Ventnor Resources (ASX: VRX) is now in a position to immediately begin a Bankable Feasibility Study having confirmed the economic and technical viability of its Thaduna/Green Dragon Copper Project in a recent Scoping Study.
The study has delivered attractive economics for the Western Australian project, confirming the viability of an underground extension to the initial open cut operation.
Initially, mining would commence at two open cut operations - Thaduna and Green Dragon - followed by underground mining at Thaduna.
Key findings of the study include average production of 15,000 tonnes of contained copper per annum over a 10 year mine life, with high recoveries and concentrate value.
Capital expenditure is estimated at $70 million and the average operating expenditure is expected to be around $1.75 per pound.
First production is slated for the December quarter of 2014.
Bruce Maluish, managing director, commented: "The release of the Scoping Study results is another major milestone for Ventnor and its shareholders.
"The results to date confirm the Thaduna/Green Dragon Project is a viable, stand-alone operation. We now have the confidence to immediately move forward to the BFS stage.
"The project's attractive margins and relatively low capital requirements combine to provide a timely payback based on current copper prices."
Maluish said the consistency, continuity and relative simplicity of the orebody - as well as its tendency for increasing grade at depth - should ensure an attractive operating environment for mining.
"The mineralogy of the ore should provide a very clean concentrate which is highly sought after.
"Our metallurgical testwork has shown the proposed flowsheet is consistent with industry standard, and can produce a high level of recovery, high grade concentrates and ultra-low impurities."
Based on the results of the Scoping Study, Ventnor is moving to immediately initiate a BFS with results expected in the September quarter 2013.
The BFS will further focus on detailed mine planning, metallurgical testwork, processing options, confirmed contract rates and operating cost reduction initiatives.
Ventnor is in the process of appointing a study team.
Further deeper drilling is underway at Thaduna/Green Dragon and will be included as part of the BFS.
Ventnor's aim is to extend the current JORC Resource to between 175,000 and 200,000 tonnes of contained copper.
The Resource currently stands at 142,000 tonnes of contained copper and 945,000 ounces of contained silver.
As part of the work being undertaken for the BFS, Ventnor plans to undertake the following work:
- Drilling a further 12 exploration holes at Thaduna to confirm continuity of the orebody to 650 metres depth;
- Infill drilling of 8,000 metres within the optimised pit areas; and
- Additional Geotech diamond holes at Thaduna and Green Dragon.
Advancing mining licence
Ventnor has been in negotiation with the Native Title Claimants (WC99/46), the Yugunga-Nya People, to enable the grant of the mining and miscellaneous licences required for the Thaduna/Green Dragon Copper Project.
Discussions are at an advanced stage with agreed terms and a near final draft agreement.
Many of the studies required for a mining permit have been completed or are underway.
Long lead studies such as summer and winter flora and fauna studies have been completed with no highlighted issues.
The remaining required studies are expected to be completed by mid-2013, lodged for permits and included in the BFS.
Potential offtake partners
Ventnor has had a number of enquiries from interested parties for concentrate offtake.
Following the completion of the Scoping Study, the company will begin discussions with potential buyers.
Ventnor will also investigate potential financing opportunities including project financing through debt, equity, pre-paid sales or a combination of these products.
Positive economics confirming the viability of the Thaduna/Green Dragon Copper Project paves the way for Ventnor to immediately move the project to the BFS stage, another milestone on the road to production.
The proposed flowsheet is consistent with industry standard, and can produce a high level of recovery, high grade concentrates and ultra-low impurities.
With the move to the BFS stage, investors can expect strong news flow and significant catalysts that will firmly advance Ventnor along the path to development at Thaduna/Green Dragon.
Further positive results at various stages of the BFS would provide leverage for the potential re-rating of the current A$27.2 million market cap. and $0.45 share price.
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