The favourable metallurgical tests were received from samples taken from drill core from Nakru-1.
Using the suggested operating rates in the recently announced Conceptual Mining Study, these tests indicate a concentrate production of 76,500 tonnes assaying 25.1% copper and 8.3 grams per tonne (g/t) gold, or 19,200 tonnes of copper per year.
Importantly, recoveries of gold may be improved with further testwork, and assays of the final concentrate indicate that it will be easily sold to smelters with no significant penalties given for various trace elements.
Cash flow positive within two years
The Conceptual Mining Study, released earlier this month, indicates the development of the Nakru-1 copper deposit could be cash flow positive within two years of production.
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.
There is the potential for a significant increase of the tonnage in the area.
The study indicates a net present value of US$291 million based on 100% ownership, a copper price of $3.34 per pound, 10% discount factor and 90% mill recovery after royalties and before company tax. A Pre-Feasibility Study is yet to be conducted.
Estimated capital costs are around US$458 million, while operating costs are estimated at US$16.50 per tonne of ore.
To date, only 27 diamond core drill holes have been completed at Nakru-1, which hosts an Inferred Resource of 38.4 million tonnes at 0.61% copper, 0.29g/t gold and 1.8g/t silver.
Additional drilling is now required to define the extent of mineralisation and overall tonnage potential in the area ahead of pre-feasibility level studies.
Since late 2009, joint venture partner Barrick (PNG Exploration), a subsidiary of Barrick Gold, has spent over A$21.6 million on drilling and exploration to earn a Participating Interest of 72% in the West New Britain Project tenements.
Barrick will fund and conduct a $2.21 million exploration program on the project during the second half of 2012.
The company previously advised Coppermoly it plans to divest its interest in the tenements.
Peter Swiridiuk, managing director, told Proactive Investors previously the Conceptual Mining Study showed the project could be relatively quickly developed if the company could devise a mechanism to buyout partner Barrick's interest.
"We are currently reviewing possibilities through Odyssey Capital in Sydney."
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