Cyprium Metals Ltd (ASX:CYM, OTC:CYPMF) has wrapped up a scoping study for the Nifty Surface Mine in Western Australia, which demonstrates the economic potential of the large-scale copper mining project.
The robust study provides a preliminary technical and economic assessment of the Nifty Copper Operation, to support the recommencement of surface mining and copper concentrator operations.
It projects that the optimal pit will contain 70 million tonnes of sulphide ore with a copper grade of 0.9%, resulting in an expected recovery of 570,000 tonnes of copper over the mine's lifespan.
A truck-shovel surface mining operation is anticipated to generate around 4.5 million tonnes per annum of ore feed, facilitating an average annual production of 36,000 tonnes of contained copper-in-concentrate through the expanded plant.
Shares up
Investors have reacted positively to the study and its results with shares up 10.81% to A$0.041 in ASX trading this morning.
The capital expenditure for plant refurbishment, expansion and ancillary site capital is estimated at A$175 million, excluding the cost of the mobile fleet.
Preliminary designs also indicate that 89% of the life-of-mine waste disposal requirements will be met within currently permitted disturbance areas.
"Meaningful step"
Financially, the project boasts a net present value (NPV) at an 8% discount rate of A$880 million and an internal rate of return (IRR) of 46% at a copper price of A$13,000 per tonne.
“This is a meaningful step for Cyprium that consolidates months of work,” said executive chair Matt Fifield.
“The opportunity is clear. This study outlines the high-level plan for accessing the large sulphide resource at Nifty. A relatively large truck-shovel surface mine enables us to best recover the significant resources at Nifty.
“A moderate investment in the brownfield processing plant capacity can nearly double the potential throughput of the plant, enabling the surface mine to produce around 36,000 tonnes of copper metal per year by matching strong mine design, right equipment selection and expanded processing capacity.
“We will refine this plan in the coming months.”
The company will require funding in the order of A$175 million to achieve the range of outcomes indicated in the study, and there is no certainty that this funding will be available when needed.
That said, Cyprium is optimistic about securing financing due to the attractive project economics, modest pre-production capital expenditure and low-risk profile compared to comparable new copper projects.
The Nifty mine's status as a brownfield site with established infrastructure in a stable, well-regulated mining jurisdiction further bolsters its prospects.
Further development
The board has approved advancing the project to the pre-feasibility study stage, which will further develop the study to a sufficient level of confidence to support a declaration of a reserve via a reserve report.
This next phase will incorporate additional scenarios around the base plan, including potential reductions in mining costs and carbon footprint through alternative fuel scenarios and further optimisation of the waste haulage strategy.
Cyprium remains engaged in discussions with potential financiers and is exploring various project financing options, including equity, debt, joint ventures and other hybrid financing structures.