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AUSTRAL RESOURCES AUSTRALIA LTD — Capital/Financing Update 2023
Feb 14, 2023
64411_rns_2023-02-14_2f1c4534-2185-40e6-aba4-4eca0b249712.pdf
Capital/Financing Update
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Austral Resources Australia Ltd
ASX AR1
ASX ANNOUNCEMENT
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15 February 2023
Positive Scoping Study Delivers Robust Economics for Austral's Lady Colleen Copper Project
Key highlights:
-
Austral Resources has received an initial evaluation of the economics of mining the copper (Cu) Mineral Resource at the Company’s 100% owned Lady Colleen Project, located on an existing granted Mining Lease (ML90170).
-
The independent Scoping Study, prepared by CSA Global, indicates that construction of an open cut mine at Lady Colleen is viable. Austral has identified clear opportunities for improvements in cost economics and intends to evaluate these opportunities through a Pre-feasibility Study.
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Production rate and mine life are expected to grow with continued resource definition and extensions – current study includes production from Mineral Resource of approximately 44k tonnes of Cu at a cut-off grade of 0.7% Cu.
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Study economics reflected in pre-tax IRR of approximately 38% over approximately 5 years and pre-tax NPV7.5 of A$60M – ranging from A$15M to A$94M with a median estimated value of A$55m.
-
Further key metrics coming out of the Scoping Study include:
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➢ Total copper production of approximately 44k tonnes from both heap leach and flotation processing methods.
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➢ Payback period of approximately 2.6 years at C1 costs and Cu sales price of A$12,000.
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➢ . C1 operating costs of approximately US$2.78 per lb[1]
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Lady Colleen’s current total Mineral Resource is 2.8MT @ 1.9% Cu (at a 0.7%Cu cut-off), which is part of Austral’s current total JORC Mineral Resource Estimate of 420kt.
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Austral plans to follow through on key recommendations coming out of the independent Scoping Study to further improve the economics of the proposed mine, including:
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➢ 91% of Lady Colleen’s Mineral Resource is categorised as Measured and Indicated. Further drilling aimed at upgrading remaining 9% Inferred Mineral Resources to Indicated Mineral Resources.
1 USD AUD FX 0.69
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Austral Resources Australia Ltd
ASX AR1
ASX ANNOUNCEMENT
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➢ The high-grade core of the Lady Colleen Mineral Resource is currently open along strike and down plunge, with exploration success from the drilling planned in 2023 with the potential to increase the resource base of the Lady Colleen Project.
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➢ Optimise pit wall angles to minimise waste movement requirements.
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➢ Progress metallurgical test work to increase level of confidence in recoveries.
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➢ Hydrogeological/hydrological work to estimate the aquifer water inflows and their effect on the pit walls.
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➢ Detailed estimation of sink rates determining the production rates in the next stage compatible with industry standards.
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➢ Estimate the capital costs, operating costs, royalties, tax and payments.
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➢ Ongoing conversion of Mineral Resources into proven and probable Ore Reserves.
Cautionary Statement
The Scoping Study referred to in this announcement has been undertaken to determine the potential for the production and sale of a Copper concentrate from Austral’s Lady Annie Project. The Scoping Study is a preliminary technical and economic study of the potential viability of the production and sale of a Copper concentrate from the Lady Annie Project based on low level technical and economic assessments (+/- 30% accuracy) that are not sufficient to provide any assurance of an economic development case. The heap leach and flotation processes have been examined within this Scoping Study. Further evaluation work and appropriate studies are required before the sale of copper concentrate can be included in an economic development case.
Approximately 91% of the life of mine production is from a measured and Indicated Mineral Resource estimate and 9% is from Inferred Mineral Resources that have not been upgraded at this time[2] . The Company has concluded it has reasonable grounds for disclosing a Production Target, given that the Scoping Study assumes that, on average, production is from 91% Measured or Indicated Resource category. There is a lower level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the Production Target or Scoping Study assessment will be realised. The inclusion of Inferred Resources into the production profile is not a determining factor of the Project's economic viability.
2 Appendix 1, ASX release 28 October 2022
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Austral Resources Australia Ltd
ASX AR1
ASX ANNOUNCEMENT
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The Scoping Study is based on the material assumptions outlined elsewhere in this announcement. While the Company considers all the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by the Scoping Study will be achieved.
To achieve the potential production indicated in the Scoping Study, funding sourced from current operational cashflows and from potential capital-raising activities will likely be required at the commencement of the Project. Investors should note that there is no certainty that the Company will be able to raise funding when needed, however the Company has concluded it has a reasonable basis for providing the forward-looking statements included in this announcement and believes that it has a reasonable basis to expect it will be able to fund the incremental development of the Lady Annie Project. It is also possible that such funding may only be available on terms that may be dilutive to, or otherwise affect the price of the Company’s existing shares.
Given the uncertainties involved, investors should not make any investment decisions based solely on the results of this Scoping Study.
Copper producer Austral Resources Australia Ltd (ASX:AR1) ( Austral or the Company ) is pleased to announce the release of a Scoping Study prepared by CSA Global-that examines the viability of constructing an open cut mine at the Company’s Lady Colleen Project. The construction of this mine would add significantly to both Austral’s copper production capabilities and its revenue base, which is already trending higher as Mt Kelly’s output levels continue to ramp up.
The CSA Report is attached as an Appendix to this announcement and details the key assumptions used in the Scoping Study. The Mineral Resources underpinning the production target have been prepared by a competent person in accordance with the JORC Code and announced on 28 October 2022 as Lady Colleen ore grade Increases by 200%.
The next stage of project development commences with a Pre-feasibility Study. When that is completed (and the technical and economic viability of the Lady Colleen Project is confirmed by this Study) a timeframe for development and production will be finalised and communicated.
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Austral Resources Australia Ltd
ASX AR1
ASX ANNOUNCEMENT
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Austral’s Managing Director and CEO, Dan Jauncey, commented:
“We are thrilled to release the initial Scoping Study for our 100%-owned Lady Colleen Copper Sulphide Mining Project. The results have exceeded our expectations and demonstrate the significant potential of this Project.
The overall performance of the project opportunity is a direct consequence of our team’s unwavering efforts to prove up the economic viability of the current proven copper resource at Lady Colleen. With the base case for building the mine now delivered, we are quickly moving to add to this exciting development. Our team is now progressing additional exploration activities that are expected to further upgrade the mine resource, and flowing from this, viability metrics.
Ahead of any such upgrades, the initial Study’s findings have already increased the chance of the robust and economically viable copper sulphide deposit at Lady Colleen being developed. A mine there will provide a material boost to Austral’s revenue base. It would further cement our position as both a copper producer and an explorer with a still highly prospective project book.
I want to thank all of our stakeholders for their continued support, and I look forward to sharing more positive updates with you as the Project progresses. The future is looking bright for Lady Colleen Copper Sulphide Mining, and I couldn't be more excited about the possibilities that lie ahead.”
This announcement is authorised for market release by the board.
FOR FURTHER INFORMATION PLEASE CONTACT:
Austral Resources Australia Ltd Media & Investor Enquiries Dan Jauncey The Capital Network Managing Director & CEO Julia Maguire Level 9, 60 Edward Street P: +61 2 8999 3699 Brisbane City Qld 4000 E: [email protected] P: +61 7 3520 2500
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Austral Resources Australia Ltd
ASX AR1
ASX ANNOUNCEMENT
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About Austral Resources
Austral Resources Australia Ltd is an ASX listed copper cathode producer operating in the Mt Isa region, Queensland, Australia. Its Mt Kelly copper oxide heap leach and solvent extraction electrowinning (SXEW) plant has a nameplate capacity of 30,000tpa of copper cathode. Austral has developed its Anthill oxide copper mine which has an Ore Reserve of 5.06Mt at 0.94% Cu. The Company expects to produce 40,000t of copper cathode over a four-year period from mid-2022.
Austral also owns a significant copper inventory with a JORC compliant Mineral Resource Estimate and 2,100km[2] of highly prospective exploration tenure in the heart of the Mt Isa district, a world class copper and base metals province. The Company is implementing an intensive exploration and development program designed to extend the life of mine, increase its resource base and then review options to commercialise its copper resources.
Competent Person’s Statement
The information in this announcement that relates to Mineral Assets, Exploration Targets, Exploration Results, Mineral Resources and Ore Reserves is based on and fairly reflects information compiled and conclusions derived by Mr Ben Coutts, Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Coutts is Exploration Manager of the Company. Mr Coutts is a geologist and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results and Ore Reserves (2012 JORC Code). Mr Coutts consents to the inclusion in this announcement of the matters based on this information in the form and context in which it appears. The Company confirms that it is not aware of any new information or data that materially affects the exploration results cross referenced in the announcement.
Ore Reserve and Mineral Resource Estimate Statements
Detailed information that relates to Ore Reserves and Mineral Resource Estimates is provided in Austral Resources Prospectus, Section 7, Independent Technical Assessment Report. This document is available on Austral’s website: www.australres.com and on the ASX released as “Prospectus” on 1 November 2021. The Company confirms that it is not aware of any new information or data that materially affects the estimates of Mineral Resources and Ore Reserves as cross referenced in this release and that all material assumptions and technical parameters underpinning the estimates continue to apply and have not changed.
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Austral Resources Australia Ltd
ASX AR1
ASX ANNOUNCEMENT
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Appendix 1. Key Austral ASX announcements
| DATE | TITLE |
|---|---|
| 1 Nov 2021 | Austral Prospectus |
| 3 Nov 2021 | Austral lists on ASX |
| 9 Nov 2021 | Anthill and Mt Kelly development underway |
| 17 Nov 2021 | Anthill blasting commences |
| 7 Dec 2021 | Thiess signing |
| 14 Dec 2021 | Updated Company presentation |
| 11 Jan 2022 | Mining commences at Anthill |
| 3 Feb 2022 | Offtake and Prepayment Agreement secured with Glencore |
| 31 Mar 2022 | Austral's Anthill Mine Ore Shipments Commence |
| 26 Apr 2022 | Exploration update |
| 4 May 2022 | RIU Conference presentation |
| 6 Jun 2022 | Austral exploration update |
| 8 Jun 2022 | Glencore (MIM) JV |
| 8 Jun 2022 | Resources Rising Stars Presentation |
| 28 Jul 2022 | Lady Colleen Drilling Update |
| 2 Aug 2022 | Drilling at Flying Horse |
| 9 Aug 2022 | Maiden Mineral Resource at Enterprise |
| 11 Aug 2022 | Successful Placement |
| 26 Aug 2022 | Operational and Strategic Update |
| 5 Sep 2022 | New Drilling at Lady Colleen |
| 16 Sep 2022 | Austral Board Approves Scoping Study for Lady Colleen |
| 26 Sep 2022 | Austral and Glencore Finalise Agreements for $8.3M Spend |
| 27 Sep 2022 | Lady Colleen Assays Confirm 5m @ 5.74% Cu |
| 13 Oct 2022 | Step-out Drilling Delivers 6m @ 2.95% Cu at Lady Colleen |
| 28 Oct 2022 | Lady Colleen Grade Increases by 200% |
| 9 Nov 2022 | Rock Chip Assays of 16.05% Cu Drive 2023 Drill Targets |
| 23 Dec 2022 | Production and Scoping Study Funding |
| 9 Jan 2023 | Commercial Production and Positive Operational Cashflow |
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MEMORANDUM
CSA Global Pty Ltd ABN 67 077 165 532
To: Shane O’Connell Cc: Andrew Beaton, Bronagh Freeman Date: February 14, 2023 From: Marck Maramat, Senior Mining Engineer Khairulla Aben, Principal Mining Engineer Report Nº: R119.2023 Re: Lady Colleen Scoping Study
Level 3, 1-5 Havelock Street West Perth WA 6005 AUSTRALIA T +61 8 9355 1677 E [email protected] www.csaglobal.com
INTRODUCTION
Austral Resources Australia Ltd (“AR1” or “the Company) has engaged CSA Global to conduct a Scoping Study for the Lady Colleen Copper deposit located in Queensland. This engagement follows the Whitle op�misa�on work AR1 completed in December, where poten�al economic pits have been iden�fied in four different scenarios.
This scoping study involved reviewing and modifying the input parameters as required and running an op�misa�on in Whitle using an updated resource block model. The block model was prepared externally by John Horton from ResEval. The pit shell generated at a selected revenue factor was used to generate a highlevel strategic mine schedule. Only the pit shell was created at this stage, and the pit designs will be created a�er the required geotechnical informa�on is obtained.
This strategic mine schedule and some high-level capital and opera�ng cost es�mates were then fed into a cost model to evaluate the Project's financial outlook.
INPUT PARAMETERS
The inputs for this study were supplied by Austral Resources Australia Ltd, or CSA Global (where detailed informa�on was missing) and align closely with the December 2022 Whitle op�misa�on work with one of the main differences that the Heap Leaching of the oxide and low-calcium transi�on material was included in the updated work. Parameters are outlined below in Tables 1 to 4.
Financial Input Parameters
Table 1: Financial Input Parameters
| Input | Unit | Value |
|---|---|---|
| Currency | AU$ | AU$ |
| USD to AUD conversion factor | AUDper USD | 1.44 |
| Discount rate | % | 7.5 |
| Price for Copper | $AU/t | 12,000 |
| Price for Gold | $AU/oz | 2,600 |
Scoping Study Memorandum No. R119.2023
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| Input | Unit | Value |
|---|---|---|
| Government royalties | %revenue | 4%(20% discount considered) |
The government royalty for the heap leach product currently has a 20% discount, and it is assumed the same discount will also be applicable to the concentrate. This needs to be confirmed in the later stages of the Project.
Table 2: Mining Input Parameters
| Input | Unit | Value |
|---|---|---|
| Miningrecovery | % | 95.0 |
| Miningdilution | % | 5.0 |
| Overall slope angle | Degrees | 40 |
| Miningcosts(inc. D&B) | AU$/t | 4.50 |
| Miningcost adjustment factor | AU$/t/m depth | 0.01 |
| Rehabilitation cost | AU$/t waste | No allowance made |
| Maximum sink rate | m/year | 120 |
| Maximum concentrator feed | Kt/month | 130 |
A mining recovery and dilu�on study, along with the Selec�ve Mining Unit (SMU) study, are required at the next stage of the Project to confirm the assump�ons.
The Client provided the maximum sink rate from experience on the Anthill project, but it needs to be es�mated in more detail in the next stage.
Table 3: Processing and Selling costs
| Input | Unit | Value |
|---|---|---|
| Froth Floatation | ||
| Processing | AU$/dmt ore | 25.00 |
| Transport Cost(to Mt. Isa Concentrator) | AU$/dmt ore | 15.00 |
| Heap Leaching | ||
| HeapLeach(Ox and Low-Calcium Trans) | AU$/dmt ore | 17.60 |
Table 4: Concentrate Specifications and Deductions
| Input | Unit | Value |
|---|---|---|
| Concentrate Grade | %Cu | 23.00 |
| Freight Charge(shipto offshore Smelter) | AU$/t conc | 200.00 |
| SmeltingCharge | AU$/t conc | 115.20 |
| RefiningCharge/Sales Cost | ||
| Perpayable Gold | AU$/oz | 7.20 |
| Perpayable Copper | AU$/lb | 0.115 |
| HeapLeach(power station for electroplating) | AU$/t Cu | 850.00 |
| Percent Payability | ||
| Copper | % | 95.70 |
| Gold | % | 90.00 |
| Minimum Payable concentrate metalgrades | ||
| Gold | g/t conc | 1.00 |
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AUSTRAL RESOURCES AUSTRALIA LTD AR1STO01
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| Input | Unit | Value |
|---|---|---|
| Recoveries: | ||
| Floatation - Copper | ||
| TRANS | % | 54.00 |
| FRESH | % | 90.00 |
| Floatation - Gold | ||
| TRANS/FRESH | % | 80.00 |
| Leaching - Copper | ||
| OXIDE/TRANS | % | 85.00 |
Metallurgical recoveries and other parameters require a more detailed study at the next stage.
Net Payable Metal Price
The net payable price for each metal was calculated and used as the selling price in Whitle. The calcula�ons are summarised in Table 5 below.
Table 5: Calculation of Net Metal Prices for the Pit Optimisation
| Description | Unit | Gold | Copper - Floatation |
Copper – Heap Leach |
|---|---|---|---|---|
| Metal Price(Copper) | $/t Cu | $12,000 | ||
| RefiningCharge | $/lb Cu | $0.115 | ||
| $/t Cu | ($254) | |||
| Concentrate deductions | ||||
| SmeltingCharge | $/t conc | $115 | ||
| $/t Cu | ($501) | |||
| Freight Credit Charge | $/t conc | $200 | ||
| $/t Cu | ($870) | |||
| Deducted Metal Price | $/t Cu | $10,375.60 | ||
| Metal Price(Gold) | $/oz | $2,600 | ||
| $/g | $83.59 | |||
| RefiningCharge | $/g | ($0.23) | ||
| Deducted Metal Price | $/g | $83.36 | ||
| Concentrate Grade | %Cu | - | 23.0% | - |
| Payability | % | 90.00% | 95.70% | 100.00% |
| Net Metal Price (before royalty) |
$/gAu | 75.02 | - | - |
| $/t Cu | - | $9,929.44 | $11,150.00 | |
| Government Royalty | %revenu e |
4.00% | 4.00% | 4.00% |
| $/gAu | ($3.00) | - | - | |
| $/t Cu | - | ($397.18) | ($446.00) |
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| Description | Unit | Gold | Copper - Floatation |
Copper – Heap Leach |
|---|---|---|---|---|
| Net Metal Price(after royalty) | $/g Au | $72.02 | - | - |
| $/t Cu | $9,532.27 | $10,704.00 |
OPEN PIT OPTIMISATION
An op�misa�on was run in Geovia Whitle so�ware based on the parameters summarised above to get op�mal pit limits at different metal prices using revenue factors from 0.9 to 2.0 at 0.05 increments.
Measured, Indicated, and Inferred Mineral Resources were included in the op�misa�on, with Inferred on average 9% of the total Resource in the resul�ng pit shell.
The results from the op�misa�on run are outlined below in Table 6. The Revenue Factor 1 pit shell was selected for high-level mine scheduling.
Table 6: Whittle Output Summary by Revenue Factor
| Pit | RF | Total Rock (MT) |
Ore (MT) |
Waste (MT) |
SR | Au (oz) |
Au (g/t) |
Cu (tonnes) |
Cu (%) |
|---|---|---|---|---|---|---|---|---|---|
| 1 2 |
0.90 0.95 |
25.2 43.2 |
1.63 2.68 |
23.6 40.5 |
14.5 15.1 |
3,652 5,845 |
0.070 0.068 |
26,715 44,569 |
1.64 1.67 |
| 3 | 1.00 | 45.1 | 2.85 | 42.2 | 14.8 | 6,137 | 0.067 | 46,608 | 1.64 |
| 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 |
1.05 1.10 1.15 1.20 1.25 1.30 1.35 1.40 1.45 1.50 1.55 1.60 1.65 1.70 1.75 1.80 1.85 1.90 1.95 2.00 |
45.1 46.4 48.2 49.2 50.1 53.1 54.2 57.4 57.8 60.1 61.1 62.8 64.6 65.6 67.3 68.1 68.6 71.4 72.0 73.4 |
2.91 3.06 3.24 3.38 3.54 3.89 4.09 4.52 4.70 5.04 5.33 5.64 6.07 6.36 6.66 6.91 7.22 7.65 7.97 8.28 |
42.2 43.4 44.9 45.8 46.6 49.2 50.1 52.9 53.1 55.1 55.7 57.2 58.5 59.2 60.7 61.2 61.4 63.8 64.0 65.1 |
14.5 14.2 13.9 13.5 13.2 12.7 12.3 11.7 11.3 10.9 10.5 10.1 9.6 9.3 9.1 8.9 8.5 8.3 8.0 7.9 |
6,212 6,445 6,792 7,014 7,283 7,945 8,212 9,077 9,283 9,810 10,207 10,678 11,149 11,522 11,949 12,229 12,570 13,041 13,375 13,668 |
0.066 0.065 0.065 0.064 0.064 0.064 0.063 0.063 0.061 0.061 0.060 0.059 0.057 0.056 0.056 0.055 0.054 0.053 0.052 0.051 |
46,871 48,265 49,870 50,812 51,746 54,007 54,995 57,162 57,676 59,306 60,180 61,432 62,803 63,595 64,668 65,284 65,886 67,462 68,059 68,878 |
1.61 1.58 1.54 1.50 1.46 1.39 1.35 1.27 1.23 1.18 1.13 1.09 1.03 1.00 0.97 0.95 0.91 0.88 0.85 0.83 |
Compared to the December Whittle work, the shell selected in this study is very close in shape and size, with a slight increase in tonnes and metals, while the average copper grade has decreased to 1.64 from 1.76. These changes are primarily attributed to the inclusion of a Heap Leach plant to process oxide material and transitional material with a
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Calcium content of < 2%. The comparison with the December Whittle work is summarised in Table 7 below. It is important to note that the Au and Cu metals reflected do not yet consider payability.
Table 7: December 2022 Whittle Work (Case 2) VS January 2023 Scoping Study
| Pit | RF | Total Tonnes MT |
Waste MT |
Ore MT |
Au Oz |
Au grade g/t |
Cu Tonnes |
Cu Grade % |
|---|---|---|---|---|---|---|---|---|
| December 2022 Whittle Study January 2023 Scoping Study |
1 1 |
42.4 45.1 |
40.0 42.2 |
2.44 2.85 |
5490 6137 |
0.070 0.067 |
42,944 46,608 |
1.76 1.64 |
| Difference % |
2.65 6% |
2.24 6% |
0.41 17% |
647 12% |
0.00 -4% |
3,664 9% |
-0.12 -7% |
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A'
A
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Figure 1: Plan View
The resul�ng pit dimensions are 500m wide, 600m long, and approximately 220m deep.
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Figure 2: Vertical Section along A---A’ looking North
MINE SCHEDULE
A high-level mine schedule was generated in Whitle to indicate annual material volume movement and metal grades based on a plant throughput capacity.
The mining rate used was based on previous experience of Austral Resources, being 1.6 million tonnes per month, but also considers a limit of 120 meters per year maximum sink rate, which needs to be evaluated in further studies as the pit dimensions are 500 meters by 600 meters, which will limit the mining zones.
The Client recommended the concentrator feed limit as a maximum of 130 thousand tonnes per month.
There was no limit put on the Heap Leach, as also recommended by the Client.
CSA Global has also considered pushbacks and staging to op�mise the �ming of mining by allowing early access to ore and, thus, genera�ng posi�ve cashflows earlier in the Project’s life, ul�mately maximising the NPV. However, as recommended by the Client, only the RF1 shell was used as one single stage ul�mate pit.
Table 8 shows the schedule that was selected for this Scoping Study.
It is important to note that only material matching the minimum paid metal grade criteria was included in the Schedule and the following Cost model.
As men�oned, only 9% of the Inferred material is included in the schedule. However, it is essen�al to note that there is a higher share of inferred material in year 1 of the Schedule, which needs to be upgraded to at least Indicated in the further stages.
The schedule starts from year 1 as it is considered that the mining works will begin in 2023 with the site being prepared. However, detailed costs and �ming will be calculated in the next stage.
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Table 8: Mining and input into Processing by Period
| Period | Waste | Heap Leaching (OX&TR) | Heap Leaching (OX&TR) | Flotation (TR) | Flotation (TR) | Flotation (TR) | Flotation (FR) | Flotation (FR) | Flotation (FR) | Proportion of the Measured Resources |
Proportion of the Indicated Resources |
Proportion of the Inferred Resources |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Years | tonne | tonne | Cu, t | tonne | Cu, t | % | % | Cu, t | Au, oz | % | % | % |
| 1 | 19,031,262 | 156,530 | 854.1 | 12,207 | 137 | 11 | 27% | - | - | 37% | 36% | 27% |
| 2 | 18,235,543 | 115,526 | 1,153.1 | 54,456 | 712.5 | 59.6 | 6% | 11,017.8 | 1,761.9 | 38% | 57% | 6% |
| 3 | 4,912,529 | - | - | - | - | - | 9% | 31,799.2 | 3,508.9 | 14% | 77% | 9% |
| 4 | 33,515 | - | - | - | - | - | 6% | 3,387.9 | 368.5 | 1% | 93% | 6% |
| Total | 42,212,849 | 272,056 | 2,007 | 66,663 | 849 | 70 | 9% | 46,205 | 5,639 | 23% | 69% | 9% |
being filtered.
**numbers might not sum up due to rounding.
OX – oxide material, TR – transi�on material, FR – fresh material
The Schedule is mainly based on the Measured and Indicated Resources (91%) with only 9% of Inferred Resources included
Scoping Study Memorandum No. R119.2023
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MINING EQUIPMENT
Depending on the availability, the equipment types might vary. Contractor Mining is assumed in the scope of this work.
study at a later stage is recommended to evaluate the most economical op�on.
COST MODEL
A high-level cost model was created, summarised in Table 10, based on the mine schedule and the input parameters provided. It excludes capital costs, deprecia�on, and tax that are not specified in the input parameters.
Table 10: High-Level Cost and Revenue Model Summary
| Physicals Summary | Units | Totals |
|---|---|---|
| Mining summary Total potential ore tonnes mined Total waste tonnes mined Total tonnes mined Processing summary Potential ore tonnes to HL Cu Transition potential ore tonnes to FP Cu Au Fresh potential ore tonnes to FP Cu Au |
t t t t t t t oz t t oz |
|
| 2,846,551 | ||
| 42,212,849 | ||
| 45,059,400 | ||
| 272,056 | ||
| 2,007 | ||
| 66,663 | ||
| 849 | ||
| 70 | ||
| 2,507,832 | ||
| 46,205 | ||
| 5,639 | ||
| Total Production Cu recovered after HL |
t | |
| 1,706 | ||
| Cu recovered after FP Payable Au recovered after FP (considering the minimumgrade in concentrate) |
t oz |
|
| 42,043 | ||
| 3,647 | ||
| Mining Operating Cost | ||
| Total | AUD | 223,626,990 |
Scoping Study Memorandum No. R119.2023
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| Physicals Summary | Units | Totals |
|---|---|---|
| Processing Cost | ||
| Total | AUD | 69,150,561 |
| Potential ore transportation cost | ||
| Transportation to concentrator | AUD | 38,617,425 |
| Total Operating Cost | ||
| Total Mining Operating Cost | AUD | 223,626,990 |
| Total Processing Cost | AUD | 69,150,561 |
| Total transportation cost | AUD | 38,617,425 |
| Total Operating Cost | AUD | 331,394,976 |
| Smelting and Freight Cost | ||
| Total Copper | AUD | 57,617,231 |
| Royalties | ||
| Total | AUD | 20,005,538 |
| Revenue | ||
| Revenue before royalty | ||
| Revenue from HL | AUD AUD AUD AUD |
19,022,480 |
| Revenue from FP Cu | 472,606,414 | |
| Revenue from FP Au | 8,509,562 | |
| Total | 500,138,457 | |
| Revenue after royalty | ||
| Revenue from Product | AUD | 480,132,918 |
| Cashflow | ||
| Undiscounted Cashflows (Pre-tax)1, 3 | AUD | $91,120,712 |
| Discounted Cashflow (Pre-tax)1, 2, 3 | AUD | $60,486,112 |
| IRR (Pre-tax)1, 3 | % | 38.9 |
| Paybackperiod(Pre-tax)1, 3 | years | 2.6 |
1 only Pre-tax numbers are provided, as the Client indicated that the tax credits are being discussed
2 no prepara�on year was considered
selected parameters and the metal price change +-10% between AUD$18 million to AUD$94, respec�vely.
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Scoping Study Memorandum No. R119.2023
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SENSITIVITY ANALYSIS
A high-level sensi�vity analysis was performed using the cost model prepared on the Pre-tax discounted Cash flow. It is important to note that the taxes were not considered for this exercise, except for the Royal�es.
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----- Start of picture text -----
Sensitivity analysis (Pre-tax discounted CF)
160,000,000
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
-
-20 -10 0 10 20
-20,000,000
-40,000,000
% change
Operating costs Metal prices
Pre-tax discounted CF
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Figure 3: Sensitivity analysis
The sensi�vity analysis was not performed on the capital costs as those were not considered in this study, because the plan is to use most of the current infrastructure, contractor mining and exis�ng heap leach and Mt Isa concentrator.
The performed sensi�vity analysis has shown that the Project is similarly sensi�ve to the changes in the opera�ng costs and the metal prices, indica�ng that at +-10% change, the project economics is s�ll posi�ve and becomes nega�ve only at closer to 20% change in any of those. This is, again, only considering the Pre-
Scoping Study Memorandum No. R119.2023
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AUSTRAL RESOURCES AUSTRALIA LTD AR1STO01
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CONCLUSIONS AND RECOMMENDATIONS
around 3 years. The work was performed including all Mineral Resource categories and none of those were converted into Ore Reserves at this stage due to the addi�onal work and detailaza�ons required.
life.
The recommenda�ons for the Lady Colleen project, based on this Scoping Study, are:
-
Further geological drilling is required to upgrade the Inferred Mineral Resources included in this study, to Indicated Mineral Resources.
-
Undertake geotechnical drilling and inves�ga�on to ensure the pit walls are as steep as safely possible to minimise the waste movement requirements, as the waste stripping is one of the main drivers of the economics of the Project.
-
An update of the results is required a�er the metallurgical testwork is completed.
-
More detailed equipment selec�on and scheduling (especially sink rates) are required in the next stage.
-
Es�mate/detail the capital costs, other costs, royal�es, tax and payments.
-
Detailed dilu�on and losses in the later stages with poten�al Selec�ve Mining Unit analysis (SMU).
-
Con�nue upgrading the Mineral Resource category for the ore body to allow for more detailed study work with a higher degree of confidence.
-
A�er comple�ng the required detailaza�ons and research, convert Mineral Resources into Ore Reserves.
REFERENCES
Lady Colleen Whitle Modelling 7July2022.pdf
Lady Colleen Whitle Modelling 2Dec2022.pdf
“Input data from Client.docx”, mee�ng notes email from Shane O’Connel to Patrick Maher, 9-Jan-2023
Inputs were provided by Andrew Beaton
AR1STO01 - BASIS OF DESIGN_Updated_20Jan2023.xlsx
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Scoping Study Memorandum No. R119.2023