Mineral Resources and Mineral
Reserves at Kansanshi, and the S3 Expansion (including the timing,
cost and details thereof) and are subject to, among other things,
the impact of ore grades on future production; the potential of
production disruptions; potential production, operational, labour
or marketing disruptions as a result of the COVID-19 global
pandemic; capital expenditure and mine production costs; a decision
to pursue the S3 Expansion; the outcome of mine permitting, other
required permitting; the outcome of legal proceedings which involve
the Company; information with respect to the future price of
copper, gold, silver, nickel, zinc, pyrite, cobalt, iron and
sulphuric acid; estimated mineral reserves and mineral resources;
First Quantum’s exploration and development program; estimated
future expenses; exploration and development capital requirements;
and the Zambian fiscal regime. Often, but not always,
forward-looking statements or information can be identified by the
use of words such as “plans”, “expects” or “does not expect”, “is
expected”, “budget”, “scheduled”, “estimates”, “forecasts”,
“intends”, “anticipates” or “does not anticipate” or “believes” or
variations of such words and phrases or statements that certain
actions, events or results “may”, “could”, “would”, “might” or
“will” be taken, occur or be achieved.
With respect to forward-looking statements and
information contained herein, the Company has made numerous
assumptions including among other things, assumptions about
continuing production at all operating facilities, the price of
copper, gold, silver, nickel, zinc, pyrite, cobalt, iron and
sulphuric acid, anticipated costs and expenditures and the ability
to achieve the Company’s goals. Forward-looking statements and
information by their nature are based on assumptions and involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements, or industry
results, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements or information. These factors include,
but are not limited to, future production volumes and costs, the
temporary or permanent closure of uneconomic operations, costs for
inputs such as oil, power and sulphur, political stability in
Zambia, adverse weather conditions in Zambia, , labour disruptions,
potential social and environmental challenges (including the impact
of climate change), power supply, mechanical failures, water
supply, procurement and delivery of parts and supplies to the
operations, the production of off-spec material and events
generally impacting global economic, political and social
stability.
See the Company’s Annual Information Form for
additional information on risks, uncertainties and other factors
relating to the forward-looking statements and information.
Although the Company has attempted to identify factors that would
cause actual actions, events or results to differ materially from
those disclosed in the forward-looking statements or information,
there may be other factors that cause actual results, performances,
achievements or events not to be anticipated, estimated or
intended. Also, many of these factors are beyond First Quantum’s
control. Accordingly, readers should not place undue reliance on
forward-looking statements or information. The Company undertakes
no obligation to reissue or update forward-looking statements or
information as a result of new information or events after the date
hereof except as may be required by law. All forward-looking
statements and information made herein are qualified by this
cautionary statement.
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