Coda Minerals outlines ‘financially robust’ long-life copper-cobalt mine in South Australia
Coda Minerals says Elizabeth Creek could be a globally competitive, long-life mine amid a backdrop of mounting global copper demand.
Perth-based copper developer Coda Minerals (ASX: COD) plans to forge ahead with a pre-feasibility study after a delivering a positive scoping study on its flagship Elizabeth Creek copper-cobalt project, located in the heart of South Australia’s Olympic copper province.
The scoping study, which focused on the sedimentary copper-cobalt mineralisation that sits above Coda’s recent deeper iron-oxide-copper-gold (IOCG) discovery, has outlined a potential 14-year operation capable of delivering about 25,000 tonnes per annum of copper and 1,000tpa of cobalt.
Against the backdrop of what is widely expected to be a growing shortage of copper globally as the world economy decarbonises, Coda says the study as confirmed the potential of the Elizabeth Creek project to be a “globally competitive, long-life mine”.
‘Compelling’ study
Coda’s board described the study as having “compelling financial metrics and technical outcomes”, including $570 million net present value, and 26.5% internal rate of return.
The positive metrics prompted Coda’s board to approve the immediate start of pre-feasibility study.
An up front capital expenditure of $277 million was estimated to bring Elizabeth Creek online.
Mineralisation will be sourced from two open pits and one long-life underground mine, with the project to be developed in two distinct phases.
Phase one will consist of a one-year operation delivering copper-cobalt concentrate to generate early cash flow.
The second phase will comprise construction of a hydrometallurgical plant using the proven Albion process to produce higher value saleable end-products, including copper cathode, battery-grade cobalt sulphate, zinc carbonate and silver dore.
This phase two capital expenditure is approximately $320 million in year three and will be partly supported by cash flow from phase one operations.
The capital payback period for both stages is estimated at 4.75 years.
‘Important milestone’ for Elizabeth Creek
Coda chief executive officer Chris Stevens said the completion of the scoping study was an “important milestone” in the life of the Elizabeth Creek project – providing investors with their first glimpse at the detailed financial and technical aspects of the project.
“The study underpins a robust go-forward case for the Elizabeth Creek project with excellent economics,” he said.
“We also have multiple opportunities for expansion and improvement underway.”
He says that the company intends to continue exploring for a potentially game-changing IOCG discovery at Elizabeth Creek while it moves to the next stage of completing a pre-feasibility study.
“We will keep an eye on the many significant exploration opportunities that remain at Elizabeth Creek and beyond,” he said.
“Although the deeper IOCG mineralisation has not been included in this study, the exploration for a tier-one IOCG deposit continues.”
In good company
Elizabeth Creek is located 100km south of BHP’s (ASX: BHP) Olympic Dam copper-gold-uranium mine and 50km west of OZ Minerals’ (ASX: OZL) Carrapateena copper-gold project, with access to high quality infrastructure.
The region has been a focus of investor attention, with BHP expected to complete its takeover of OZ Minerals in the next few months.