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Overview
Copper Resources owns a 75% interest
in Minière de Musoshi et Kinsenda
(MMK), which holds three high-grade deposits in
the Katanga Province of the Democratic Republic
of the Congo (DRC), near the Zambian border.
The remaining interest in MMK is held 20% by
SODIMICO, a government company, and 5% by the
Forrest Group, the largest private business in
Katanga and one of the largest companies
in the DRC with diversified operations
including mining, engineering, construction
and cement. The Forrest Group has operated for
over eighty years in the DRC and has extensive
local operational and management experience to
support and facilitate the development of the
properties. |
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The Kinsenda and Musoshi deposits were mined from 1968
to 1983 by a Japanese mining consortium, then
by Canadian management on behalf of the Zairian government
from 1983 to 1987, and subsequently by Gecamines, a
Congolese state mining company. Historical production
from Kinsenda totaled approximately 4.9 million tonnes
at 5.12% copper.
Kinsenda and Musoshi are both currently flooded and
require dewatering prior to restarting operations; Lubembe
is a green field exploration property with high potential.
All three deposits have been drilled, Musoshi and Kinsenda
extensively, and Lubembe not to the same degree. The
three deposits contain an estimated 5.3 billion pounds
of copper as shown in the table below.
| Deposit |
Copper
Content |
Grade |
Metres
Drilled |
| Tonnes |
Billions lbs. |
| Kinsenda |
840,000 |
1.9 |
5.3% |
66,000 |
| Musoshi |
580,000 |
1.3 |
2.4% |
30,000 |
| Lubembe |
1,000,000 |
2.2 |
2.2% |
12,000 |
| Total |
2,420,000 |
5.3 |
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The independent bankable feasibility study (“BFS”) prepared by Mineral Engineering Technical Services Pty Ltd (METS) of Perth (Australia) on the Kinsenda Restart Project estimates that the total financing required, including capital cost, working capital and financial charges during construction, will be approximately $93 million and that operations will commence in mid-2008. The project is expected to be funded with $36.4 million from Copper Resources, of which $10 million has already been provided to MMK. Copper Resources will have to seek further equity funding to complete the project. RMB Resources previously approved a project loan in the amount of $32 million and has expressed interest in arranging and providing an expanded facility of $56 million.
The BFS also confirmed the highly profitable and attractive nature of the project, as a result of the high grade of the ore (5.1%). The project economics remain compelling with an IRR to Copper Resources estimated at 52% and an NPV at 10% estimated at $124 million based on a long term copper price of $1.30 per pound. The average total cash operating cost is estimated to be a very low 71 US cents per pound of copper ensuring the competitiveness of the mine. The BFS also shows that, at higher copper prices, the financial returns to CRC from the project increase significantly:
Cu Price $/lb |
IRR |
NPV @ 10% (US$mn) |
$1.30 |
52% |
124 |
$1.50 |
60% |
166 |
$1.75 |
75% |
230 |
$2.00 |
89% |
296 |
The MMK project area has extensive infrastructure including roads, water, staff accommodation and power. In addition, there is a 2,500 tpd ore processing plant at Musoshi which will be refurbished prior to commencing operations. Significant progress has been made on dewatering of the mine and the MMK project team is commencing procurement of long-lead equipment and completing formulation of the mining plan, design and schedule.
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