Exploring and developing large copper deposits in the most prolific copper areas in the world
August 4, 2023
Fourth batch of assay results from Haib Copper
The Haib project is a large copper-molybdenum porphyry deposit located in the Karas region of southern Namibia, 8 km from the Orange River and the South African border.
The deposit is a porphyry copper-molybdenum dating from the Archean age. The Haib Cu-Mo deposit is arguably the oldest porphyry deposit in the world, which hosts easily identifiable porphyry veins and alteration. The principal mineralised hosts at Haib are a quartz feldspar porphyry and a feldspar porphyry rock. The main ore mineral at Haib is chalcopyrite, but minor amounts of bornite, chalcocite and the various green copper oxides can also be found.
The deposit hosts a 43-101 an indicated resource of 456.9 MT @ 0.31% Cu equal to 3.12 billion lbs of copper and an inferred resource of 342.4 MT @ 0.29% Cu equal to 2.19 billion lbs of copper at a cut off grade of 0.25% Cu. The resource estimation has been completed by P & E Walker consultancy and Obsidian Consulting Services, both of South Africa.
A Preliminary Economic Assessment (PEA) completed in December 2020 by Mineral Engineering and Technical Services (METS) of Australia has showed very robust economics and that the ore at haib is highly amenable to bio-assisted heap leaching. The financial metrics of one of the model of the PEA are shown in the following table:
| 20 Mtpa @ 80% Cu Recovery + CuSO4 | |||||
|---|---|---|---|---|---|
| LME Cu, tpa | 35,332 | ||||
| CuSO4.5H2O, tpa | 51,081 | ||||
| CAPEX, (US$M) | $341 | ||||
| OPEX, (US$M / year) | $91 | ||||
| Total Cost, US$/t ROM | $7.73 | ||||
| Total Cost, US$/lb CuEq | $1.36 | ||||
| Copper Price, US$/lb | $2.50 | $3.00 | $3.25 | $3.50 | $4.00 |
| Avg. Annual Revenue LME Cu (US$ Million/year) | $195 Million | $234 Million | $253 Million | $273 Million | $312 Million |
| Avg. Annual Revenue CuSO4 (US$ Million/year) | $90 Million | $108 Million | $116 Million | $125 Million | $143 Million |
| Total Cost, USD/t ROM | $7.64 | $7.73 | $7.77 | $7.81 | $7.90 |
| Total Cost, USD/lb CuEq | $1.34 | $1.36 | $1.37 | $1.37 | $1.39 |
| NPV 7.5%, pre-tax (US$ M) | $977 Million | $1,530 Million | $1,807 Million | $2,083 Million | $2,636 Million |
IRR pre-tax | 30.1% | 40.2% | 44.9% | 49.4% | 58.1% |
| Payback Period pre-tax | 4.22 | 3.13 | 2.8 | 2.5 | 2.2 |
NPV 7.5%, after-tax (US$ M) | $611 Million | $957 Million | $1,130 Million | $1,303 Million | $1,648 Million |
IRR after-tax | 22.7% | 29.7% | 32.9% | 36.1% | 42.1% |
| Payback Period after-tax | 5.71 | 4.23 | 3.8 | 3.4 | 2.8 |
| Strip Ratio | 1.41:1 | ||||
| LOM, years | 24 | ||||
Note: The PEA is based only on the estimated indicated resource and the inferred resource are not part of this economic assessment
The PEA focuses on the potential of heap leaching treatment. Several opportunities are identified in the PEA that could significantly enhance the economic return outlined in the report, including infill drilling in the higher grade area to improve the average grade of the deposit, more assays of the molybdenum to be included in future resources estimation and assess the solar power option to reduce power costs. The PEA recommends these opportunities be pursued and to proceed with a feasibility study (“PFS”).
For the recovery of copper from the Haib deposit, heap leaching was considered for all options. The primary reasons for the selection of heap leaching is the low grade nature of the deposit and the vast scale of the orebody. The low costs associated with heap leaching compared to a whole ore flotation circuit is believed to improve the viability of the project. Heap leaching is traditionally performed on oxide material, although there has been increasing development in the application to acid insoluble sulfides.
Previous bio-assisted heap leaching test work, carried out by Deep-South, Mintek, METS and SGS South Africa, have demonstrate the Haib ore can extract high amounts of copper, up to 96% Cu with a sustainable recovery on long term of 80% Cu and 82% Cu. Further test work will be conducted to optimize operating parameters.
The system design proposed will use 3 crushers and one High Pressure Grinding Rollers (HPGR). The process is designed for a 90% availability, processing 20 Mtpa at a strip ratio of waste:ore of 1.41:1.
Mineralization is open near surface and at depth to at least 800 metres deep. The Mineral Resource estimate is based on the results from approximately 66,500 metres of drilling in 196 holes. The most recent drilling data comes from Teck Resources drilling programs totalling 14,500 metres (2010 & 2014) and from re-assaying a part of the 164 historical drill cores which are well preserved on site. Indicated Resources are defined by a drill grid of 150 metres by 150 metres, while Inferred Resources are defined by a drill grid of 300 metres by 150 metres.
The Haib Copper exploration licence provides significant potential for resource expansion, since there is known, but poorly drilled and assayed, mineralisation beyond the drill grid boundaries and below the main mineralised body (which covers some 2 square kilometres of surface area), where a few drillholes from 75m above mean sea level to -350m above mean sea level (i.e. a thickness of 425m) have shown that mineralisation is present. The deepest drillhole did not pass out of mineralised material. In addition, there are 5 satellite mineralised target areas surrounding the main Haib porphyry body which still require further evaluation.
*Cautionary Note: The technical information provided in this fact sheet was reviewed and approved by Vivian Stuart-Williams, Msc, Pr.Sci.Nat, Vice-President Exploration of the Company and a Qualified Person (QP) for the purposes of Canadian National Instrument 43- 101. DISCLAIMER: This fact sheet contains forward-looking statements and forward-looking information (collectively, “forward-looking statements”) within the meaning of applicable Canadian and US securities legislation. All statements, other than statements of historical fact, included herein are forward-looking statements. Information concerning mineral resource estimates also may be deemed to be forward-looking statements. Although Deep-South Resources Inc. (DSM) believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. DSM cautions investors that any forward- looking statements by DSM are not guarantees of future results or performance, and that actual results may differ materially from those in forward looking statements as a result of various factors. All of DSM’s Canadian public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to DSM’s mineral pro.
Deep-South holds the option to acquire up to 80% of three Large Scale Exploration Licences in the heart of the copper belt in Zambia. The Copperbelt province in Zambia is known as one of the most prolific copper belt in the world.
The licenses cover 752 sq. km. in the heart of the Central African Copper belt. The Copperbelt is the world’s largest sediment-hosted stratiform copper province. It includes at least 14 giant deposits. The three Licenses sits on the same side of the Copperbelt which hosts 9 large copper mines.
Zambia offers Excellent infrastructures and the licenses are near power lines. Zambia has a long tradition of mining and is a mining friendly jurisdiction and is very supportive. The President of Zambia recently stated that he will take measures to support the industry to grow the copper production from 800,000 tonnes per year to 3 million tonnes by 2026.
Many major mining companies operate in the country such as Barrick, First Quantum, Rio Tinto, Kobold, Vendanta and Sino Metals.
Zambia Licenses
The Licenses:
Luanshya West project (LEL 23247). The licence is situated in the center of the Zambian Copper belt which forms part of the Central African Copper belt, one of the most prolific copper belts in the world. The Large Exploration Licence covers 5,423.26 hectares (54.24 Sq. Km).
A NI 43-101 technical qualifying report is currently under review by the TSX-V.
The project prospectivity is based on the location of the subject property over the unconformable contact zone between basement granites and Lower Roan Group sediments where most copper belt mines in both Zambia and the Democratic Republic of Congo (the “DRC”) are located. This prospectivity is reinforced by a positive series of coincident soil geochemical anomalies over the contact zone.
The project area is close to established copper / cobalt mines with Chibuluma mine some 35Km to the north-east, Chambishi mine 41Km north-northeast, N’changa mine 53Km north-northwest and Luanshya mine some 40Km east-southeast from the centre of the project area.
Deep-South has recently completed a first successful soil geochemical sampling program that has enabled the identification of 10 large copper anomalies and 13 large cobalt anomalies. 1987 samples were extracted and the 4 highest copper assays were of 634ppm, 602ppm, 568ppm and 506ppm. Peak copper values in Zambian deposits range between 150ppm and 450ppm. The 4 highest cobalt assays were of 558ppm, 282ppm, 179ppm, 174ppm. Peak cobalt values in Zambian deposits range between 50ppm and 170ppm.
Deep-South is currently preparing the next exploration phase, which will be disclosed by the end of August 2023
