Alecto confirms full-time production at Mowana

The AIM-traded firm said that to date, more than 1,900 tonnes of copper concentrate had been produced, which was being sold to Alecto's offtake partner Fujax Minerals and Energy.

“The company continues to advance the acquisition of the project by way of a reverse takeover and is pleased to report that the competent person’s report on Alecto's African assets and the producing Mowana mine has now been completed by Wardell Armstrong International, representing an important milestone towards the publication of the admission document required to enable Alecto to recommence trading on AIM,” the firm’s board said in a statement.

It said the CPR reported a current resource of circa 172 megatonnes at 0.84% copper, of which 26 megatonnes sat within two existing pre-stripped 350 metre-deep pits.

“These pits represent the main areas of current operation.

“Allowing for an element of overlap in the original modelling on which the CPR is based, the company estimates the resource at 162 megatonnes at 0.84% copper - equating to 481 kilotonnes of copper in the measured and indicated categories and 732 kilotonnes of copper in the inferred.”

Alecto said it intended to ramp up to an annualised rate of 12,000 tonnes of copper in the third quarter.

Production costs were expected to average $1.50 per pound over the mine life, based on an average metallurgical recovery of 91%.

The CPR reported a net present value of $87.5m for the initial 12,000 tonnes of copper production scenario, based on an average copper price of $2.80 per pound at a discount rate of 10%.

“In tandem with its current mining activities, the company intends to undertake additional test work over the coming months to finalise its decision on the installation of a Dense Media Separation unit at the project,” the board added.

“If pursued, this technology is anticipated to facilitate [up to] a 100% increase in throughput to 2.6 megatonnes per annum for [around] 23,000 tonnes of copper by Q3 2018, which will dramatically enhance the mine economics and increase the project's net present value to $245m.”

As it announced in December, the company had conditional funding for a DMS with Fujax and NHI of $20m.

“Additional upside potentially exists by developing an underground operation in the future, subject to studies, to access the rest of the resource, which is located down dip and along strike from the open pits currently being mined.

“An underground operation has the potential to increase the life of mine to 20 years.”