10th Jan 2006 14:00
First Quantum Minerals Ld10 January 2006 NEWS RELEASE 06-01 January 10, 2006 www.first-quantum.com FIRST QUANTUM MINERALS PROVIDES AN UPDATE AND SCOPING STUDY RESULTS FOR THE HIGH PRESSURE OXIDATION AND LEACH PROJECT AT THE KANSANSHI COPPER-GOLD MINE (All figures expressed in US dollars) First Quantum Minerals Ltd. ("First Quantum", TSX Symbol "FM", LSE Symbol "FQM")is pleased to provide updated information and details of a scoping study, datedDecember, 2005 by Bateman Engineering Pty Ltd. ("Bateman") of Mt. Pleasant,Western Australia on the High Pressure Oxidation and Leach ("HPL") Project atFirst Quantum's 80% owned Kansanshi copper-gold project in Zambia. HPL PROJECT UPDATE The main components of HPL project are the autoclaves, an oxygen plant and anadditional 35,000 tonne per annum solvent extraction and electrowinning (SX/EW)facility. The main equipment for the autoclave and oxygen plants has beensuccessfully relocated from Turquoise Ridge in Nevada, USA and all of theequipment is now either on site or in transit to site, or undergoingrefurbishment in South Africa. There will be two autoclave vessels installed atKansanshi as part of the HPL project. One of the autoclaves is on site and hasbeen installed on its foundation, and the second autoclave is in Zambia and isexpected to arrive at Kansanshi by January 20, 2006. Detailed design work for the HPL project has been completed, and constructioncommenced in 2005. Site civil works for the project are essentially complete,with only a small amount of civil work outstanding for the oxygen plant. Themajority of materials have been preordered and are currently arriving on site.The structural, plate work and mechanical installation associated with the newSX/EW plant are well progressed, and are also underway for the autoclave andoxygen plant areas. Piping and electrical installation for the project willbegin this month. Approximately 60% of the project capital has been committed. Construction of the HPL project is expected to be completed such thatpre-commissioning and commissioning will begin in the third quarter 2006. BATEMAN HPL PROJECT SCOPING STUDY HIGHLIGHTS - Project capital cost estimate of $72 million. - Based on the acquisition of a second hand HPL facility (autoclaves, oxygen plant and cooling tower), the HPL project could be commissioned 12 months ahead of the design and construction of a new HPL plant. - The HPL facility under construction would be capable of treating 105,000 tonnes of copper concentrates per year. With expansion of the oxygen plant, the two autoclaves would have the capacity to treat up to 200,000 tonnes of copper concentrate per year. - Over a 5 year period, based on $1.36/lb copper in 2006, $1.20/lb 2007-2010 and $425/oz gold, an additional 67,000 tonnes of copper could be produced for an aggregate increase in revenue of $195 million. Furthermore it is anticipated that there would be a reduction of existing operating costs in the sum of $77 million. This would result in a total gross project benefit of $272 million, excluding project capital. - The HPL project would also produce acid that would meet a part of the acid demand of the oxide leach circuit. - In the mixed ore atmospheric leach circuit, copper leach extraction could be improved by up to 30% depending on the proportion of transition sulphide minerals in the mixed ores through the provision of heated acid and ferric sulphate ions from the autoclave effluent. Process Summary The sulphide flotation concentrate treated by the autoclave will contain anominal 29% copper and 8 grams/tonne gold. The concentrate is oxidisedutilising two autoclaves and copper is recovered from the autoclave effluent viathe existing and expanded SX/EW circuits at Kansanshi. The HPL process results in near total oxidation of the copper sulphideconcentrate converting the sulphide sulphur to sulphates of copper and iron.This additional sulphate will replace acid currently produced for theatmospheric leach circuit, with one significant difference. The autoclave canalso provide a source of ferric sulphate that will leach residual secondarycopper sulphates not readily leachable by acid alone in the current circuitdesign. Test work has shown that, depending on the acid balance across theautoclaves, it is possible to manipulate the extent to which the iron sulphatesproduced from leaching chalcopyrite and pyrite in the autoclave can behydrolysed to a mix of haematite and basic ferric sulphate. The basic ferricsulphate can then be re-leached to provide a source of ferric sulphate for theoxide leach circuit. Basic ferric sulphate provides a source of ferric ions forthe atmospheric leach circuit to dissolve secondary copper sulphides. The totalpressure oxidation process also provides significant waste heat that will beused to increase the atmospheric leach temperature, improving copper leachkinetics and ultimately increasing copper recovery levels. No chloride or surfactants are required for this process. Metallurgical Test Work Metallurgical test work was undertaken on two composite samples comprising oxideore and mixed ore flotation tailings from across the range of mineralogy thatconstitute the feed to the atmospheric leaching circuit. This data was usedduring the scoping study to assess the potential for recovery improvements thatmight be achieved in the oxide leach circuit using solutions derived from thetotal oxidation process. The two composites used were an oxide composite and amixed composite. It was expected that the oxide composite would show thatlittle advantage could be gained from the revised leaching conditions; howeverthe mixed composite was expected to show substantial improvements in copperrecovery. Ammtec Limited, an Australian analytical, metallurgical and mineral testingservices company, undertook the test work under the direction of Bateman/FirstQuantum based on a test work program prepared by Bateman. Bateman used Metsimsoftware modeling of the process to identify the required leaching conditions. Salient points identified from analysis of test results include: 1. Oxide composite: - a small increase in copper recovery is identified, perhaps 2-3%, largely as a result of the increased leach temperature; and - the addition of ferric ions to the leach has not improved the leach recovery as the minerals present do not require ferric ions to achieve high copper recoveries. 2. Mixed ore composite: - a substantially larger increase in copper recovery is identified, of the order of 30%, largely as a result of the increased leach temperature; and - as a result of the addition of ferric ion to the leach; as the secondary copper sulphide minerals do require ferric ions to achieve high copper recoveries. Capital and Operating Cost Summary The capital cost estimate of $72 million is based on the engineering designcurrently in progress, and has been estimated by Bateman, GRD Minproc and FirstQuantum. The operating cost estimate was prepared using reagent consumptions and powercalculations based on the final design criteria for HPL, mass balances developedfrom the Metsim models, and input from First Quantum including local labourrates, power costs, consumable costs in part, and transport costs specific tothe project site. Consumable costs are based in part on Bateman's in house database and in part onrecent costs for reagents delivered to the Kansanshi mine site. Maintenancecosts have been factored from the capital costs of each unit operation andappropriate proportions of that capital cost, based on similar operations inoperating plants. The production rate from the HPL project is limited to that of two autoclavesrunning at approximately 66% of maximum rated capacity in the current designconfiguration; this limit is imposed by the capacity of the oxygen plant.Engineering design has moved forward on the basis that the autoclave systemswill be designed for the maximum throughput capability pending availability ofadditional oxygen. Operating costs were determined for the major variable cost centers for theprocess design currently being executed by Bateman and GRD Minproc. In summary,over a 5 year period, based on $1.36/lb copper in 2006, $1.20/lb 2007-2010 and$425/oz gold, an additional 67,000 tonnes of copper could be produced for anaggregate increase in revenue of $195 million. Furthermore it is anticipatedthat there would be a reduction of existing operating costs in the sum of $77million. This would result in a total gross project benefit of $272 million,excluding project capital. The HPL project as envisioned offers a significant revenue increase derived fromthe additional copper production from the oxide leach circuit afforded by theferric production from the autoclaves, a reduction in the requirement for acidproduction to meet oxide circuit demand allowing excess production to be soldinto the local market if appropriate, and overall capital and time savingsattendant on the purchase of the second hand equipment. Ken Baxter, Msc. Std., an engineer with more than 26 years of experience,currently employed by the engineering and construction company BatemanEngineering Pty Ltd in the capacity of Technical Manager, Copper, supervised thedesign and conduct of the program, and is the qualified person for the purposesof NI 43-101. The relevant portion of the data disclosed in this new releasehas been reviewed and verified (including relevant analytical and test data) byMr. Baxter. On Behalf of the Board of Directors 12g3-2b-82-4461of First Quantum Minerals Ltd. Listed in Standard and Poor's"G. Clive Newall" Sedar Profile #00006237G. Clive NewallPresident For further information visit our web site at www.first-quantum.com or contact Geoff Chater or Bill Iversen 8th Floor. 543 Granville Street Vancouver, British Columbia, Canada V6C 1X8 Tel: (604) 688-6577 Fax: (604) 688-3818 Toll Free: 1 (888) 688-6577 E-Mail: [email protected] The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Certain of the information contained in this news release constitute "forward-looking statements" within the meaning of the Private SecuritiesLitigation Reform Act of 1995. Such forward-looking statements, including butnot limited to those with respect to the prices of gold, copper and sulphuricacid, estimated future production, estimated costs of future production, theCompany's hedging policy and permitting time lines, involve known and unknownrisks, uncertainties, and other factors which may cause the actual results,performance or achievements of the Company to be materially different from anyfuture results, performance or achievements expressed or implied by suchforward-looking statements. Such factors include, among others, the actualprices of copper, gold and sulphuric acid, the factual results of currentexploration, development and mining activities, changes in project parameters asplans continue to be evaluated, as well as those factors disclosed in theCompany's documents filed from time to time with the British Columbia SecuritiesCommission and the United States Securities and Exchange Commission. 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