Copper smelter project, Zambia
Kansanshi's concentrate is currently treated at smelters in Zambia, however, existing domestic smelting capacity will be insufficient to process the substantial increase in production resulting from the Kansanshi expansion and the Sentinel project. The new copper smelter is designed to process 1.2 million tonnes of concentrate to produce over 300,000 tonnes of copper metal annually. The smelter is also expected to produce 1.0 million tonnes of sulphuric acid as a by-product at a low cost which will benefit Kansanshi by allowing the treatment of high acid-consuming oxide ores and the leaching of some mixed ores. The additional acid is also expected to optimize the expansion of the oxide leach facilities and allow improved recoveries of leachable minerals in material now classified and treated as mixed ore.
Detailed design works on the smelter are well progressed and all of the major equipment packages have been ordered. On site, earthworks construction is approximately 85% complete and concrete pouring is 20% complete. Mechanical installation commenced in January 2013. The project is scheduled for construction completion in mid-2014 followed by commissioning and ramp up.
Sentinel project, Zambia
A mineral resource and reserve estimate for the Sentinel copper project was released in March 2012. An estimated measured and indicated resource of 1,027 Mt at 0.51% copper grade, containing 5.2 Mt of copper has been delineated, inclusive of an estimated recoverable proven and probable mineral reserve of 774 Mt at 0.50% copper grade, containing 3.9 Mt of copper. The life of mine strip ratio is anticipated to be 2.2 and the estimated mine life is in excess of 15 years. An infill drilling programme has commenced to identify further detail of the geological resources that will be encountered during the initial years of operation.
The project is expected to produce between 270,000 and 300,000 tonnes of copper in concentrate annually.
Sentinel construction activities continued to ramp up in Q4 2012 following the approval from the Company's Board of Directors. Project milestones to the end of December 2012 include detailed design engineering 70% complete; construction completion of process plant earthworks for the major equipment areas; over 30,000 cubic metres of concrete poured on site; and approximately 3,000 tonnes of structural steel fabricated with approximately 1,500 tonnes of steel already received on site and being erected. The development of project infrastructure continues: the major tenders for the Zambia Electricity Supply Corporation Limited 330kV transmission line and substation works have been released; the first senior houses are complete and ready for occupation; the visitor guesthouse is complete; and a further 20 houses are on schedule for completion in Q1 2013.
The Company will continue project development with an on-going commitment to social responsibility within the complete license area.
Project capital costs were estimated at approximately $1.72 billion with project completion unchanged and expected during 2014. However a throughput increase from 40 Mtpa to 55 Mtpa, plus the addition of a nickel processing plant (Enterprise development) has been added to the project development which increased the total capital cost estimate to $2.0 billion.
Enterprise project, Zambia
The maiden mineral resource estimate for the Enterprise nickel deposit has been identified at 40.1 Mt at 1.07% nickel. This supports proved and probable mineral reserves of 32.7 Mt at 1.10% nickel and based on a 4 Mtpa operation, the mine life would be approximately eight years producing 38,000 to 40,000 tonnes of nickel per annum. There is further potential to increase both the mineral resource and reserve as drilling continues in the adjacent Enterprise South West Zone. The Enterprise deposit is located approximately 12 kilometres north west of the Sentinel development.
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