AMN - BOTSWANA: Mowana production in full swing

Production is now ongoing on a fulltime basis at Alecto Minerals’ Mowana Copper Project in Botswana. This follows the completion of the first blast on April 29 and a successful trial period, which saw saleable concentrate produced up to 28% copper.

To date, more than 1900 tonnes of copper concentrate has been produced which is being sold to Alecto’s offtake partner Fujax Minerals and Energy Limited.

Alecto continues to advance the acquisition of the project by way of a reverse takeover and reports that the Competent Persons Report (CPR) on its African assets and the producing Mowana mine has been completed by Wardell Armstrong International. This represents an important milestone towards publication of the admission document required to enable Alecto Minerals to recommence trading on AIM.

The CPR reports a current resource of around 172 million tonnes at 0.84% copper, of which 26 million tonnes sits within two existing pre-stripped 350 metre-deep pits. These pits represent the main areas of current operation.

Allowing for an element of overlap in the original modelling on which the CPR is based, Alecto estimates the resource at 162 million tonnes. Alecto intends to ramp up to an annual rate of 12,000 tonnes of copper in Q3, 2017.

Production costs are expected to average US$1.5/pound over the mine life based on an average metallurgical recovery of 91%. The CPR reports an NPV of $87.5 million for the initial 12 000 tonnes copper production scenario based on an average copper price of $2.8/pound at a discount rate of 10%.

In tandem with its current mining activities, Alecto intends to undertake additional test work to finalise its decision on the installation of a Dense Media Separation (DMS) unit at the project. If pursued, this technology is anticipated to facilitate a 100% increase in throughput to 2.6 Mtpa for 23,000 tonnes copper by Q3, 2018, which will dramatically enhance the mine economics and increase the project’s NPV to $245 million.

Alecto has conditional funding for a DMS with Fujax and NHI of $20 million. Additional upside potentially exists by developing an underground operation in the future, subject to studies, to access the rest of the resource, which is down dip and along strike from the open pits being mined. An underground operation has the potential to increase the life of mine to 20 years. 

Alecto’s current expectations are that an admission document will be published in early June 2017, which would mean a target date for the general meeting and completion before the end of June.

“Mowana is now a full-time copper production operation and we look forward to gaining ownership of the project subject to shareholder approval at which point, we believe, our company will benefit from a significant value re-rating,” comments Alecto Minerals CEO Mark Jones.

“Once affected, we will have taken control of a significant asset which has been subject to more than $150 million of investment in the past for an acquisition price of approximately $10 million.

 “We are delighted that the CPR demonstrates the compelling economics of our project even without the installation of a DMS, now that the asset is unencumbered by debt.

“Even better is that it starts to show the tremendous potential upside available using modern techniques identified by our experienced industry partners,” he continues.

www.alectominerals.com