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Starter Project

The Starter Project, constructed between 2019 and 2021, will produce more than 155,000t of copper silver concentrate at 38-42% copper and 375 g/t silver content, containing some +60kt of copper and +2m ounces of silver metal annually. First concentrate was produced in June.

The estimated mine life of this Project is 22 years, based on currently drilled mineralisation, with C1 cash costs over the life estimated at approximately $1.30 per pound* of copper and $1.75* per pound on an all-in sustaining basis. Total direct capital cost is forecast at approximately US$410m, offering a capital efficiency of $6800/annual tonne of copper. These attractive unit cost metrics reflect the high grades of the orebody, its ideal geometry for highly productive mechanised mining, and access to a brownfields process plant and newly constructed and reliable infrastructure.

The Starter Project, which is fully permitted and funded, involves the development of the 3.65Mtpa mine at Zone 5 (3 mining corridors producing on average 1.2Mtpa of ore each) and the refurbishment and enhancement of the Boseto processing facility. The construction programme was completed in July 2021. The mined ore is trucked approximately 35 kilometres from the Zone 5 mine to the Boseto processing facility on a purpose built, fully sealed bitumen haul road, with a separate access road for light vehicles.

Power is being sourced at 132kV from the Botswana Power Corporation grid via a 50-kilometre overhead transmission line connection. Existing diesel generation capacity from the previous Boseto operations is being used as backup power. Water is being supplied from two wellfields, at Boseto (existing refurbished) and Haka (new development including 40km of underground pipeline from Haka to Zone 5), along with dewatering boreholes from the mine at Zone 5.

In 2019, Khoemacau secured $650 million in funding for construction and early operation of the Starter Project, exploration, drilling and early expansion studies, and to refinance pre- construction debt funding raised in 2016. This funding was a combination of debt, precious metal streaming and equity. It cements Khoemacau's strong balance sheet in order to deliver the +60ktpa Cu producing Starter Project securely to full production while looking towards the future with the Company’s expansion opportunities.

* net of silver credits at consensus pricing

Geology

Zone 5 has a deposit strike length of 4.2km with mineralisation dipping at 56 degrees to the south-east over an average thickness of 10m. Mineralisation is situated in the hanging wall sequence, 30m above the contact between the D'Kar Formation and Ngwako Pan Formation. Mineralisation is sub-parallel to lithology and typically cross-cuts host units from the lower D’Kar limestone unit in the south-west to the carbon rich siltstone unit and interbedded alternating siltstone and sandstone unit toward the north-east. The host rock assemblage is sandwiched between two competent sandstone units; the footwall Ngwako Pan quartzite sandstone and the hanging wall Marker sandstone. The down dip extension of mineralisation has been drilled to a maximum depth of 1,200m vertically below surface. The deposit remains open at depth (down dip) and partially along strike.

Mineral boundaries were interpreted to distinguish areas that comprised overburden, oxide plus sulphide minerals and sulphide-only assemblages. The near surface mineralised zone was identified as a transitional sulphide zone that contained both oxide and sulphide minerals. The boundary between this zone and the sulphide only undulates parallel to topography between 60 and 80m depth below the surface. This boundary was defined by acid soluble copper and total copper ratios, logged drill core and recorded specific gravity values. Common minerals found in this zone, in order of abundance, include malachite, bornite, chalcopyrite, native copper and minor chrysocolla. A small zone of deeper oxidation, with mineralisation consisting dominantly of native copper, is located in the centre portion of the deposit. This area shows strong brecciation and extends to depths of 400m below the surface.

Economic mineralisation consists of massive bornite and chalcocite with accompanying chalcopyrite and silver. Locally, secondary massive chalcocite has replaced bornite in the Central portion of the deposit at the forereef slope. These minerals are largely vein hosted and make up the greater than 1.0% Cu grade domain. The mineralisation is hosted within an extensive system of quartz and quartz carbonate veins, shears and cleavages. Parallel and sub-parallel shearing continues for hundreds of metres and are likely influenced by subtle changes in lithology and structure. Within the more competent units, shearing is replaced by brittle deformation, generally in the form of brecciation.

Localised parasitic folds, thrusts and shears have thickened the mineralisation and repeated the stratigraphy resulting in enhanced copper and silver grades over very wide intervals. Structural data in the NE portion of the deposit suggests a gently plunging fold toward the south-west. The fold is overprinted in the centre portion of the deposit by a vertically plunging facies change. These two areas have the highest grades and thickest intervals.

Please also refer to the exploration section that provides more detail on the regional geology.

Mining

An Owner’s team was recruited for the Zone 5 mine design phase and this team has progressively been expanded to incorporate Owners’ Operations including Mine Technical Services, Production Supervision and Contract Management, Safety Assurance and Quality Management. Mine construction, development and stoping is being undertaken utilizing Barminco Mining Services (a member of the Perenti Group).

The Zone 5 mine is a bulk mechanised mine, designed for a total production rate of 3.65Mtpa through three (3) mining corridors, with a single mining corridor production rate between 1.0Mtpa to 2.0Mtpa. The ore is transported to surface via a truck haulage system. The mine design is based on a Long Hole Open Stoping (LHOS) mining method. The first section of the mine incorporates pillars and no pastefill, and then as depth increases pastefill will be used to improve overall resource recovery.

Stope production has been designed around the use of 9m3 (21 tonne) loaders and 60 tonne haul trucks. In the mining areas, in specially designed truck loops, the loaders transfer the ore from the ore passes to the trucks. Given the current depth of the known mineral resource, trucking was deemed the most practical and the least capital-intensive option. From the loading points, the trucks travel up the decline(s) to the surface for dumping of the ore at the Run Of Mine (ROM) pads.

Zone 5 overall layout [chart]
Zone 5 overall layout

Given that the orebody has a strike length of more than 4km, it necessitated dividing it up into mining corridors due to the mining method selected, with twin decline systems dedicated to servicing each corridor. (the North Corridor starts as single decline.) The twin decline layout allows for more than 1,000m coverage of strike extent of the orebody, while offering multiple orezone attack points, highly productive layouts, and significant redundancy.

Surface access, through unconsolidated surface sands, to each of the 3 corridor decline systems is achieved through 3 boxcuts, which have dimensions 850 to 900m long, 400 to 450m wide and 52m deep, requiring excavation of 1.3million m³ of material per boxcut.

The decline profile has been designed at 6m x 6m to permit the passage of the largest fleet item, the haulage trucks, as well as for ventilation requirements, while maintaining required and statutory stand-off distances to the excavation walls and associated intermittent construction services (air, water, pumping, power, communications, and secondary ventilation) prior to being repositioned to the independent permanent infrastructure positions. An ergonomic style decline configuration with a minimum radius of 25m has been designed to provide optimal access to levels spaced 25 vertical metres apart, while also allowing trucks to operate at a safe productive speed when travelling up and down the decline. The downward gradient has been designed at 1:7 to maximize the capability of the haulage fleet whilst minimizing decline length per vertical metre.

Typical Level Layout Twin Decline Arrangement [map]
Typical Level Layout Twin Decline Arrangement

The level intervals for the LHOS area have been designed at 25m vertical floor to floor based on a maximum accurate production drill hole lengths of approximately 30m. The flat level access is a horizontal drive that marks the beginning of a mine level, linking the decline access to the ore drive. Level accesses have been designed at 50m vertical intervals, however, this increases to 60m when passing the sill pillar locations. From the flat level access, access drives are inclined and declined to intersect the orebody on the 25m vertical level spacing where ore drives will be developed and utilized for stoping. The declines and associated orebody accesses have been positioned on the centroid of the corridors to maximise the corridor’s productivity.

The development status as of July 2021 is shown in the following orthogonal diagrams of the boxcuts, waste and ore development for each corridor:

North Corridor - Current and planned (2 year) waste & ore development[map]
North Corridor - Current and planned (2 year) waste & ore development
Central Corridor - Current and planned (2 year) waste & ore development  [map]
Central Corridor - Current and planned (2 year) waste & ore development
South Corridor - Current and planned (2 year) waste & ore development  [map]
South Corridor - Current and planned (2 year) waste & ore development

Click on the YouTube clips below to view the Zone 5 isometric views of the actual development and planned Mine design:



Metallurgy and Processing

The Boseto sulphide concentrator was upgraded from its original 3.0 million tonnes per annum nameplate capacity, to 3.65 million tonnes per annum to treat the Zone 5 ores. The ores respond well to conventional sulphide flotation, producing approximately 155,000 tonnes of high-grade copper concentrate at 40% Cu and 375g/t Ag. The concentrate will be road hauled to port, for shipping and sale on the international market.

Boseto process plant design criteria summary

Operating Basis UnitBoseto Plan Upgrade
Nominal Annual Dry Throughput   t/a 3,650,000
Crushing Normal Throughput t/d 10,000
Milling Mill Feed Size (F80) mm 15
  Grind (P80) um 106
  Nominal Throughput t/d 10,000

The Boseto Processing Facility was volumetrically expanded to process 3.65Mtpa of sulphide copper ore, and metallurgically upgraded to cater for the Zone 5 ore characteristics.

This full extent of the upgrade will be achieved through the following:

  • Modification to the ROM hopper to allow for direct unloading of 140t net payload road haul trucks.
  • Refurbishment and repairs to the existing primary crusher.
  • Replacement of the scalping and product screens.
  • Reconfiguration of the rougher and scavenger circuits to utilise overall capacity on sulphide floatation only.
  • Replaced the original regrind mills with an ultrafine regrind unit (Outotec HIG mill).
  • Replaced the original Cleaner 1 and 2 tanks cells with new Jameson pneumatic cells.
  • The original plate and frame filter replaced with a Larox vertical pressure filter.
  • Installed a new concentrate thickener and reconfigured and upgraded one of the existing concentrate thickeners.
  • Installed a high capacity manual bagging plant to facilitate concentrate bagging.
  • Upgraded compressed air, electrical and services throughout the plant.
  • Installed a new 50l/s RO plant
  • Installed a 20Ml raw water dam to feed the processing plant.

General upgrade to improve the condition and operability of the plant.

Process flow diagram for the proposed plant upgrade

3D modelling design tools were adopted to model the required modifications to the flotation circuit, addition of a new ultrafine regrind mill and two (2) new pneumatic cleaner cells.

Infrastructure

A full Owner’s Execution team was recruited and Fluor Daniel (Botswana) Ltd appointed to fulfil the EPCM role for the non-mining aspects of the Project. The infrastructure and processing facility detailed design, engineering and procurement for the Starter Project was undertaken from mid 2017 through to Q4 2019 with early works commencing in October 2019 and full construction from February 2020 to June 2021.

The project scope for infrastructure included:
  • Zone 5 Boxcuts
  • Mine Surface Infrastructure inclusive of workshops, stores, offices, change-house, emergency centre, security, 650-person accommodation camp, internal roads and terraces.
  • Underground mine water management (both return and supply water) inclusive of surface water dams, pipeline reticulation, pumping and storage tanks.
  • Establishment of a Zone 5 6MW diesel power station, for initial mining operations supply and later for emergency backup supply, utilisation existing on site diesel generators.
  • Site wide 11kV power reticulation.
  • Site wide Fibre optic and copper ethernet communication networks with servers, personal computers and software solutions
  • Zone 5 4G cellular communications
  • 32km of bitumen sealed Access and Haul roads from Zone 5 to Boseto
  • Haka wellfield, 40km of buried pipeline from the wellfield to Zone 5, associated reservoirs and raw water distribution network.
  • 50km of 132kV transmission line with two 132/11kV 2*25MVA substations
  • Boseto Processing plant volumetric and metallurgical upgrade and refurbishment and Boseto Tailings Storage Facility upgrade.
  • Boseto wellfield upgrade.
  • Toteng Nhabe River bridge upgrade.

The construction was completed in June 2021 and the 1st concentrate produced the same month..

Discovery to Production Timeline for Zone 5

Typical Level Layout Twin Decline Arrangement [map]


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