Feb 3 2011
Equinox Minerals Limited (TSX and ASX: EQN) provides an update on the expansion strategy for its Lumwana copper mine in Zambia.
Chimiwungo resource potential
Following the discovery of the Chimiwungo East shoot at Lumwana in early 2010, a continuous six rig drilling program of 45,000 metres has been conducted to delineate the extent of copper mineralisation at Chimiwungo East and down plunge on the Chimiwungo Main shoot. This drilling program will be ongoing utilising eight rigs over 12 months for a planned additional 110,000 metres. The results of the 2010 drill program suggest the potential to substantially increase the previously stated Chimiwungo resource within the pits (defined at a copper price of $1.20 per pound) being Proven Minerals Reserves of 82 million tonnes at 0.7% copper, Probable Mineral Reserves of 119 million tonnes at 0.6% copper and Inferred Mineral Resources of 413 million tonnes at 0.6% copper.
Pit optimisation studies utilising the new drill data and applying various long term pricing scenarios that are more consistent with current copper price expectations, indicates scope to extend the Chimiwungo pit substantially to the south and east, potentially increasing the scale of the Chimiwungo resource in the range of 1 billion to 1.5 billion tonnes of copper ore at a similar grade to the current resource.
The 2010 mineral reserves and resources statement is expected to be released in the second quarter of 2011. The statement will reflect the 2010 program, which was a combination of exploration, infill and sterilisation drilling and as such, we do not expect a material increase in NI 43-101 compliant resources this year. The 2011 drill program will focus on bringing the Chimiwungo East shoot and the down plunge extension of the Chimiwungo Main shoot into mineral resource and reserve category.
Expansion study
A first stage feasibility study is due to be completed on the Lumwana expansion project by the second quarter of 2011. When this study commenced in early 2010, it was based on the resources defined at that time and was evaluating a plant expansion from the Lumwana plant nameplate capacity of 20 million tonnes per annum ("Mtpa") of ore to an increased capacity of 35 Mtpa. However, as a consequence of the potential for a substantial increase in the Chimiwungo resource and the upward shift in the outlook for copper prices, the study is now being conducted on the basis of a Chimiwungo mining inventory of 1 to 1.5 billion tonnes at 0.6% copper. The assumed mining inventory would support a much larger scale operation with a throughput rate of 45 Mtpa of ore. Under the mining inventory assumption Lumwana would have a mine life in the range of 27 to 37 years at the 45 Mtpa processing rate.
An expanded copper concentrator processing 45 Mtpa of ore would be expected to produce approximately 260,000 tonnes per annum of copper in concentrate. The expansion of the concentrator would essentially be a replication of the existing Lumwana concentrator with a preliminary capital estimate of approximately $450 to $550 million for the plant expansion. Ongoing expansion study activities will include completion of the resource drilling program, mine scheduling, mobile fleet studies, detailed design and costing of the plant expansion (including timing of a second crusher) and an evaluation of concentrate offtake scenarios. The expansion investment decision is expected in early 2012 with expanded production anticipated to commence by 2015.