KEFI Gold and Copper plc (LON:KEFI), the gold and copper exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, has announced an update to the Mineral Resource Estimate (“MRE”) at the Hawiah Copper-Gold Project, part of the KEFI-operated Saudi Arabian joint-venture Gold and Minerals Limited.
Highlights
· Hawiah Mineral Resource Estimate has increased by 5.6 million tonnes (“Mt”) to 24.9 Mt at 0.90% copper, 0.85% zinc, 0.62 g/t gold and 9.81 g/t silver, representing a tonnage increase of 29%.
· The total contained metal content now stands at 223,000 tonnes of copper (up 33% from 168,000 tonnes), 210,000 tonnes of zinc (up 34% from 157,000 tonnes), 497,000 ounces of gold (up 42% from 349,000 ounces) and 7.8 million ounces of silver (up 22% from 6.4 million).
· An upgrade in key areas from the previous Inferred category Mineral Resource with 10.9Mt now an Indicated category Mineral Resource at 0.96% copper, 0.86% zinc, 0.64 g/t gold and 9.98 g/t silver, paving the way for the completion of the Preliminary Feasibility Study (“PFS”) in 2022.
· Total Mineral Resource (Indicated and Inferred) reporting to the Open-Pit Scenario have increased from 0.1 Mt to 8.4 Mt, raising the possibility of an initial open-pit mining operation and a lower start-up capital requirement.
· The Hawiah deposit remains largely open at depth and drilling programmes are commencing in January 2022 with a view to further increasing the Hawiah Mineral Resource, raising the likelihood of further increases to the MRE in 2022.
Harry Anagnostaras-Adams, Executive Chairman of KEFI, commented:
“The updated Mineral Resource Estimate for the Hawiah Copper-Gold Project achieves our key objectives: a tonnage increase of approximately 30% and a slightly higher overall increase in metal content due to overall improved grades, plus 10 million tonnes of the total of 25 million tonnes is now classified as an Indicated Mineral Resource, facilitating the estimation and reporting of initial Ore Reserves as part of the Preliminary Feasibility Study for potential development.
“In addition, we are also pleased to report that the Mineral Resource reporting to the Open-Pit Scenario have increased from the 0.1 Mt reported in 2020 to a total of 8.4 Mt at 0.93% copper 0.72% zinc, 0.74 g/t gold and 10.05 g/t silver. This presents as a clear opportunity for lower cost development during the early years of the Project, further strengthening the economic case.
“KEFI now has a platform of three advanced projects for development in the next few years: the Tulu Kapi Gold Project in Ethiopia which is development ready for when security and other normal conditions precedent to finance closing are satisfied; the now larger Hawiah Copper-Gold Project in Saudi Arabia; and the Jibal Qutman Gold project, also in Saudi Arabia. The Hawiah work programme will also incorporate the previously announced works that will start at the proximal Al Godeyer licence granted to G&M in December 2021. This could also be a significant potential contributor.
“We are very pleased with the updated Hawiah MRE and the priorities for the field work in Saudi Arabia will be determined this month and then commenced immediately.”
Background
Following the commencement of major exploration works at the Hawiah Copper-Gold Project (“Hawiah”) in early 2019, KEFI announced in August 2020 a maiden MRE of 19.3 Mt at 0.87% copper, 0.81% zinc, 0.56 g/t gold and 10.25 g/t silver.
Diamond drilling has since continued with an additional 29,892m completed, bringing the Project total to 41,841m. This latest drilling had three main objectives:
– Upgrade existing resources in key areas of the deposit to Indicated category classification for use in the PFS for potential development;
– Expand the known resource areas to increase the global tonnage; and
– Increase drilling density within the copper-rich Transition Zone to demonstrate grade continuity and allow for better evaluation of an open-pit scenario.
Following the conclusion of the 2021 drilling programme, G&M appointed SRK Consulting (UK) Ltd (“SRK”) as the Independent Consultants and Competent Person for the preparation of the updated MRE for the Hawiah Project. This MRE is reported in accordance with the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves, The JORC Code, 2012 Edition (“JORC Code 2012”).
The G&M geological team have been pleased with the results of the programmes, having achieved all its objectives and with the deposit remaining open are confident that despite already presenting as a robust multi-commodity deposit, the Hawiah deposit has additional potential for further expansion.
Work programmes including reverse-circulation and diamond drilling are now being finalised to help define additional near surface material to expand the MRE and to finalise the PFS in 2022. These programmes are alongside the exploration commencing in January 2022 at the recently granted proximal Al Godeyer Exploration Licence, which is also very prospective for volcanic massive sulphide (“VMS”) mineralisation.
Updated Hawiah MRE
The updated MRE for the Hawiah deposit is detailed in Table 1 below and now the total stands at:
– 24.9 Mt at 0.90% copper, 0.85% zinc, 0.62 g/t gold and 9.81 g/t silver.
Resources are classified as:
– Indicated – 10.9 Mt at 0.96% copper, 0.86% zinc, 0.64 g/t gold and 9.98 g/t silver
– Inferred – 14.0 Mt at 0.85% copper, 0.83% zinc, 0.61 g/t gold and 9.67 g/t silver
Based on this resource the Hawiah Project is estimated to contain a total of 223,000 tonnes or 491 million lbs of copper, 210,000 tonnes or 463 million lbs of zinc, 497,000 gold ounces and 7.84 million silver ounces.
Table 1 : SRK Mineral Resource Statement for the Hawiah Project,
Effective Date 16 December 2021 (see notes 1,2,3,4,5,6,7)
| Mineral Resource | Mining | Material Type | Million Tonnes (Mt) | Grade | Metal Content | ||||||
| Classification Category | Type | Cu (%) | Zn (%) | Au (g/t) | Ag (g/t) | Cu (kt) | Zn (kt) | Au (koz) | Ag (koz) | ||
| Sub-Total Indicated | Open-Pit | ALL | 7 | 1.03 | 0.78 | 0.66 | 10.03 | 72 | 55 | 149 | 2,271 |
| Underground | ALL | 3.9 | 0.83 | 1 | 0.61 | 9.89 | 32 | 39 | 76 | 1,230 | |
| ALL | ALL | 10.9 | 0.96 | 0.86 | 0.64 | 9.98 | 104 | 94 | 225 | 3,501 | |
| Sub-Total Inferred | Open-Pit | ALL | 1.4 | 0.43 | 0.41 | 1.17 | 10.14 | 6 | 6 | 52 | 446 |
| Underground | ALL | 12.6 | 0.89 | 0.88 | 0.55 | 9.61 | 113 | 111 | 221 | 3,892 | |
| ALL | ALL | 14 | 0.85 | 0.83 | 0.61 | 9.67 | 118 | 116 | 273 | 4,338 | |
| Total | Open-Pit | ALL | 8.4 | 0.93 | 0.72 | 0.74 | 10.05 | 78 | 61 | 200 | 2,717 |
| Underground | ALL | 16.5 | 0.88 | 0.91 | 0.56 | 9.68 | 145 | 149 | 297 | 5,122 | |
| ALL | ALL | 24.9 | 0.9 | 0.85 | 0.62 | 9.81 | 223 | 210 | 497 | 7,839 |
Notes on SRK Mineral Resource statement:
(1) Mineral Resources are not Ore Reserves and do not have demonstrated economic viability.
(2) All figures are rounded to reflect the relative accuracy of the estimate and have been used to derive sub-totals, totals and weighted averages. Such calculations inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur, SRK does not consider them to be material.
(3) G&M is a joint venture partnership between ARTAR and KEFI. The Exploration Licence is held by ARTAR, under the terms of the G&M Joint Venture agreement. ARTAR currently has a 68% share of the Project, with the remainder (31.2%) owned by KEFI, where KEFI is the operating partner. The MRE is given on 100% basis.
(4) The standard adopted in respect of the reporting of Mineral Resources for the Project is in accordance with the guidelines of the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code).
(5) SRK reasonably expects portions of the Hawiah deposit to be amenable to both underground and open-pit mining methods:
a. Open pit Mineral Resources include the oxide, transition and fresh material/domains, reported within an optimised open-pit shell and reported based on a Mineral Resource Net Smelter Return (NSR) cut-off of USD12/t for oxide and USD20/t for transition and fresh. Open-pit slope angles within the oxide were defined from geotechnical parameters provided by G&M and their Advisors and set to 43° in the oxide, 46° in the transition and 52° in the fresh. A revenue factor (RF) of 0.8 of the Mineral Resource commodity prices was used for selecting the final MRE open-pit shell used for reporting, as this is likely to be closer (compared with RF1.0) to the potential Ore Reserve-case pit design that will be developed as part of G&M’s PFS study. The Mineral Resource is not sensitive to reporting by mining methodology.
b. Underground Mineral Resources are constrained to the transition and fresh domains, reported from within an underground reporting volume derived from underground stope optimisation wireframes (with 2m minimum mining width, and appropriate stope dimensions) and a NSR cut-off which considers mining, processing and G&A costs and 15% total dilution, totalling USD54/t for both transition and fresh material. Oxide material is currently excluded from the underground Mineral Resource reporting due to it being close to surface, its highly-weathered nature and associated uncertainty with respect to geotechnical stability during underground mining.
(6) The Mineral Resource NSR cut-off calculation has been determined based on metal price forecasts*, metallurgical testwork results and assumptions **, mining costs, processing costs, general and administrative (G&A) costs, and other NSR factors. The final Mineral Resource NSR calculation is based on average assumptions for the deposit and applied using the following formulae:
a. Mineral Resource NSR (USD) for oxide material = (CU_PCT*0) + (ZN_PCT*0) + (AU_PPM*43.6528) + (AG_PPM*0.1217)
b. Mineral Resource NSR (USD) for transition and fresh material = (CU_PCT*71.9407) + (ZN_PCT*14.4408) + (AU_PPM*41.7501) + (AG_PPM*0.6582)
* Metal price forecasts (with appropriate uplift for assessing Mineral Resources) considered for the calculation of Mineral Resource NSR (USD): Gold (USD1,820/oz), Silver (USD26/oz), Copper (USD9,200/t), Zinc (USD3,000/t).
** Resource NSR cut-off calculations assume average metallurgical recoveries of Copper (0%), Zinc (0%), Gold (75%), Silver (15%) for oxide, and Copper (92%), Zinc (71%), Gold (74%), Silver (84%) for transition and fresh (sulphide) material.
(7) Initial metallurgical testwork has been completed for the transitional and fresh (sulphide) mineralisation at Hawiah, comprising flotation and cyanide leach methods. No metallurgical testwork results are available for the oxide mineralisation; however, metallurgical parameters have been approximated based on similar deposit types/styles located within Saudi Arabia and SRK’s experience. Once additional testwork is completed, if the metallurgical recovery results change significantly from the current values, this would impact the parameters used to report the Mineral Resource, which, in turn, could also impact the tonnages and grades considered to have ‘reasonable prospects for eventual economic extraction’ for reporting in the Mineral Resource Statement.
Mineral Resource Estimation comparison and future expansion
The updated MRE represents a significant increase to the tonnage from 19.3 Mt to 24.9 Mt, an increase in copper and zinc grades from 0.87% Cu to 0.90% Cu and from 0.81% Zn to 0.85% Zn, an increase in gold grade from 0.56 g/t Au to 0.62 g/t Au and a reduction in silver grade from 10.3 g/t Ag to 9.8 g/t Ag (Table 2) .
Table 2 – 2020 MRE and Updated MRE comparison – Grade and Tonnage.
| 2020 MRE | Updated MRE | Difference (%) | |
| Tonnage (Mt) | 19.3 | 24.9 | +29% |
| Copper (%) | 0.87 | 0.9 | +3% |
| Zinc (%) | 0.81 | 0.85 | +5% |
| Gold (g/t) | 0.56 | 0.62 | +11% |
| Silver (g/t) | 10.25 | 9.81 | -4% |
The additional resource tonnage is largely driven by:
– expansion of the Camp Lode at depth
– expansion of Crossroads Extension at depth
– inclusion of a greater portion of the oxide material based on updated optimisation parameters used to generate the open-pit Resource open-pit shell
As predicted by the geological model, the depth extension of the Camp Lode portion of the orebody has an elevated copper grade, on average 1.2% Cu, making it the highest copper grade area outside of the copper enriched transition zones. The final and deepest drillhole into the mineralisation within this area (HWD 092) intersected 5.45m (estimated true width of 4.4m) at approximately 1.6% copper, demonstrating that this high-grade area of the Hawiah deposit remains open at depth (down plunge) in the Camp Lode.
Whilst the lower limits of the Crossroads Extension present with a lower average copper grade, when combined with the zinc, gold and silver grades, this results in the majority of the additional mineralisation defined in this area of the Hawiah deposit reporting to the underground Mineral Resource reported under the parameters of the resource estimation model (and underground stope optimisation), again demonstrating the potential for expansion in this area.
The early phases of exploration in 2022 will focus on resource definition within the Central Zone portion of the orebody (see Figure 1 in Appendix B), where only limited drilling has currently taken place, as well as resource classification upgrade drilling within the oxide portions of the deposit to aid with the open-pit study as part of the PFS.
Open-Pit Scenario
G&M is also pleased to report that the Mineral Resource reporting to the Open-Pit Scenario have been expanded from the previous 0.1 Mt reported in 2020 to a total of 8.4 Mt at 0.93% copper 0.72% zinc, 0.74 g/t gold and 10.05 g/t silver (see Figure 2 in Appendix B).
This presents as a clear opportunity for lower cost development during the early years of the project, further strengthening the economic case. This Open-Pit Scenario will be fully evaluated during the PFS. Drilling programmes are set to start in January 2022 to increase drilling density in the areas of the Inferred Resource that report to the Open-Pit Scenario.
