Cukaru Peki PEA Report — 2016

A staged processing route is proposed for the Cukaru Peki project, progressing from direct-sale ore to flotation concentrate production.

Report context

This report presents a Preliminary Economic Assessment (PEA) for the Cukaru Peki project, dated March 2016. The processing sections describe a developmental approach to provide processing facilities that accommodate the mine plan, using capital-efficient staging from a direct shipping ore (DSO) starter mine through to a 2.0 Mtpa flotation plant for upper zone material.

Processing route

DSO Starter Mine Phase

For the initial three to four years of production, an oversized 1.0 Mtpa crushing, open-circuit grinding and filtration plant is constructed to reduce the 0.5 Mtpa DSO to a size acceptable to smelters and also to allow representative samples to be taken. The DSO product is described with a copper grade of 12-14%, a gold grade of 9-15 g/t and an arsenic grade of 0.13-0.25%. This material could be smelted directly after crushing and milling. It is assumed that DSO will be crushed to a nominal size in the order of P100 less than 2 mm before being bagged or trucked directly to smelters. The DSO crushing and screening plant will be located near to the underground access decline.

Flotation Expansion Phase

The DSO plant is later expanded by the addition of a rougher and cleaner flotation plant to result in a 1.0 Mtpa crushing, closed-circuit grinding, flotation and concentrate filtration plant. The PEA assumes that copper will be recovered by rougher and cleaner flotation either into “low arsenic” and “high arsenic” concentrates, or into a single arsenic-containing copper concentrate. The copper mineralogy consists primarily of covellite with lesser enargite, and minor colusite, bornite and chalcopyrite. Enargite and colusite contain arsenic and therefore the arsenic grade of any copper concentrate will be a key consideration for smelter choice, terms and charges.

Final Expansion Phase

The 1.0 Mtpa plant is duplicated, to provide 2.0 Mtpa capacity to treat the lower grade upper zone material in order to maintain a similar level of copper production.

Concentrate Products

Two copper concentrates are envisaged for subsequent production:

• Up to 100 ktpa of a ‘Low Arsenic’ high copper concentrate with a copper grade of 52-58%, a gold grade of 3.9-6.3 g/t and an arsenic grade of 0.48% after blending.
• 50-100 ktpa of a ‘High Arsenic’ relatively high copper concentrate with a copper grade of 37%, a gold grade of 3.4-12.8 g/t and an arsenic grade of 2.5-5.5% after blending.

Both concentrates are within marketable ranges, with no other significant deleterious elements identified.

Gold Distribution

The majority (60%) of the gold in ROM reports to a pyrite concentrate which is considered as a waste product in the PEA; this will be stored separately and will be targeted for additional processing testwork in future technical studies. DSO product contains approximately a third of the gold and a quarter of the copper life of mine mill feed (ROM), all of which will derive revenue in the first four years of the mine life according to the smelter payment terms assumed in the PEA.

Processing Alternatives Considered

The report briefly discusses two processing alternatives. A third concentrate from the rougher and/or cleaner tails containing pyrite and gold might be considered; this has not been included in the PEA, but could provide additional revenue. No treatment route has been identified as yet for the pyrite concentrate, but a pyrite roasting, cyanide leaching of the calcine and “SART” will be considered. A dedicated study will be required into metallurgical behaviour and recovery of the gold from the pyrite concentrate.

A hydrometallurgical treatment route is also considered, based on oxidation of the sulphides (covellite and enargite) in a high pressure and temperature autoclave, followed by neutralization of dissolved metals, recovery of copper by SX/EW and gold by CIL.

Key reported parameters

Technical qualifications

The PEA assumptions for concentrate production are based on preliminary metallurgical testwork and mineralogical work completed on Cukaru Peki upper zone samples. No treatment route has been identified as yet for the pyrite concentrate, and a dedicated study will be required into metallurgical behaviour and recovery of the gold from the pyrite concentrate. For capital cost estimation, a cost was obtained for a similar crushing, grinding, flotation and concentrate filtration plant that was recently estimated at feasibility level by a reputable Australian engineering company; costs were adjusted using the “six tenths rule” and typical factors were added for construction indirect costs, EPCM and contingency. For the tailings storage facility, little definition exists on possible tailings disposal sites or dam design, and a mid-range value of USD2/t has been used to cover the cost of dam raises during the life of the mine. Operating costs were calculated from a combination of first principles and typical benchmarks for similar plants.

Source: U6782 Cukaru Peki PEA Report v30.docx, March 2016, Sections 17.1-17.5.2.