Caravel boosts production scale of WA copper project following process review
The review led to a refined flowsheet, which has boosted the Caravel project’s expected production, cash flow and NPV.
Copper developer Caravel Minerals (ASX: CVV) will increase the scale of its namesake copper project in Western Australia’s Wheatbelt following an independent review of its metallurgical process flowsheet.
Specialist engineering and project delivery firm Lycopodium Minerals and Orway Mineral Consultants completed the three-month review, which identified “substantial opportunities” to enhance project value.
Following the review, a revised process flowsheet has been developed and will be incorporated into the definitive feasibility study (DFS), which is scheduled for delivery in the first half of 2024.
Caravel managing director and chief executive officer Don Hyma said the key outcomes of the review support an increase in process plant capacity, as well as the previously flagged inclusion of a molybdenum recovery circuit to produce molybdenum as a separate by-product.
Process plant capacity is expected to expand 10% from 27 million tonnes per annum to 30Mtpa.
Production, cash flow and NPV to increase
Collectively, the changes to the processing flowsheet are predicted to boost copper production from 65,000tpa to about 71,000tpa over the first five years, with steady-state production forecast to rise from 60,000tpa to 65,000tpa.
The changes will require a minor increase in the initial capital investment from $1.6 billion to $1.7 billion, with a host of other positive financial results to flow from the expanded scale.
Positive financials included a reduction in C1 costs from US$1.54 per pound to US$1.23/lb, and a 14% decrease in AISC (all-in sustaining costs) from US$2.37/lb to US$2.07lb.
These are expected to increase net cash flow from $5.6 billion to $6.6 billion and grow NPV (net present value) from $1.5 billion to around $2 billion.
The internal rate of return (IRR) for the project is expected to increase from 18-21%, with a corresponding decrease in project payback period from 5.6 years to 4.9 years.
Scope changes to be ‘frozen’ into DFS
Mr Hyma said the decision to commission a wide-ranging independent metallurgical review of the project flowsheet reflected Caravel’s commitment to exhaustively analyse all aspects of the project and ‘build it right’ from the beginning.
“The results of the review have exceeded our expectations,” he said.
“The increase in copper production stems from relatively minor changes and enhancements to the project flowsheet, in combination with the inclusion of the previously flagged molybdenum recovery circuit.
He added the changes collectively result in a significant increase in anticipated cash flow, NPV and financial returns for a small rise in capital expenditure.
Additionally, the revised forecasts based on a relatively “modest” assumed copper price of US$4/lb.
“The outcomes of the review will now be ‘frozen’ into the detailed engineering phase, and we are delighted to announce the appointment of Lycopodium as the lead engineer for the definitive feasibility study, which will get underway in earnest in the second half of the year.”