27th May 2014 11:05
LONDON (Alliance News) - China Africa Resources PLC Tuesday said its pre-feasibility study on the Berg Aukas mine in Namibia has shown it to be a viable project with a best estimated pretax net present value of USD51 million.
The joint-venture between the East China Mineral Exploration and Development Bureau and Weatherly International PLC said the study was calculated on the basis of four different processing options and showed possible pretax net present values, at a discount rate of 10%, of between USD24 million and USD51 million depending on which option is taken.
The study evaluated four options including building plants and mills on site for production and processing, trucking production before processing to an existing facility nearby, selling pre-concentrate production from site, or trucking all ore to be produced and processed at a nearby site.
China Africa said that overall the testwork programme showed that it is feasible to improve on historical testwork grades and improve on the recovery of zinc and lead metals.
It found that the second option, in which concentrate was produced on site and was trucked to a nearby facility for processing, gave the strongest results, with an overall net present vale of USD51 million and an internal rate of return at 31.43%.
On the other hand, its third option to produce on site without processing and sell on all pre-concentrate production from site only brought a net present value of USD24 million and an internal rate of return of 25.27%.
As a result of the testing, the company's financial advisers Minxcon have stated that under the current economic climate, the project is robust and recommended that the project moves to the next decision level.
In April, Coffee Mining Pty Ltd finished a first JORC-compliant Mineral Resource Estimate for the site which showed 1.3 million tonnes of ore with an average grade of 15.47% zinc, 3.84% lead and 0.331% vanadium based on a 3.0% zinc cut off grade.
China Africa Resources shares were down 6.0% to 23.02 pence on Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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