Haib Copper

History

coreshackThe Haib deposit has a distinct surface expression with abundant copper staining on fractures and joint planes, particularly in and around the dry river bed of the Volstruis River. This led to German prospectors identifying the deposit around the late 1800s or early 1900s. Small tonnages of high grade copper carbonate ore were mined at this time.

After World War II, the prospect was pegged as claims by prospector Mr. George Swanson who carried out small scale mining and tank leaching operations. Over 6,000 tons of hand sorted high-grade copper ore were sold to the O’okiep Copper Mines, across the border at Nababeep in South Africa, reportedly at grades of up to 18% Copper.

In 1963 - 1964 Falconbridge completed a moredetailed exploration programme looking at the higher grade zones within the Haibdeposit. They drilled some eleven diamond drillholes totalling 1,012 metres of drilling. The average grade of the drillhole intersections was given as 0.33% Cu.

During 1968 - 1969 King Resources of South Africa Pty Ltd conducted a diamond drilling programme of 21 holes totalling 3,485 metres. They examined both lower and higher grade sulphide zones, as well as the higher gradeoxide shear zones.

During 1972 – 1975 Rio Tinto Zinc (“RTZ”) conducted the first extensive and systematic investigation of the Haib deposit. Geochemical and chip sampling surveys were conducted along with IP and Resistivity surveys. They drilled one 120 diamond drillholes totalling 45,903 metres. The cores from this programme are still intact and stored in a core shed on site. RTZ sampled by compositing half cores over 2 metre intervals and submitted these for determination of total copper and where appropriate, oxide copper (acid soluble copper). Composite samples from each drillhole were also tested metallurgically to determine recoverable copper and were assayed for molybdenum, silver and gold indicating average contents of 25 g/t Mo, 0.01 g/t Au, and 0.9 g/t Ag. Tonnage and grade estimates at various cut-offs were made and a conceptual pit design was proposed.

In November, 1993 Rand Merchant Bank Ltd of South Africa acquired an option over the Haib property. Venmyn Rand Pty Ltd., produced a study of the project including compilation ofall the available drillhole and assay records from previous investigations and set up a computerised drillhole database. It was concluded that the increase in the copper price since the 1970’s, development of low cost / high tonnage mining systems and new and refined technologies such as bacterial leaching, solvent extraction and electro-winning combined to create a situation where development of the Haib deposit could represent an economic project; however, no further exploration work was done and work terminated in 1995.

In March 1995, Great Fitzroy Mines NL (“GFM”) and RMB  Mr. George Swanson signed a joint venture called Namibian Copper Joint Venture (“NCJV”). From 1995 to 1999, NCJV drilled a 12 infill holes, drilled 5 geotechnical investigation holes, completed 126 metres of excavation in an adit and two crosscuts for bulk sampling and metallurgical testing and carried out various test works including mining cost audits, bio-leaching studies, and milling and grinding studies. NCJV ran into financial difficulties and work was stopped at the Haib deposit in early 1999.

In 2004, Deep-South Mining Company (Pty) Ltd (Deep-South) was granted the Exclusive Prospecting licence 3140 (EPL) was granted over an area of 74,563.0 ha covering the deposit and a very large surrounding area. This was subsequently renewed in April 2007, 2009, 2011, 2013 and 2015 with the area reduced to 37,000ha after the 2007 renewal.

From 2008, Teck under the option Agreement with DSM has completed a comprehensive exploration programme at the Haib and immediate surroundings. (results discussed in the other sections below).

Location
carte-namibia-title_edit

The Haib copper deposit is in the extreme south of Namibia close to the border with South Africa, which is defined by the course of the Orange River. The deposit lies some 12 – 15 kilometres east of the main tarred interstate highway connecting South Africa and Namibia and the nearest railway station is at Grunau, some 120km north on the main highway. This rail connection could provide access to either the port of Luderitz or to Walvis Bay via Windhoek or to South African ports or facilities via Upington.

 

 

 

Regional Geology

The Haib deposit is located within part of the Namaqua-Natal Province called the Richtersveld geological sub-province which is further subdivided into a volcanosedimentary sequence (locally, the Haib Subgroup), the Orange River Group and the intrusive Vioolsdrift suite which are closely related in space and time. The Orange River Group is composed of sub-aerial volcanic rocks and reworked volcaniclastic sediments; deformation caused displacements along stratigraphic contacts before intrusion of the Vioolsdrift suite. The predominance of andesitic and calc-alkaline magmatic rocks with tectonic compression prevailing throughout the magmatic episode has led to an interpretation of an island-arc model for the region. Recent mass spectrography indicated an age of 1,880 Ma for the volcanics.

The principal mineralised hosts at the Haib are a Quartz Feldspar Porphyry (QFP) and a Feldspar Porphyry (FP) – see Figures 4 and 5 below. The QFP is interpreted as a quartz diorite body which intruded the feldspar porphyry some 1,868 ± 7Ma . The FP is generally interpreted as being part of the suite of andesitic rocks although some workers have suggested that it too, may be partially of intrusive origin. The QFP is elongated along the orientation of the Volstruis Valley, largely coincident with the location and orientation of many of the higher grade intersections within the deposit. The sequence has undergone low grade regional metamorphism to greenschist facies which event has been dated at 1,100Ma. Most of the rock exhibits typical porphyry copper type alteration zones associated with mineralisation. A potassic hydrothermal alteration zone coincides with the main mineralised area surrounded by phyllic and propylitic alteration haloes. Propylitic and sericitic alteration appears to overprint the earlier potassic zones. Silicification, sericitisation, chloritisation and epidotisation are widespread.

location-geology

43-101 Mineral Resource Estimate

A 43-101 Mineral Resource estimate, has been prepared for Deep-South by P & E Walker Consultancy and Obsidian Consulting Services, both of South Africa, in accordance with the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves. The report is dated January 15, 2018.

Table-1: Classified mineral resources of the Haib Project at a 0.25% Cu cut-off grade:

Resource Class xMillion Tonnes Cu(%) Contained Cu x billion lbs
Indicated 456.9 0.31 3.12
Inferred 342.4 0.29 2.19

Notes:

  • Dean Richards of Obsidian Consulting Services, a Member of the Geological Society of South Africa and Professional Natural Scientist (Pr. Sci. Nat) with the South African Council for Natural Scientific Professions (SACNASP), estimated the Mineral Resources under the supervision of Peter Walker of P & E Walker

Consultancy, both of whom are the Qualified Persons for the Mineral Resource Estimates. The effective date of the estimate is January 15, 2018. Mineral Resources are estimated using the CIM Definition Standards for Mineral Resources and Reserves (2014).

  • Reported Mineral Resources contain no allowances for hanging wall or footwall contact boundary loss and dilution. No mining recovery has been applied.
  • Rounding as required by reporting guidelines may result in apparent differences between tonnes, grade and contained metal content.

Table 2. Haib Copper Indicated Mineral Resources, Sensitivity Cases.

%Cu Cut-off xMillion Tonnes Cu(%) Contained Cu x billion lbs
0.20% 904.8 0.27 5.39
0.25% 456.9 0.31 3.12
0.30% 219.8 0.36 1.74

Table 3. Haib Copper Inferred Mineral Resources, Sensitivity Cases.

%Cu Cut-off xMillion Tonnes Cu(%) Contained Cu x billion lbs
0.20% 686.2 0.26 3.93
0.25% 342.4 0.29 2.19
0.30% 109.8 0.34 0.82

This Haib Copper Mineral Resource has been defined by diamond core drilling covering a total surface area of some 2.6 square kilometres. The mineral resource classification is closely related to data proximity. Topographic elevations within the mineral resource area vary from 320m to 640m above mean sea level and average 480m above mean sea level. Indicated resources are constrained between the variable topographic surface and a horizontal level which is 75m above mean sea level and within which the majority of the drill and assay data are constrained. Inferred resources are laterally constrained by the last line of drill holes and extend vertically from the horizontal surfaces defined by the +75m and -350m above mean sea level ( a block of 425m thickness) within which there is a lesser data set derived from drilling.

Mineral Resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. These mineral resource estimates ar based on Indicated Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. However, there is no certainty that these indicated mineral resources will be converted to measured categories through further drilling, or into mineral reserves, once economic considerations are applied. There is no certainty that the preliminary economic assessment will be realized.

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 (see map below), there are 5 satellite mineralised target areas surrounding the main Haib porphyry body which still require further evaluation.

 

Map 1 – The location of the Haib porphyry deposit and satellite targets within the exclusive prospecting licence area.

Qualified Persons

Peter Walker B.Sc. (Hons.) MBA Pr.Sci.Nat. of P & E Walker Consultancy is the main author of the 43-101 resource estimation report and is responsible for the technical part of this press release, and is the designated Qualified Person under the terms of National Instrument 43-101.

Mr. Dean Richards Pr.Sci.Nat. , MGSSA – BSc. (Hons.) Geology, of Obsidian Consulting Services is the contributing author of the 43-101 resource estimation report and is a Qualified Person under the Terms of the National Instrument 43-101.

Preliminary Economic Assessment

A Preliminary Economic Assessment ("PEA") has recently been completed by Mineral Engineering and Technical Services of Australia (“METS”) on the Haib Copper project in Namibia.

Highlights of PEA

Four recovery options were considered for economic evaluation. The best economic outcome is derived by using option 3 which combines an initial ore sorter upgrade with subsequent heap leaching of the upgraded material. All financial metrics are based on the recent 43-101 indicated resource estimation of 456.9 MT @ 0.31% Cu. The salient features of this option are as follows:

Table 1: Option 3 financial metrics

Financial Metric$3.00/lb Cu Price$3.30/lb Cu Price$3.60/lb Cu Price
CAPEXUS$191.8MUS$191.8MUS$191.8M
Total Operating Expense1US$1.41/lb CuEq US$1.42/lb CuEq US$1.43/lb CuEq
NPV 7.5%, pre-taxUS$716.2M (CA$895.3M)US$883.1M (CA$1,103.9M)US$1,049.3M (CA$1,311.6.1M)
IRR pre-tax30.4%34.9%39.2%
Payback Period pre-tax4.2 years3.6 years3.3 years
NPV 7.5%, post-taxUS$463.1M (CA$578.9M)US$567.4M (CA$709.3M)US$671.3M (CA$839.1M)
IRR post-tax23.0%26.1%29.1%
Payback Periodpost-tax5.7 years4.9 years4.4 years
Throughput (Mtpa)8.58.58.5
Annual production lbs / CuEq47 million47 million47 million
Strip ratio2:12:12:1
LOM55 years55 years55 years
1 Variable due to change in absolute royalty payment due to increased revenue

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 more assays of the molybdenum to be included in future resources estimation, sorting technologies enhancing the recovery processing performance and reduced power costs. The PEA recommends these opportunities be pursued and to proceed with a pre-feasibility study (“PFS”).

"By going with heap leach treatment and sorting technologies, we have been able to provide  low capital cost and operating costs and, equally as important, reduce the environmental footprint of the project," said Pierre Léveillé, President & CEO of Deep-South. "The PEA proposes a robust economic return that we expect to enhance during the PFS stage."

Four recovery options were considered for economic evaluation:

Option 1: Ore sorter upgrading, dense media upgrading, flotation and heap leaching of the tails.

Option 2: Two-stage dense media upgrading, flotation and heap leaching of the tails.

Option 3: Ore sorter upgrading and heap leaching of the upgraded material.

Option 4: Whole ore heap leaching.

Table 2: Economic summary for the 4 recovery options

Financial Metric Option 1 Option 2 Option 3 Option 4
Throughput (Mtpa) 8.5
Copper Recovery (%) 77.1 82.1 73.2 80.0
CAPEX ($M) US$221.2 US$250.1 US$191.8 US$220.3
Total Operating Expense ($/lb CuEq) US$1.46 US$1.47 US$1.41 US$1.37
NPV7.5%, pre-tax ($M) US$645.1 (CA$817.6) US$662.6 (CA$828.3) US$716.2 (CA$895.3) US$794.1 (CA$992.6)
IRR pre-tax (%) 25.9% 24.4% 30.4% 29.7%
Payback Period pre-tax 5.0 years 5.3 years 4.2 years 4.3 years
NPV 7.5%, post-tax ($M) US$421.0 (CA$526.3) US$434.3 (CA$542.9) US$463.1 (CA$578.9) US$514.1 (CA$642.6)
IRR post-tax (%) 20.0% 19.0% 23.0% 22.6%
Payback Period post-tax 6.7 years 7.1 years 5.7 years 5.8 years

Options 3 & 4 have shown better economic figures, despite option 3 having a relatively low copper recovery compared to the other options as the use of ore sorting technology has the benefit of reducing the downstream capital requirements. Those two options will be the object of further testwork and a Pre-Feasibility Study (“PFS”).

Option 3 is the case presented in this press release.

Economic Opportunity

METS believes a ramp up to 20 Mtpa as the project is nearing positive cash flow will increase the financial viability. METS have developed a scenario which focuses on option 3 – the best economic option in terms of IRR – in assessing the impact of increasing the scale of the project. The assessment looks at beginning the project at 20 Mtpa, however it is recommended to stage the expansion over a number of years (e.g. start at 8.5 Mtpa, increase to 10 Mtpa and then increase to 20 Mtpa for instance). The following table outlines the key economic outcomes for the larger throughput scenario (using the base case figures – e.g. $3.00/lb copper price).

Table 3: Option 3 at an increased 20 Mtpa throughput

Financial Metric 8.5 Mtpa Scenario ($3.00/lb Cu) 20 Mtpa Scenario ($3.00/lb Cu)
CAPEX US$191.8M US$320.5M
NPV7.5%, post-tax US$463.1 (CA$578.9) US$854.9M (CA$1,061.9M)
IRR post-tax 23.0% 28.6%
Payback Period post-tax 5.7 years 4.5 years
LOM 55 years 24 years

A throughput optimisation study should be performed once a final process design has been selected.

Recovery Method

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. Previous work conducted on the Haib project suggests that a conventional crush-grind-float and sale of copper concentrate is not economically feasible due to the low grade and hardness of the ore – requiring a significant amount of energy for grinding. 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 sighter amenability testwork, carried out by Mintek, METS and SGS South Africa, suggests the Haib material can extract high amounts of copper, up to 95.2% via a bacterial assisted leaching, although additional testwork is required to determine the optimal operating parameters. Given these results there is no reason to suggest the chalcopyrite in the Haib deposit will not be amenable to bacterial assisted heap leaching. The system design proposed will use 3 crushers and an ore sorting system (either on the primary crushed product or the secondary crushed product depending on the technology selected) that will provide higher grade ore to the heaps. The primary crusher will reduce the rock to 127 mm (gyratory crusher), the secondary crusher to 32 mm (cone crusher) and the tertiary crusher to 5 mm (HPGR). The process is designed for a 90% availability, processing over 23,000 tonnes of ore per day (at the 8.5 Mtpa scenario) at a strip ratio of waste:ore of 2:1.

Haib Copper flow sheet diagram:

Molybdenum recovery has been considered for the flowsheet design, although no operating expense, capital expense or revenue has been considered for the economic analysis. The economics of the molybdenum will be assessed once it is included in the indicated resource.

An indicated resource of 456.9 Mt at 0.31% copper at an annual throughput of 8.5 Mtpa would correspond to a 55 year project life. Due to the long project life, it is suggested to start at 8.5 Mtpa and operate at this throughput for approximately 3 years and then execute staged expansions to eventually ramp up to 20 Mtpa, ultimately shortening the project life. As the resource expands and the inferred resource progresses towards measured, then additional expansion to possibly 40+ Mtpa should be assessed. All flowsheets, mass balances, design criteria and equipment lists are based on an 8.5 Mtpa throughput; although financial components have been scaled to provide estimates for the higher throughput scenario.

Mineral Resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. These mineral resource estimates ar based on Indicated Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. However, there is no certainty that these indicated mineral resources will be converted to measured categories through further drilling, or into mineral reserves, once economic considerations are applied. There is no certainty that the preliminary economic assessment will be realized.

Mining Methods

Considering the Haib copper deposit characteristics, the suitable mine design is based on an open pit method. As the deposit is basically composed of hard rock material, the mining operations will involve drill and blast of all excavated material, which will be segregated by cut-off grade.

The mining fleet considered being suitable for the Haib project would most likely consist of between 80 t and 120 t sized hydraulic excavators, off highway dump trucks with a capacity of between 65 t to 90 t, supported by standard open-cut drilling and auxiliary equipment.

Tailings disposal

Option 1 and 2 will generate approximately 250 ktpa tonnes per annum of tailings from the flotation circuit. Due to environmental and water recovery considerations the tailings will undergo dry staking. All options include dry stacking of the iron oxide waste from the iron removal stage (250-500 ktpa depending on the process option). The remaining waste will either be from the ore sorter rejects or from the heap leach pads (~8 Mtpa) and will be coarse rock material. The heaps will remain in place and undergo periodic washing to ensure copper extraction is maximised. Washing will be stopped once the ore is considered ‘spent’. The ore sorter rejects and the spent ore can be disposed of in a manner that produces a suitably stable landform.

Environmental considerations

In terms of environmental aspects, dry stack facilities offer a number of advantages to other surface tailings storage options – some of these include:

  • Reduced water requirements, principally achieved by recycling process water and near elimination of water losses through seepage and/or evaporation;
  • Groundwater contamination through seepage is virtually eliminated;
  • Significant safety improvement with the risk of catastrophic dam failure and tailings runout being eliminated;
  • Easier to close and rehabilitate.

Waste rock storage

It is suggested to consider stockpiling the low-grade ore to process it at the end of mine life, in case the copper price increase considerable by the end of the mine life and/or a new mineral processing technology be created or developed.

Capital Cost

Direct capital costs were estimated at US $ 139.6 million, including off-site infrastructure. Indirect costs and a 10% contingency were estimated at US $ 52.2 million, which bring the initial capital cost to a total of US $ 191.8 million.

Table 7: Capital cost breakdown

Cost (US$M) Option 3
Crushing & HPGR 56.2
Agglomeration & Heap Leaching 12.4
Copper Recovery 32.1
Iron Removal 1.8
Water 2.8
Reagents 1.6
Services 2.0
Sulphuric Acid Production 22.0
Supporting Infrastructure 2.8
First Fill 6.0
Working Capital 14.0
Insurance 3.3
EPCM 14.0
Contingency 14.0
Commissioning 2.8
Accommodation & Temp Services 2.8
Spares & Tools 1.5
Total (US$M) 191.8

Operating Costs

Total operating costs, including capital leases as an operating expense, are estimated in the PEA as US $ 7.79 per tonne of ore processed, broken down as follows:

Table 7: Option 3 operating cost breakdown

Area Annual Cost (‘000 USD) Unit Cost (USD/t ROM) Unit Cost (USD/lb CuEq)
Mining 19,210 2.26 0.41
Processing 38,696 4.55 0.82
Product Freight 2,109 0.25 0.04
Wharfage & Shiploading 234 0.03 0.00
Administration 1,700 0.20 0.04
Royalty 4,224 0.50 0.09
Total 66,173 7.79 1.41

Sulphur Burning Plant

The design for each option as it stands involves the burning of sulphur to produce sulphuric acid.

There are several possibilities for sulphuric acid sourcing, including purchasing from smelters within Namibia.

Buying in sulphuric acid at the start of the project life and building a sulphur burning plant once the project is cash flow positive may provide a better economic scenario.

This will allow for the sulphur burning plant capital to be deferred and the payback period to be shortened.

Risks

Aside from the usual risk associated with the advancement of a mineral project towards a production decision, such as metal prices, resource continuity, mineability, construction risk, capital and operating cost risk, the principal risk related to the Haib Copper Project is the confirmation of the heap leaching recovery and sorting technologies used in the PEA, which were based on preliminary testwork completed by University of Witwaterstrand, Mintek, METS and SGS South Africa. Additional testwork is required to confirm and potentially enhance the overall recovery performance of the project.

The major risks identified are detailed in the below list:

1- Insufficient metallurgical testwork has been undertaken.

Sampling of diamond core, ore sorting testwork, comminution, HPGR, heap leach tests are required;

2- Trade off studies are required regarding purchasing sulphur and making acid on site or purchasing sulphuric acid;

3- The optimum port and infrastructure needs further study work;

4- Specific mineralization sorting testwork success will be critical;

5- Variability within the deposit and;

6- Optimised transport routes.

Opportunities

Solar Energy: Given the semi-arid climate of Namibia, a solar energy farm may be an option for reducing the unit cost of power. This will also have positive social impacts for the project, which is expected to have a long life.

Project Expansion:

The resource tonnage allows for possible multiple expansion stages to be executed should the project proceed to once in production. A staged approach is recommended in order to de-risk the project by projecting that the project achieves positive cash flow prior to plant expansions.

Qualified Persons

Damian E.G. Connelly, BSc (Applied Science), FAusIMM, CP (Met), Director of Mineral Engineering Technical Services is the main author of the Preliinary Economic Assessment report and is responsible for the technical part of this press release and is the designated Qualified Person under the terms of National Instrument 43-101.

Recent Exploration Programs and Results

 As the operator of the project from 2010 to 2016, Teck took a more regional view of the project than previous operators. Their exploration objective was to provide the required data to show that the deposit had potential for large-scale mining, particularly if the tonnage or grade, or both, could be improved and that early stage mining could exploit sufficient high-grade mineralization to improve the economics of mining. They started a new exploration program both to investigate the open ended parts of the deposit (deep drilling and extension drilling) and to explore for new, undiscovered outlying mineralization. This had not been previously attempted.

Following this model, from 2008 to date, Teck have completed the following work:

  • A regional stream sediment sampling program collected 276 samples aiming to sample all first and second-order streams every 300m-500m over an area of 320sq.km. This led to the discovery of four adjacent anomalous zones spaced some 2km from the main Haib mineralization;
  • A total of 32 diamond drillholes totaling 14,252 metres. These were drilled within the historically defined main mineralization and on the Eastern, Southern and Western anomalies;
  • Using the Anaconda mapping method, which maps in detail the lithology, alteration, vein type, orientation and intensity on separate overlays, they have mapped about 75% (205 ha) of the area around the 275 ha. Main deposit (at a scale of 1:10,000) and all (90 ha.) of the main deposit at 1:2,000 scale;
  • They have re-logged all of the available (108 out of 120) old RTZ drillholes in detail, again using the Anaconda method. These were all located within the Main Haib deposit.
  • They have re-sampled 14 of the old RTZ drillholes to compare the assay results obtained by RTZ for copper and also to determine the grade of gold, silver and molybdenum.
  • They completed some 83 line kms. of pole-dipole Reconnaissance Induced Polarization (RIP); and another 6 line km. of Audio Magnetotellurics (AMT).
  • They have taken 636 soil samples on grid lines 150m apart with sample spacing of 50m covering an area of 400 hectare across three of the satellite targets.
  • They have constructed a 3-D geological model of the Main Haib zone. This model combines all the surface and down hole geology, assays and geochemistry to constrain the grade envelope in a future resource estimate.

Recent Drilling Results

2010201120122014
121m @ 0.5% Cu &
0.027% mo
39m @ 0.53% Cu &
0.02% Mo
32m @ 0.79% Cu &
0.01% Mo
25m @ 0.66% Cu &
0.019% Mo
494m @ 0.36% Cu &
0.018% Mo
45m @ 0.53% Cu &
0.002% Mo
30m @ 0.81% Cu &
0.007% Mo
53m @ 0.41% Cu &
0.012% Mo

Exploration and Development Focus

The results of the previous exploration programs have showed that the resources could be expanded by drilling under the current mineral resource and into 5 newly discovered satellites to the main body. Furthermore, the results from the recent Preliminary Economic Assessment (PEA) have been promising and METS recommends to Deep-South to conduct a Pre-Feasibility Study (PFS) as the next phase of the project.

Deep-South plans to start the PFS during Q2 2018, which will include drilling in the main body to increase the level of the resource to measured or probable reserves, metalurgical and process technologies tests and enviromental studies.

Management hopes the outcomes of a Pre-Feasibility Study for the Haib Project will support the following:

  • An assessment of the likely technical and economic viability of the opportunity within a 25% level of accuracy;
  • Optimization of the different mining, process, location and project configurations to determine and recommend the preferred optimum to be engineered during the Pre-Feasibility Study;
  • Evaluation of the project at different capacities;
  • Determination of any fatal flaws in the opportunity;
  • Development of the risk profile of the opportunity in relation to the key business drivers;
  • Determination of the nature and extent of the Work Plan to complete further geological, mining, metallurgical, environmental and marketing work needed to be completed or undertaken during the Feasibility Study;
  • An estimate of the costs, schedule and resources required to complete the Feasibility Study.  In addition, an overall project schedule shall be prepared to indicate the overall timing of project implementation, commissioning and start-up, and ramp-up to full production;
  • Identify resources (internal and external) and services required to undertake further work on the opportunity;
  • If a Pilot plant is required, it will be implemented during this stage;
  • Upgrade the mineral resource (if required);
  • Stakeholder considerations and plans;
  • Risk assessment further refined and mitigation plans established and;
  • Environmental assessment to prepare an environmental impact study.

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. Oxidation is very shallow, usually less than 30m, and sulphides are common at surface.

The deposit, discovered in the 1950’s, has seen over 50,000 metres of drilling in the 1970’s by companies such as Rio Tinto and Falconbridge Ltd.

Since 2010, Teck Namibia completed over 14,000 metres of drilling with results such as: 121 m @ 0.5% Cu, 494 m @ 0.36% Cu and 30 m @ 0.81% Cu.

The deposit has a Historic Estimate of 1.3 Bt @ 0.22% Cu including 244 Mt @ 0.37% Cu (Stuart-Williams 2004). There are no Mo assays for this resource estimate. The deposit is roughly 2 km long and 1 km wide, and extends from surface to over 800m deep but only the top 400m was used for the resource estimate;

A report from Behre Dolbear, completed in 1996, has estimated the Historical Estimates at Haib in a range presented in the table below:

Haib Historical Estimate - Behre Dolbear / GSM
Cut-off
(%Cu)
GFM ModelBehre Dolbear’s Model
KrigingInverse Distance SquaredNearest Neighbour
Million TonnesGrade % Cu
Million TonnesGrade % Cu
Million TonnesGrade % Cu
Million TonnesGrade % Cu
0.113500.2313530.2313310.2311840.25
0.27300.287390.297260.296300.34
0.32300.372440.372620.382920.46

GFM and Behre Dolbear models used the Kriging method as the basis for their estimate calculations. Kriging is a statistical estimation technique widely used for porphyry deposits. The other methods used by Behre Dolbear were used for validation of the estimates.Behre Dolbear report was produced from a geostatistical block model completed 1996 by Great Fitzroy Mineral by (“GFM”). The Historical Estimate comprised principally the compilation and verification of the all drillhole data incorporating all available data to the end of the Rio Tinto Zinc programme completed in 1975 and comprising over 50,000 metres of drilling.

 

The estimates of tonnages and grades quoted in this report were prepared prior to publication of National Instrument 43-101 in 2001 and are considered as Historical Estimates. The historical grades and resources terminology from the original historical reports are to be used only as a reference and should not be considered as a current mineral resource under NI 43-101 but are to be considered as Historical Estimates as per the NI 43-101 Rules and Policies.