A corporate decision four years ago to focus on improving resource quality before proceeding to development has paid dividends for KGL Resources (ASX: KGL) at its Jervois copper project in the Northern Territory.
The resource-building strategy – triggered by shareholders after the company’s 2016 annual general meeting – has delivered significant increases to the copper content and an upgrade to the mineral resource at the flagship project.
Jervois’ new resource estimate now stands at 20.97 million tonnes grading 2.03% copper and 31.9 grams per tonne silver, for 426,200 tonnes copper, 21.4 million ounces silver and 175,700 ounces gold.
It compares to a 2018 estimate of 25.2Mt grading 1.53% copper, 29.2g/t silver for 384,800t copper and 23.6Moz silver; and an even earlier estimate of 30.5Mt grading 1.07% copper and 23g/t silver for 327,000t copper and 22.6Moz silver.
The latest figures take into account the three main deposits being considered for development, namely Reward, Rockface and Bellbird.
Resources at the Reward South (formerly Green Parrot) deposit have been scheduled for future re-assessment.
KGL said the decision to change strategy in 2016 realised an enhanced understanding of the Jervois geology, noting higher-grade mineralisation contained in tighter and better-defined mineralised shoots.
The copper grade almost doubled from the original 1.07% and a 30% increase in contained copper was associated with a 31% reduction in the resource tonnage.
KGL chairman Denis Wood said the company has an increased confidence in the resource, with 68% now in the Indicated category.
“Four years ago, we committed to a strategy of concentrating on understanding the geological structures [at Jervois] and we employed state-of-the-art technologies to plan efficient drilling to give us that confirmation,” he said.
“Ultimately, this resource outcome of 30% more copper, a near doubling of grade and greater confidence levels should have a positive impact on [our] mining and processing costs.”
Project planning work including a pre-feasibility study and ore reserve based on the upgraded resource estimate is now being worked on for completion by year end.
“We are approaching the project financing and development stage of Jervois at a time of strengthening copper and silver prices and positive medium and long-term market outlooks,” Mr Wood said.
“Copper’s traditional uses are being joined by steadily-growing modern applications including renewable energy and electronics, at a time when falling grades and increasing production costs around the world are impacting supply,” he added.
Since 2016, KGL has improved its understanding of the controls of mineralisation and disposition of mineralised lodes within the Jervois project.
Improved field protocols and the supplementing of legacy core-logging codes were introduced in 2017 with the result being an enhanced geological understanding and consistency in logging of lithology, alteration, mineralisation and structural domains and subgroups.
The company now recognises two styles of mineralisation and mineral assemblages at the project, being lower tenor, primary syn-depositional or stratabound disseminated sulphides; and higher-grade, structurally-controlled shoots representing remobilised stratabound syngenetic mineralisation, possibly related to a late regional intrusion-related mineralising event.
“The improved geological model widens the opportunity to target higher grade extensions and repetitions within favourable host rocks and structures in other areas adjacent to known deposits and in other prospects at Jervois,” Mr Wood said.
Mineralisation at Jervois was discovered in 1929 and a series of small, high-grade, open pit mines exploited mostly oxide copper and lead-zinc mineralisation from the Marshall-Reward, Green Parrot and Bellbird deposits until the early 1970s.
In 1982, Plenty River Mining operated a small open pit at Green Parrot to mine approximately 40,000t of lead-silver oxide material over a 12-month period.
From the 1990s, a renewed focus on exploration has slowly increased the region’s sulphide resources at depth.
KGL acquired the Jervois project in 2011.