Coda study confirms SA copper mine financially viable

Coda Minerals looks set to press the go button on plans to mine its Elizabeth Creek copper-cobalt project in South Australia after positive results from its recently completed scoping study on the operation.

The study has revealed a net revenue of more than $5.7 billion over an estimated 14-year mine life at a pre-tax internal rate of return of 26.5 per cent. The company predicts the site will produce 317,000 tonnes of copper and 14,400 tonnes of cobalt at an all-in sustaining cost of $US5987 (A$8885) per tonne of copper equivalent.

Coda says mineralisation will be sourced from two open pits and one long-life underground mine for a steady state annual production of around 25,000 tonnes per year of copper and about 1000 tonnes per annum of cobalt at an average grade of 1.86 per cent copper equivalent.

The initial phase of the operation will include around one year of copper-cobalt concentrate production to drive early cash flow. Phase two then involves constructing a hydrometallurgical plant to produce 13 years’ worth of higher value end products including copper cathodes and battery grade cobalt sulphate.

The plant will use the Albion Process which is an oxygenated leach technology that has a lower capital cost and is relatively easier to operate than conventional pressure oxidisation.

The scoping study highlights a first phase CAPEX of around $277 million. Once the operation shifts to phase-two it will come with a CAPEX of about $320 million in the third year, although that figure will be partially offset by cashflow from the initial phase. A capital payback period of 4.75 years is expected.

The company says its board has already approved next-stage prefeasibility study work for its Elizabeth Creek project that is expected to take around 15 months. It adds that the scoping study confirms the potential for a globally competitive, long-life mine based on the copper-cobalt mineralisation contained within the MG14, Windabout and Emmie Bluff deposits.

This study underpins a robust go-forward case for the Elizabeth Creek Project with excellent project economics. We also have multiple opportunities for expansion and improvement underway.

Elizabeth Creek is 100km south of BHP’s Olympic Dam mine, 15km from BHP’s Oak Dam West project and 50km west of OZ Minerals’ Carrapateena copper-gold project.

In November last year the company revealed a positive mining study showing a viable pathway to steady-state production of 2.5 million tonnes per annum at Elizabeth Creek. The assessment is centred around underground mining of the project’s cornerstone Emmie Bluff copper-cobalt deposit.

The proposed mining schedule will see Emmie Bluff mined while also extracting material from two smaller satellite deposits at Windabout and MG14 that will be used as mill feed during the development and ramp-up of the main operation.

The operation’s cornerstone deposit hosts 43 million tonnes at 1.3 per cent copper, 470 parts per million cobalt, 11 grams per tonne silver and 0.15 per cent zinc or 1.84 per cent copper equivalent. In terms of contained metal, it boasts 560,000 tonnes of copper, 20,000 tonnes of cobalt, 15.5 million ounces of silver and 66,000 tonnes of zinc or 800,000 tonnes of copper equivalent.

Coda believes recent geophysical work has defined several highly prospective expansion targets for the sediment-hosted copper-cobalt mineralisation at Emmie Bluff with the potential to increase project size and scope beyond the 14-year mine life.

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