A scoping and economic study has outlined the “exceptional economics” of the Ngami Copper Project in the Kalahari Copper Belt in Botswana, wholly owned by Cobre Ltd (ASX:CBE), and the potential of the deposit to host an in-situ copper recovery operation.
The study highlights the project's strong economics, including a net present value (NPV) of more than A$1 billion and an internal rate of return (IRR) exceeding 90%, based on conservative estimates of 40% copper recovery.
“The exceptional economics at Ngami Copper Project demonstrate the project’s potential to deliver a substantial resource at the bottom of the global cost curve for copper production,” Cobre CEO Adam Wooldridge said.
“This is exemplified by the ~A$1 billion NPV generated with a relatively conservative 40% copper recovery.”
The study suggests that Cobre can develop a scalable and de-risked extraction process, allowing for staged capital expenditure.
Specifically, it uses a two-stage model designed to de-risk and limit the initial capital investment using a starter production plant, producing 1,900 tonnes per annum copper, followed by full production at 40,000 tonnes per annum copper.
The study was completed using an in-situ copper recovery (ISCR) process to target the ~40-kilometre strike of mineralisation estimated at between 103 and 166 million tonnes at 0.38% to 0.46% copper.
NPV and internal rate of return IRR under various copper recoveries:
The NPV and IRR were calculated at a 10% discount rate using a copper recovery range of 30% to 60% and a long-term copper price of A$6.62/lb (US$4.30/lb) and silver price of A$46.2/oz (US$30/oz).
Capital costs:
Operating costs per annum:
Project advances to PFS stage
The scoping study results highlight the robust economics possible with an ISCR development and provides justification for the next stage of follow-up work. This work includes:
- Around 9,000 metres of infill diamond and reverse circulation drilling to bring the first 30 million tonnes of resource into JORC category, which is scheduled to start next month.
- Comprehensive metallurgical testing and hydrogeological characterisation along the full target strike length.
- Pilot injection/pumping trial to verify the modelled in-situ copper and silver recoveries.
“We’re highly encouraged by the successful hydrogeological, metallurgical, engineering and economic studies summarised in this report, all of which provide justification to advance the project to the PFS stage,” Wooldridge said.
Shares have been as much as 11.12% higher in morning trade on the ASX to A$0.09.