Contributor Since 2009
Coppermoly (ASX: COY) has received positive results from a recent Conceptual Mining Study at its Nakru-01 copper-gold-silver project on New Britain Island, Papua New Guinea, indicating the development of the copper deposit could be cash flow positive within two years.
As a result of the positive financial outcome, Swain Engineers have recommended that the Nakru tenement continue to be explored for additional copper ore, and for drilling to continue at Nakru-01 and Nakru-02 to define the extent of mineralisation prior to Feasibility Studies.
The study envisaged an open pit containing an estimated 40 million tonnes run of mine ore to support a 5 million tonne per annum operation for an eight year mine life.
Key findings include recoveries of around 90%, and a waste to ore ratio of 2 cubic metres:1 tonne.
Estimated capital costs are around US$458 million, while operating costs are estimated at US$16.50 per tonne of ore.
Shipping would utilise the existing wharf at Kimbe or a new wharf built on the south coast.
Importantly, the study also found the potential for a significant increase of the tonnage in the area.
Peter Swiridiuk, managing director, commented on the positive findings: "The company is delighted that at such an early stage of drilling, the development of the Nakru-01 copper deposit could be cash flow positive within two years.
"The majority of holes drilled to date are mineralised, so the full extent of mineralisation is yet to be defined on the Nakru exploration licence.
"In addition, Nakru-02 is located one kilometre to the west with only three drill holes completed to date, all of which are all mineralised.
"Additional drilling is now required to define the extent of mineralisation of each target to determine the tonnage potential in the area ahead of pre-feasibility level study.
"Additional drilling is being undertaken by Barrick this year to keep the tenement in good standing, while they seek to divest their 72% stake in the project.
"Coppermoly will continue exploring its nearby 100% wholly-owned Makmak tenement, which is immediately south of Nakru."
To date, 27 diamond core drill holes have been completed at Nakru-01 for a total of 5928.4 metres with an average depth of 220 metres, 18 of which are host to intercepts of significant mineralisation.
Nakru‐01 has an Inferred Resource of 38.4 million tonnes at 0.61% copper, 0.28 grams per tonne (g/t) gold and 1.8g/t silver for 233,400 tonnes of copper, 11 tonnes of gold and 69 tonnes of silver.
Mineralisation consists of a zone of supergene copper enrichment above the primary copper zone. Both of these zones are overprinted with narrow zones of precious metals.
An upper zone of copper enrichment (supergene zone) has been intersected within at least four drill holes, returning 28.4 metres at 1.1% copper and 0.27g/t gold from 25.7 metres; 13.55 metres at 2.8% copper and 0.23g/t gold from 74.45 metres; and 8.9 metres at 1.02% copper and 0.1g/t gold from 67.8 metres.
Further drilling is required to define a Resource for the supergene copper zone.
Meanwhile, at Nakru-02 Coppermoly encountered a shallow massive sulphide lens at about 30 metres depth.
One hole intersected 6.7 meters at 3.8% copper, 1.66% zinc, 9.5g/t silver and 0.19g/t gold at 30.3 metres.
Beneath the massive sulphide zone, stringer veinlets of chalcopyrite mineralisation were found to be hosted in rhyolitic breccias.
A hole drilled by partner Barrick Gold (NYSE: ABX), testing the centre of the induced polarisation chargeability anomaly, also encountered this style of mineralisation, intersecting 64 metres at 0.59% copper from 141 metres.
Between 290.1 and 295 metres, a zone assaying 13.6% zinc, 0.84% copper, 24g/t silver and 0.41g/t gold was encountered.
Newly granted tenement
Coppermoly was recently granted an exploration licence over the Makmak tenement, which lies 9 kilometres south of Nakru and covers 280 square kilometres.
The Pulding prospect has previously returned rock sample assays of 10.7% copper, 15.5g/t silver, 1.18% copper, 2.91% copper and 0.65% copper.
Coppermoly has a 28% interest in three tenements - Simuku, Talelumas and Nakru - on New Britain Island, Papua New Guinea.
Since late 2009, joint venture partner Barrick (PNG Exploration) has spent over A$21.6 million on drilling and exploration to earn-in a 72% stake in the tenements.
Barrick will fund and conduct a $2.21 million exploration program on these projects during the second half of 2012.
The company previously advised Coppermoly it plans to divest its interest in the tenements.
With the full extent of copper mineralisation yet to be defined at Nakru, today's results of the study add an exciting chapter to the evolution of Nakru and for Coppermoly. As most of the holes drilled to date have been mineralised there appears to be significant upside in the scale of the resource and the project parameters for potential partners.
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