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Metals X Limited (ASX: MLX), a base metals producer, presented a reset plan for Nifty Copper Operations on 1st May 2019. As per the company, the reset plan is staged for two-phases, which will deliver a profitable long-term exploration. The objective of the first phase (phase-I) is to produce 28,000 tonnes per annum of copper by the March quarter of the year 2020, with a throughput rate of 2 million tonnes per annum. Metals X intends to keep the AISC of the first phase in the range of $6,800-$7,300 per tonne of Copper.
Metals X mentioned that the second phase of the development would aim for 35,000 tonnes per annum of copper by March quarter of the year 2021, with a throughput rate of 2.5 million tonnes per annum at an AISC between $6,400-$6,900 per tonnes of copper. The company recently released its March quarter report.
Both the phases will focus on development to access new mining areas and debottlenecking existing underground infrastructure. The company aims to reduce the cost and increase the productivity of the Nifty Copper Operations and mentioned that the expenditure requirement is planned to be funded from the existing cash flows and modified existing debt facility.
As per the company, the main factor which prompted it to the acquisition in 2016, was the substantial geological upside potential at Nifty. The company completed 70,000m of drilling to date, which in turn, increased the defined mineral resources by 15% and the ore reserves by 144%.
The current resources (JORC 2012) for the Nifty Prospect are as:
Metals X mentioned that the reset plan for the prospectus identified critical areas outside the current Reserve envelope, which could further convert substantial portions of indicated and inferred resources to Reserve through grade control drilling within Western and Eastern Zones 1&2. The drilling would further define new resources within Eastern Zones 3&4, where previous deep drilling intersected encouraging copper mineralisation up to 700m down-plunge.
Financial Metrics for Phase-I&II development:
As per the company, it requires $27 million over the tenure of 3 years to enable the expansion of mining to a steady-state of 2.5 million tonnes per annum. The break-up of the required capital is as;
- $4.9 million in paste plant reticulation and tailing retrieval.
- $6.9 million to increase the ventilation in the west and east direction of the mine.
- $6.6 million for additional underground works.
- $4.0 million in electrical enhancements.
- $4.7 million in capital development.
The reset plan further proposes a resource definition drilling of approx. 18,000 metres per annum.
The forecasted project capital requirement and the purposes are as:
The forecast shown above excludes treatment charges and refining charges and includes $350 per tonnes of copper royalties and sustaining capital.
As per the company, the reset plan for nifty is well-considered, detailed and achievable. The successful execution of the plan will deliver long-term value and growth to the stakeholders of the company.
The shares of MLX closed the dayâs trade at A$0.275 on ASX (as on 1st May 2019), down by 1.786% as compared to its previous close.
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