Sign up USA
Proactive Investors - Run By Investors For Investors

Mowana copper mine in full-time production, says Alecto

A Competent Persons Report has also been published which takes Alecto one step closer to resuming trading on AIM
Mowana copper mine
The CPR suggests Mowana has a net present value of US$87.5mln

Alecto Minerals PLC (LON:ALO) has told investors that its Mowana copper mine in Botswana is now in full-time production.

That follows on from the first blast at the end of April and a successful trial period during which Aleecto produced saleable concentrate of up to 28% copper.

So far, the company has produced more than 1,900 tonnes of copper concentrate which is being sold to its offtake partner, Fujax.

WATCH: Mowana mine hitting full-time production 'all good stuff', says Alecto boss

“Mowana is now a full-time copper production operation and we look forward to gaining ownership of the project subject to shareholder approval at which point, we believe, our company will benefit from a significant value re-rating.,” said chief executive Mark Jones.

“Once effected, we will have taken control of a significant asset which has been subject to more than US$150mln of investment in the past for an acquisition price of approximately US$10mln.”

A step closer to resuming trading on AIM

The Competent Persons Report (CPR) on Alecto’s African assets has also been completed, which the firm said represented an “important milestone”.

It takes Alecto one step closer to the publication of the admission document which is needed in order to resume trading on the AIM market.

WATCH: Take a tour of the mine

The company reckons it will have the document published early next month (June), which would hopefully lead to readmission within the next six to eight weeks.

The CPR estimates a current resource of circa 172 million tonnes (Mt) at 0.84% copper at Mowana, of which 26Mt sits within two existing pre-stripped 350 metre-deep pits. 

READ: The Competent Persons Report in full

Allowing for some overlap, Alecto estimates the resource at 162Mt at 0.84% copper. That equates to around 481,000 tonnes of copper in the measured and indicated category and a further 732,000 tonnes of copper in the inferred category.

Alecto intends to ramp up to an annualised rate of 12,000 tonnes of copper in the third quarter of this year. That would give Mowana a net present value (NPV) of US$87.5mln for the initial 12,000 tonnes per annum production scenario based on an average copper price of US$2.80 a pound (lb).

Production costs at the mine are expected to average US$1.50/lb over the mine life based on an average metallurgical recovery of 91%.

Additional upside still at Mowana

The numbers make for decent reading for Alecto and its investors, but the firm reckons there are possible option which, if taken, could boost the project further.

It’s considering installing a Dense Media Separation (DMS) unit which could see throughput double to 2.6Mt per annum, yielding around 23,000 tonnes of copper by the third quarter of 2018.

That would send the mine’s net present value soaring to US$245mln.

A future underground operation could add value at Mowana too. It would let Alecto tap into the rest of the resource which is located down dip and along the strike from the open pits currently being mined.

If Alecto were to go underground, it could extend the life of mine to 20 years.

“We are delighted that the CPR demonstrates the compelling economics of our project even without the installation of a DMS, now that the asset is unencumbered by debt,” added Jones.

“Even better is that it starts to show the tremendous potential upside available using modern techniques identified by our experienced industry partners.”

View full CRA profile View Profile

Cradle Arc Plc Timeline

Related Articles

picture of mine interior
January 15 2018
Caledonia retains operational control of Blanket and ownership of 49% of the mine in Zimbabwe
1522843655_shutterstock_102742847.jpg
April 04 2018
BAM East will be the focus in 2018, after Landore completed a £3.15mln funding
gold
March 14 2018
Orosur Mining is making great strides in its Colombian exploration programme

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You understand that the Company receives either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate.

You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Copyright © Proactiveinvestors.com, 2018. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use