Western Australian copper play Caravel Minerals (ASX: CVV) has got its pre-feasibility study (PFS) under way at its eponymous project in parallel with several major programs on the ground.
The PFS at the Caravel project is expected to be completed by the end of 2021.
At the same time, programs of drilling, power, environmental, water, geotechnical and metallurgical studies are all in progress, the company said.
Meanwhile, the copper price continues to strengthen — with signs that the gains are being generated by robust demand with customers lining up to get physical delivery, as shown in trading patterns.
The demand for copper is being underpinned by the growth in electric vehicle sales.
Spot copper prices ahead of futures
Friday trading of the red metal was notable for the fact that the spot price ended slightly higher than the three-month contract — US$8,352 per tonne (A$10,739/t) to US$8,332/t (A$10,713/t).
This is an indicator that copper is being bought for delivery rather than paper trading.
The bellwether “Dr Copper” is looking very healthy.
In fact, as Caravel points out in this latest announcement, the present copper price is 20% higher than the US$3 per pound (A$3.86/lb) price used in the company’s scoping study in May 2019.
Caravel Mineral’s project is located 120km north-northeast of Perth in WA’s Wheatbelt region between the towns of Calingiri and Wongan Hills.
The project area is located on cleared agricultural freehold land and is well connected to existing infrastructure including interconnected power, roads and highways, regional service towns and a range of export ports.
Deposit amenable to low-cost open pit mining
Caravel’s copper deposits form part of a regional porphyry-style copper-molybdenum-gold mineralised belt discovered in a previously unexplored part of the Yilgarn Craton.
The current resource at Caravel stands at 662 million tonnes at 0.28% copper, for a contained 1.86Mt.
The company states the deposit is amenable to low-cost, open pit bulk mining, with a low waste ratio and wide ore zones.
“Simple metallurgy allows standard processing to produce a clean, readily marketable concentrate,” it added.
The project is served by grid power, sealed roads and nearby towns and ports.
It lies within the WA South West Interconnected System, which has among the lowest wholesale power prices in Australia, according to the company.
Reverse circulation (RC) percussion and diamond drilling programs continue to progress.
Caravel Minerals said, to date, 21 RC holes have been completed with 4,000m of samples so far generated.
Three diamond holes have been completed for 1,600m of core.