EQ Resources Ltd (ASX:EQR) has delivered a significant increase in its Mt Carbine ore reserve and a substantial decrease in strip ratio, which improves mine life extension potential for Australia’s only primary tungsten producer.
The company has seen an increase in open cut Ore Reserve tonnes to 3.54mt and a 29% increase in contained WO3 in open cut Ore Reserves to 1.161m mtu.
EQR, which own 100% of the Mt Carbine Tungsten Mine near Cairns, is looking to transform its world-class tungsten assets by leveraging advanced technology, historical stockpiles and unexploited Resource, with the aim of being the pre-eminent tungsten producer in Australia.
The latest update puts it one step closer to achieving this aim.
The update has been delivered via a combination of additional drilling results, reinterpretation of the Resource model and the successful implementation of the XRT ore sorting operations at lower grades.
The results, as stated, is a significant increase in the estimated open cut Ore Reserve tonnes and contained WO3 metal. The low-grade stockpile (LGS) has been partially depleted since the previous Ore Reserve estimate.
The Ore Reserve estimate is current as of September 1 2022 and accounts for all mining activities undertaken to this date.
Reserve comparision
Looking at the previous ore reserve estimate from December 31, 2021, we can see the improvement in under a year.
The highlights include:
- open cut ROM tonnes increased from 1.26mt to 3.54mt
- open cut ROM WO3 grade decreased from 0.71% to 0.33%
- open cut contained WO3 increased from 900k mtu to 1.161m mtu (1 mtu = 10kg WO3)
- LGS depleted by 0.13mt
Mt Carbine Ore Reserve Estimate at 1 September 2022.
The changes in open cut Ore Reserves are predominantly driven by changes in the Resource interpretation with significantly larger areas of lower grade tungsten included in the Resource model.
The increase in Ore Reserves has reduced the ROM strip ratio within the open cut from 11.1 (waste t:ore t) to 3.1.
EQR will now use the updated resource to put towards the current Bankable Feasibility Study (BFS) which is due for completion in late 2022.
Improved viability
The increased Ore Reserves combined with a lower strip ratio has improved the economic viability of the project via the implementation of larger mining equipment and a reduction in the amount of costly selective ore mining.
The Ore Reserves have been limited to a practical pit shell based on the current economic limits of the deposit.
Ramps were designed into the pit shell using suitable widths and grades to accommodate the planned open cut mining fleet. The open cut shell and the LGS were subdivided into detailed mining blocks which were then fully scheduled, including haulage modelling, for the planned life-of-mine.
The results of the schedule were then assessed in a financial model to determine the overall economic viability of the project.
Only Ore Reserves, including the LGS, were used to generate revenue, with all other materials classified as waste.
The financial assessment showed that the deposit generated substantial cashflows.
Price assumptions
The financial assessment assumed a long-term sale price for ammonium paratungstate (APT) of US$340 per mtu with a 0.73 AUD:USD exchange rate utilised.
An overall sale price of US$12,240/concentrate tonne is realised based on concentrate being 50% WO3 grade and 72% of the WO3 in the APT is payable ($340 * 100mtu/tonne * 50% * 72%).
The final realised price for each tonne of 50% WO3 concentrate applied to the financial assessment is AU$16,767.