Mowana is operating on a full-time basis and Cradle Arc is ramping up to achieve an annualised production rate of 12,000 tonnes Cu. Production costs are expected to average US$1.5/ lb over the mine life based on an average metallurgical recovery of 91%. The CPR, completed by Wardell Armstrong, reports an NPV of US$87.4 million for the initial 12,000 tonnes Cu production scenario based on an early 2017 copper price of US$2.60 / lb at a discount rate of 10%.
In tandem with its current mining activities, the Company intends to undertake additional test work over the coming months to finalise its decision on the installation of a Dense Media Separation (“DMS”) unit at the Project. If pursued, this technology is anticipated to almost double throughput to 2.6Mtpa for ~22,000 tonnes Cu by Q3 2018, which will dramatically enhance the mine economics and increase the Project’s NPV to US$245 million. Importantly, the Company has a conditional offer for funding of the DMS agreed with the a leading engineering firm.
Additional upside potentially exists by developing an underground operation in the future, subject to studies, to access the rest of the resource, which is located down dip and along strike from the open pits currently being mined. An underground operation has the potential to materially increase the life of mine.