Metals Acquisition Limited Announces Updated Resource and Reserve Statement and Production Guidance
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Figure 1 – Location of Zinc and Lead Mineralisation (Graphic: Business Wire)
Metals Acquisition Limited ARBN 671 963 198 (NYSE: MTAL; ASX: MAC), a private limited company incorporated under the laws of Jersey, Channel Islands (“MAC” or the “Company”) is pleased to release its Resource and Reserve Statement (as at
In accordance with Item 1300 of Regulation S-K (17 CFR Part 229) (“S-K 1300”), all Mineral Resources are reported exclusive of Mineral Reserves.
Resource and Reserve Statement
Highlights from the R+R include:
- 67% increase in mine life to 11-years (end of 2034) based on Mineral Reserves only, compared to the 6-year mine life in the 2022 Resources and Reserves Statement
- 64% increase in contained copper (“Cu”) after replacement of depletion to 0.5Mt in Mineral Reserves (Refer Table 3 for breakdown) at an average grade of 3.3% Cu
- Measured and Indicated Mineral Resources increased to 229 ktonnes of Cu from zero in the prior (Refer Table 2 for breakdown) at an average grade of 4.9% Cu
- An additional 184 ktonnes of Cu in the Inferred Mineral Resources, an approximate 5% reduction on the prior year as Inferred material was promoted to Measured and Indicated Categories
- 83% increase in contained Cu after replacement of depletion in the Measured and Indicated Resources categories
- 2023 Mineral Reserve only extends 95m vertically below the current decline position
-
Above increases have come after only ten months of ownership and based on data from two and a half months post-closing of the acquisition with the effective date for the R+R being
31 August 2023 - All deposits (other than QTSSU-A (feasibility study), are open in at least one direction and drilling is continuing to further increase the R+R, subject to exploration success and economic factors
The effective date for the R+R is
Work is continuing on updating the mine plans as new information is received and importantly following on from the completion of MAC’s dual listing on the ASX and public offer that raised
MAC CEO,
We have always believed that the
Three Year Production Guidance
Based on the updated R+R, the Company is providing the following production guidance for the next three years:
Table 1 - CSA Copper Mine Production Guidance
2024 |
2025 |
2026 |
||||
|
|
|
|
|
|
|
Cu Production (tonnes) |
38,000 |
43,000 |
43,000 |
48,000 |
48,000 |
53,000 |
This three-year production guidance is based primarily on Mineral Reserves but also on measured and indicated Mineral Resources (as at
The 42% and 64% increase in contained Cu after replacement of depletion for Mineral Resources and Mineral Reserves respectively in the R+R has come after ten months of ownership and based on data from two and a half months post-closing of the acquisition.
As discussed below, exploration in the top 850m of the deposit is just starting and initial results highlight strong potential to open additional mining fronts.
Mineral Resources
Table 2- CSA Copper Mine Mineral Resources
System
|
Resource Category |
Tonnes Mt |
Cu % |
Cu Metal kt |
Ag g/t |
Ag Metal Moz |
|
|
|
|
|
|
|
All Systems |
Measured |
3.3 |
5.6 |
182 |
19 |
2.0 |
|
Indicated |
1.4 |
3.4 |
47 |
6 |
0.3 |
|
Meas + Ind |
4.7 |
4.9 |
229 |
15 |
2.3 |
|
Inferred |
3.3 |
5.5 |
184 |
21 |
2.2 |
|
Total |
8.0 |
5.2 |
413 |
18 |
4.5 |
Notes:
-
Mineral Resources are reported as of
31 August 2023 ; - Mineral Resources are reported in accordance with S-K 1300, including with respect to defined terms;
- Mineral Resources are reported exclusive of Mineral Reserves;
-
The Qualified Person who prepared the statement is
Mike Job , ofCube Consulting Pty Ltd ; -
Price assumptions used in the estimation include
US$8,279 /t of copper andUS$22.60 /troy ounce (“oz”) of silver; in line with long term Broker Consensus forecast copper pricing as atAugust 8, 2023 ; - Geological mineralization boundaries defined at a nominal 2.5% Cu cut off for high grade lenses, and 1.5% Cu for the lower-grade halo. Resources reported above a 1.5% Cu cut-off grade;
-
Costs assumptions underlying cut-off grade calculation include
US$78 /t ore mined,US$20 /t ore milled andUS$21 /t G&A ore milled; - Metallurgical recovery assumptions used in the estimation were 97.5% copper recovery and 80% silver recovery;
- Mineral Resources reported as dry, raw, undiluted, in-situ tonnes; and
- Figures are subject to rounding.
As discussed above, not only has total contained Cu in Mineral Resources increased by 42%, the Measured and Indicated portions available for Mineral Reserve conversion has increased by 83%. This is a result of increased drilling and the inclusion of level mapping data where levels have been developed through the deposits and not previously been included in the Mineral Resource.
Overall grade has reduced from 5.3% Cu in the 2022 R+R to 4.9% in the 2023 R+R which is predominately a result of the inclusion of 2.2Mt of material between the new cut-off grade of 1.5% Cu and the previous cut-off grade of 2.5% Cu. In terms of contained Cu this material had a relatively small impact to the overall change, with the larger changes coming from the inclusion of new drilling and level mapping data.
As evidenced by the recent drill results released by the Company,1 including 19.2m @ 10.4% Cu in UDD23025 and 16m @ 10.5% Cu in UDD23024 these deposits are characterised by high grade lodes that have a long vertical extent that project well past the 2023 R+R.
In addition, whilst the mine is currently a producer of high quality Cu concentrates, it did start life as a high grade zinc (“Zn”) mine. As seen in the recently released QSD060 result of 4.3m @ 14.2% Zn, 3.9% Pb and 0.8% Cu the shallower portions of the deposits do host significant Zn mineralisation that is yet to be modelled.
The current R+R starts at a depth of 850m below surface (except for the small QTSS Upper-A deposit) as the data for this area has not historically been in the digital database. A large amount of historical data is available for these shallower portions of the mine and approximately 70% of this has now been digitized. None of this information has been included in the 2023 R+R. Drilling is underway to verify the presence of the mineralisation included in this historical dataset, with the first hole intercepting Zn and Cu massive sulphides as predicted by the historical data at a depth below surface of approximately 330m.
This mineralisation is vertically extensive and occurs adjacent to existing mine development with the interval in EWDD24005 located 30m from existing development as seen in Figure 1. Figure 2 shows the core from the most recent drilling in this area that was targeted at the indicated position of this mineralisation based on the historical data.
Figure 1 – Location of Zinc and Lead Mineralisation
Figure 2 - Massive Zn and Cu Mineralisation in EWDD24005
Mineral Reserves
The Mineral Reserves have been updated based on data to
Total S-K 1300 Mineral Reserves are 14.9Mt @ 3.3% Cu and 13 g/t Ag and are shown in Table 3 below:
Table 3 - CSA Copper Mine Mineral Reserves
|
Proved |
Probable |
Proved and Probable |
M tonnes |
8.3 |
6.6 |
14.9 |
Cu % |
3.5 |
3.1 |
3.3 |
Contained Cu ktonnes |
293 |
201 |
494 |
Ag g/t |
14 |
11 |
13 |
Contained Ag M oz |
3.9 |
2.4 |
6.2 |
Notes:
-
Mineral Reserves are reported as of
31 August 2023 and are reported using the definitions in S-K 1300; -
The Qualified Person who prepared the statement is
Jan Coetzee , an officer of MAC, the Registrant’s Australian subsidiary; -
Price assumptions used in the estimation include
US$8,279 /t of copper andUS$22.60 /troy ounce (“oz”) of silver; in line with long term Broker Consensus forecast copper pricing as atAugust 8, 2023 ; - Mineral Reserves reported as dry, diluted, in-situ tonnes using a Stope breakeven cut-off grade of 2.2% Cu for 2024 to 2026 and a cut-off-grade of 1.65% for the remaining periods and a Development breakeven cut-off grade of 1.0% Cu;
-
Costs assumptions underlying cut-off grade calculation include
US$78 /t ore mined,US$20 /t ore milled andUS$21 /t G&A ore milled; - Metallurgical recovery assumptions used in the estimation were 97.5% copper recovery and 80% silver recovery; and
- Figures are subject to rounding.
Ore Reserves were estimated at a Cu price of
Mineral Reserve grade at 3.3% Cu is down from 4% Cu in the prior year which is a reflection of the lower cost base that the mine is now operating under. This is as a result of reduced mine site operating costs and offsite charges. Cut-off grade is variable based on the ability to mine at higher rates once the Return Air Rise (“RAR”) are complete and ranges from 2.2% Cu near term to 1.65% Cu for the longer term.
The mine plan strategy is somewhat determined by the requirement for additional RAR ventilation at the bottom of QTSN, during which time the mine plan mines the higher grade core. Once the RAR system is in place then the mine plan reverts to a more bulk tonnage model given the large excess processing plant capacity at the mine. At elevated Cu prices the goal is to maximise Cu production where possible and to defer any lower grade material to the back end of the mine plan.
Figure 3 illustrates the changes in the Mineral Reserves from the prior year.
Figure 3 – CSA Copper Mine Contained Cu in Reserve Changes 2022 to 2023
Spatially, the location of the 2023 Mineral Reserve compared to the 2022 Mineral Reserve is shown in Figure 4 below. The bulk of the increases have been in QTSN where the deposit has been increasing in strike length and QTSC where drilling has expanded the lateral and vertical extend of the deposit.
All deposits are open and as seen in Figures 5 and 6 below the Mineral Reserves terminate at RL’s based on drill density with the deposits extending significantly past the 2023 Mineral Reserves.
Figure 4 - Location of the 2023 Mineral Reserve compared to the 2022 Mineral Reserve
The bulk of the Mineral Reserves (84% of total contained Cu) are from the QTSN and QTSC deposits and Figures 5 and 6 illustrate the location of the Mineral Reserves compared to the various resource classifications.
Figure 5 - Location of Mineral Reserves and Mineral Resource Classification - QTSN
Mineral Reserves in QTSN have been extended to the 8300mRL, with current stoping active on the 8430m RL and the decline at the 8395mRL. As such, the current 11 year mine life is only mining a further 95m vertically below the bottom of the decline position at the end of
Figure 6- Location of Mineral Reserves and Mineral Resource Classification – QTSC
The material R+R increase from the R+R at the time of purchase will now enable the Company to optimise mining rates with a view to producing more Cu sooner given the potential for even longer mine life subject to converting the non Mineral Reserve material. This will also be instrumental in right sizing the capital structure of the Company.
Life of Mine (“LOM”) Plan
The LOM plan is based on Mineral Reserves only and on data from the end of
Table 4- CSA Copper Mine Life of Mine Plan
2024 |
2025 |
2026 |
2027 |
2028 |
2029 |
2030 |
2031 |
2032 |
2033 |
2034 |
|
Tonnes - Total Ore (t) |
1,068,000 |
1,286,000 |
1,399,000 |
1,399,000 |
1,399,000 |
1,397,000 |
1,394,000 |
1,396,000 |
1,399,000 |
1,390,000 |
1,034,000 |
Grade - Cu (%) |
3.6% |
3.3% |
3.6% |
3.5% |
3.4% |
3.4% |
3.1% |
3.0% |
3.1% |
2.8% |
3.2% |
Grade - Ag (g/t) |
16 |
12 |
14 |
13 |
13 |
13 |
12 |
12 |
13 |
11 |
14 |
Metal - Cu (t) |
38,000 |
43,000 |
50,000 |
49,000 |
48,000 |
47,000 |
43,000 |
42,000 |
42,000 |
39,000 |
33,000 |
Metal - Ag (oz) |
537,000 |
499,000 |
639,000 |
588,000 |
565,000 |
573,000 |
522,000 |
542,000 |
568,000 |
504,000 |
481,000 |
JORC
MAC is subject to the reporting requirements of both the Securities Exchange Act of 1934 (US) and applicable Australian securities laws (including the ASX Listing Rules), and as a result, has separately reported its Mineral Reserves (referred to as ore reserves for the purpose of the Australasian Joint Ore Reserve Committee Code, 2012 edition (JORC)) and Mineral Resources according to the standards applicable to those requirements.
Conference Call
The Company will host a conference call and webcast to discuss the Company’s updated Reserve and Resource statement on
Details for the conference call and webcast are included below.
Webcast
Participants can access the webcast at the following link https://events.q4inc.com/attendee/950238182
Conference Call
Participants can dial into the live call by dialling 800-274-8461 or +1-203-518-9783 and providing the conference ID ‘METALS’.
Replay
The conference call will be available for playback until
This announcement is authorised for release by the Board of Directors.
QUALIFIED PERSON STATEMENTS
Mineral Resources
The information in this announcement that relates to the Company’s Mineral Resources is based on information compiled by
Mineral Reserves
The information in this announcement that relates to the Company’s Mineral Reserves is based on information compiled by
About
Forward Looking Statements
This release has been prepared by
MAC’s actual results may differ from expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward- looking statements. These forward-looking statements include, without limitation, MAC’s expectations with respect to future performance of the
More information on potential factors that could affect MAC’s or CSA Copper Mine’s financial results is included from time to time in MAC’s public reports filed with the
Appendix 1 – CSA Copper Mine Mineral Resources and Mineral Reserves Mineral Resource Statement
Mineral Resources
The following summary of all information material to understanding the reported estimates of Mineral Resources in relation to the following matters is provided.
Geology and geological interpretation
The CSA deposit is located within the Cobar mineral field, in the
Interpretation of the wireframes is based on geological mapping in the mine, drill core logging, and the structural model that has been developed over time. CSA used a threshold of 2.5% Cu to guide the interpretation of the high-grade lenses. These wireframes are generally constructed manually in
Sampling and sub-sampling techniques
Half core samples are mostly 1m in length with sample weights averaging 1.9kg. The cutting and sampling process is carried out at
The sampling procedures includes interval checks, cutting intervals, sampling intervals, inserting standards and blanks, sampling duplicates, weighing samples and dispatching samples. All parts of the core processing cycle are tracked and recorded electronically.
Drilling techniques
Drilling comprised mostly NQ and NQ2 diamond drill holes using standard tube although in 2023 all underground drilling was NQ3 size. Minor sampling from HQ, BQ, LTK48 and LTK60 sized diamond core holes.
Criteria for classification
Mineral Resource Classification takes into account: location of mine development, drill spacing, grade continuity, search criteria, and copper Kriging metrics. In summary:
- Measured has a diamond drill spacing of approximately ≤20m north-south by 37.5m vertical for QTS North and 20m north-south by 20m vertical for other systems.
- Indicated has a diamond drill spacing of approximately ≤40m north-south by 70m vertical (QTS North) and 40m north-south by 40m vertical (all other systems).
- Inferred has a diamond drill spacing of approximately ≥40m north-south by 70m vertical (QTS North) and 40m north-south by 40m vertical (all other systems). Drill density is sufficient to give confidence that the lens persists down plunge/dip.
Sample analysis method
Samples for assay are sent to the
Estimation methodology
Grade estimation is by Ordinary Kriging using 1m composites within hard boundary domains defined using a 2.5% Cu threshold width a lower-grade halo around the high-grade zones using a 1.5% Cu threshold. 1m Cu composites are not top-cut as extreme values are considered real and have been accounted for by geological domain boundaries. However, Ag composites are top-cut due to extreme values for certain geological domains.
Cut-off grade(s) including the basis for the selected cut-off grade(s)
Mineral resources are reported above a 1.5 Cu (%) cut-off. The high-grade mineralisation interpretation is based on geology and represents a natural 2.5% Cu cut-off.
Mining and metallurgical methods and parameters (other material modifying factors considered to date)
The mineral resource interpretations are steeply plunging and ideal for the long hole stoping methods adopted at CSA. Stope size and standard mining block units also influenced parent block size selection.
Copper processing recoveries at CSA are typically 96.8 - 98.5% producing a concentrate grade of approximately 25.98% Cu.
Mineral Reserves
The following is a summary of all information material to understanding the reported estimates of Mineral Reserves in relation to the following matters:
Material Assumptions
The material assumptions used in preparation of this Mineral Reserve are as follows:
- 2023 Mineral Resource estimate;
- Heading advance and stoping rates in-line with historical performance;
- Modifying factors are in line with historical data and industry norms;
- Mine design principles (ie: strike length, transverse width, level intervals, etc.) are in line with currently utilised mining methods and design principles;
- No material changes to metallurgical recoveries are expected;
- Production gradually ramps up from 1.1 Mtpa to 1.4 Mtpa at a rate of approximately 0.1 Mtpa per year; and
-
Price assumptions used in the estimation include
US$8,279 /t of copper andUS$22.60 /troy ounce (“oz”) of silver; in line with long term Broker Consensus forecast copper pricing as atAugust 8, 2023 ; - Mineral Reserves reported as dry, diluted, in-situ tonnes using a Stope breakeven cut-off grade of 2.2% Cu for 2024 to 2026 and a cut-off-grade of 1.65% for the remaining periods and a Development breakeven cut-off grade of 1.0% Cu; and
-
Costs assumptions underlying cut-off grade calculation include
US$78 /t ore mined,US$20 /t ore milled andUS$21 /t G&A ore milled.
Criteria for Classification
The criteria used for classification, including the classification of the Mineral Resources on which the Mineral Reserves are based and the confidence in the modifying factors applied are as follows:
- Mineral Reserves were classified based on the ration of contained Measured and Indicated Mineral Resources;
- Measured Mineral Resources are converted to Proved Mineral Reserves, and Indicated Mineral Resources are converted to Probable Mineral Reserves;
- Any contained Inferred Mineral Resource is considered as waste;
- No Measured Mineral Resource has been downgraded to Probable Mineral Reserve; and
- Appropriate modifying factors have been applied based on historic performance and in line with industry norms.
Mining Methodology
The mining method selected and other mining assumptions, including mining recovery factors and mining dilution factors are as follows:
-
The mining method used is sub-level open stoping, primary in the form of top-down, transverse stoping with cemented paste backfill. There is also longitudinal and modified Avoca stoping. Some areas are mined bottom-up. There is significant operating experience with these mining methods at
CSA Mine ; - Recovery factors used are 99% for transverse stopes, 91% for longitudinal stopes, and 97% for modified Avoca stopes; and
- Dilutions factors used are 13% for transverse stopes, 20% for longitudinal stopes, and 26% for modified Avoca stopes.
Processing Method
The processing method selected and other processing assumptions, including the recovery factors applied and the allowances made for deleterious elements are as follows:
- On-site processing is using a conventional flotation concentrator which has been in operation since 1965. This produces concentrate which is sent off-site for smelting and refining to produce copper cathode;
- Copper processing recoveries are expected to average 97.5% - 98.5% and silver recoveries are expected to be 80%; and
- Any deleterious elements encountered are expected to be maintained below penalty levels by managing the ore feed blend, if required.
Basis for cut-off grade(s) or quality parameters applied
The basis for cut-off grade(s) or quality parameters applied are as follow:
-
A stope break-even cut-off grade of 1.65% Cu was calculated:
- Based on historical operating costs with gradually applied efficiency improvements reasonably anticipated by MAC; and
-
Copper price of
US$8,250 per tonne and silver price of 21.70 per troy ounce; and
- A stope cut-off grade of 2.20% Cu was applied prior to end-of-year 2026 with 1.65% Cu applied thereafter. This was to manage metal production during a period of increasing mining rate.
Estimation Methodology
The procedure used (estimation methodology) in the preparation of the Mineral Reserve are as follows:
- Mineable shapes were generated using Deswik.SO software;
- Stope dimensions are based on existing operating practices;
- These mineable shapes were re-evaluated against the various Mineral Resource models with all inferred material grades set to zero Shapes were then manually refined removing stopes below cutoff, in isolated areas, adding pillars as required, and removing shapes which could not practically be mined due to proximity to voids or infrastructure;
- Cut-offs were evaluated post application of modifying factors;
-
Development designs and sequencing were completed for all areas to generate a
Deswik schedule; - The variable cut-off grade was applied, and where possible stope below the variable cutoff were delayed to later in the mine life; and
- The schedule was levelled based on production and development constraints to generate the Mineral Reserve Schedule.
Material modifying factors
Material modifying factors, including the status of environmental approvals, mining tenements and approvals, other government factors and infrastructure requirements for selected mining methods and for transportation to market are as follows:
-
CSA Mine is an operating mine and holds ConsolidatedMining Lease 5 (CML5) and two small mining purposes leases, 1093 and 1094 (MPL1093, MPL1094):- CML5, MPL1093, and MPL 1094 are due to expire in 2028, 2029, and 2029 respectively; and
- All required government approvals and licenses for operation are in place;
- All materially required mining infrastructure is in place on-site for the purposes of mining, processing, and shipment of concentrate to market; and
- The mining methods used for the Mineral Reserve estimate are currently in use at CSA mine with extensive operating history.
____________________
1 Please refer to MAC’s Announcement dated
View source version on businesswire.com: https://www.businesswire.com/news/home/20240422290327/en/
Chief Executive Officer
investors@metalsacqcorp.com
Chief Financial Officer
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