Kalkaroo is Havilah’s flagship mineral project and is the largest undeveloped open pit copper deposit in Australia on a CuEq ore reserve basis, with a 0.74% CuEq grade.
It contains 1.1 million tonnes of copper, 3.1 million ounces of gold and 23,200 tonnes of cobalt in Measured, Indicated and Inferred JORC Resources.
From a mining perspective Kalkaroo has extremely favourable geometry as it forms a consistently mineralised 40-80 metre thick dipping slab over a strike length of at least 3 km. The oxidised top 100 metres of the deposit is enriched in both gold (forming a gold cap) and copper which occurs as native copper (copper metal) and chalcocite (a copper rich secondary sulphide mineral).
In May 2017 Havilah signed an MOU with Wanbao Mining Limited (Wanbao) for the completion of a pre-feasibility study (PFS) on Kalkaroo. The PFS work was carried out by mining consultants, RPMGlobal, who independently confirmed Havilah’s earlier JORC resource for Kalkaroo (see above) and estimated a 100 million tonne Ore Reserve for the deposit as summarised below.
The PFS study indicates positive project economics that support a large-scale open pit copper-gold mine, based on an estimated pre-tax NPV7.5% of $564 million and IRR of 26% at USD$2.89/lb copper, USD$1,200/oz gold, AUD$:USD$0.75. The operation is projected to sustain an average annual production rate of 30,000 tonnes of copper and 72,000 ounces of gold over a 13 year production period. Estimated C1 cost is USD$1.67/lb and pre-production Capex is $332 million.
The economics are highly sensitive to commodity prices with a 10% increase in metal prices resulting in a 48% increase in the pre-tax NPV7.5% to $835 million.
The project is significantly de-risked with grant of Mining Leases over the deposit and Havilah’s ownership of the surrounding pastoral property.
There are excellent prospects to boost resources at Kalkaroo with the deposit being open down-dip and along strike. The surrounding exploration potential is also very high with a three out of three drilling hit rate on conceptual targets chosen by Havilah geologists within a short distance of Kalkaroo (see drilling results below).
After the Wanbao exclusivity period expired in July 2018, Havilah commenced additional PFS studies aimed at improving gold metal recoveries and incorporating the potentially considerable value of the cobalt resources and pyrite tails in the economic model. This work is ongoing and thusfar has yielded encouraging results.