Arc Minerals (LSE:ARCM) rose 1.9pc to 2.6p on Monday morning after announcing that it has completed the construction of a demonstration pilot plant at one of its copper/cobalt licences in Zambia. The business said the plant was completed under budget at its part-owned Kalaba prospect and has been successfully commissioned with the initial production of copper/cobalt sulphide concentrate.
Kalaba is a copper-cobalt licence covering nine of 30 high priority targets ranked by a previous JV operated by Anglo American. It is found near First Quantum’s Sentinel and Kansanshi and Barrick’s Lumwana mines. The project has an existing near-surface estimated copper-cobalt oxide resource of 16.59Mt at 0.94pc copper and a historical exploration target of 150Mt. This makes it one of the most significant projects of its type in Zambia.
Kalaba is owned by a private company called Zamsort, which is in turn 66pc owned by Arc. Alongside this equity position, Arc has issued a convertible loan to Zamsort that converts into an additional c.5pc stake.
Arc is now finalising detailed oxide resource tonnages, grades, and mining line with the completion of the block modelling of Kalaba’s overall oxide resource. The block model assessment of the ore body will be the basis for a review of operational and mining strategy at the site. This will include the cost-benefit potential of upgrading the oxide ore feed into the plant aimed at materially reducing consumption of acid and related input costs.
Arc said that initial production at its demonstration plant would incur no mining costs because feed will be drawn down from an existing stockpile of 10,000ts at 2pc copper. Finally, the organisation said it is also looking at the potential of using the plant to enhance revenue streams through the production of separate copper and cobalt sulphide precipitates.
Arc’s executive chairman Nick von Schirnding said: ‘I am very pleased to report that we delivered on our commitment to complete the construction and commissioning of the small-scale demonstration pilot plant at Kalaba. We have now completed the plant under budget - for less than half a million dollars. It is also an important step regarding Zamsort's previous commitments in terms of its exploration licenses. In the meantime, we have made major progress regarding our next phase of exploration and our newly identified targets. A more detailed update on this will be made shortly.’
In February, Arc announced that it had identified two ‘potentially game-changing’ new targets on Zamsort’s acreage in Zambia. The business released the initial results of an airborne geophysical and soil sampling programme at the copper-cobalt licence owned by Zamsort.
The work revealed seven new anomalies, the largest of which are Cheyeza West and Lumbeta. Cheyeza West contains a 3km-by-3km anomaly outlined by very high copper values in the soils enclosed by the wider 10km-by-8km Cheyeza anomaly. Furthermore, a co-incident electromagnetic anomaly over the core has indicated conductivity within the host rock.
Meanwhile, the Lumbeta target stretches for 11km and is associated with the crest of a fold. According to Arc, these formations can act as mineralisation traps and form high-grade deposits
Arc expects to release a more detailed update ‘shortly’ once it has assessed the results of the programme thoroughly with its external exploration consultants.
Von Schirnding said Cheyeza West and Lumbeta are close to ten times the size of Kalaba.
Author: Daniel Flynn
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