The feasibility study into KGL Resources’ Jervois copper project in the Northern Territory has confirmed that it is technically robust and financially viable.
Based on a copper price of $US4.23 per pound, the figures support a high-grade copper mine with concentrate production for an initial mine life of 11.25 years.
The study reflects the impact of industry-wide cost inflation and other challenges associated with bringing new projects online in the current environment.
The forecast long-term structural deficit in the copper market from 2025, driven by global decarbonisation targets for achieving net-zero emissions by 2050, supports this project coming online in the second half of this decade.
The study was prepared by KGL during a volatile COVID period in which many projects were delayed. In the short term, global economic growth headwinds are being characterised by higher inflation, rising interest rates, supply chain constraints and, in Australia, limited skilled labour availability.
KGL executive chairman Denis Wood said that in parallel, global decarbonisation objectives were driving electrification and renewable energy commitments that requires a significant supply response for green metals, such as copper, cobalt, nickel and zinc.
“The target commodity for the Jervois project is copper with subordinate gold and silver,” he said.
“The project will be developed over a two-year timeframe that covers infrastructure development (18 months) followed by commissioning and production ramp up over a six-month period.”
KGL plans to commence with open pit operations for about three years to commission and ramp up production. This reduces up front mining costs, simplifies operations during commissioning and reduces pre- production capital expenditure.
Underground operations are progressively scheduled to commence ore production to sustain a 1.6 million tonnes per annum process plant feed once open-cut operations cease.
KGL intends to move toward a final investment decision on the basis that project finance and shareholder equity can be secured during early 2023, subject to market conditions.