Ivanplats

RNS Number : 1102L

Baker Steel Resources Trust Ltd

07 August 2013

 



BAKER STEEL RESOURCES TRUST LIMITED

(Incorporated in Guernsey with registered number 51576 under the provisions of The Companies (Guernsey) Law, 2008 as amended)

7 August 2013

Ivanplats announces lower initial capital cost and significant smelting capacity are among key elements for a refocused development study for its Kamoa copper discovery

Baker Steel Resources Trust Limited (the "Company") notes that key elements have been established for a new study to help set the stage for the cost-effective development of a mine and processing plant at the Kamoa copper discovery in the Democratic Republic of Congo announced yesterday by Ivanplats Limited ("Ivanplats"), the Company's largest investment:

The refocused Kamoa development study, to be prepared in conformity with the requirements set out in Canada's National Instrument 43-101, is expected to result in a declaration of the first mineral reserves at Kamoa and to report on the establishment of an appropriately phased approach to achieving first production and progressive expansion of the Kamoa Project.

Ivanplats is proposing two principal phases of development:

·      The first phase of mining would target production of high-grade copper mineralisation from shallow, underground resources to yield a high-value concentrate. Initial mill feed would come from Kansoko Sud and lead into the Centrale area of Kamoa's gently-dipping mineralised zones that collectively contain estimated Indicated Resources of 224 million tonnes grading 3.85% copper (at a 3.0% copper cut-off and a minimum 3.0-metre vertical mining thickness). Resource details are contained in the March 2013 Kamoa Technical Report, available at www.sedar.com.

·      The planned second phase would entail a major expansion of the mine and mill and construction of a large smelter, supported by the full extent of the Kamoa resources.

Robert Friedland, Chairman of Ivanplats, said the revised mining scenario was being developed to deliver the best balance of a lower initial capital cost and shortest time to first production, while maintaining Ivanplats' commitment and momentum towards a major mine, mill and smelting operation.

"This scenario, if confirmed by current studies and financial modelling, could provide for a 2017 start of copper production from Kamoa's first phase of development, subject to available financing."

A recommended initial production rate will form part of the development study being prepared by Hatch Ltd., of South Africa, one of the world's leading mining engineering consultants. Projected to be completed in the second half of 2014, the study will be based on development of the estimated mineral resources described in the March 2013 Kamoa Technical Report, excluding Inferred Resources.

In addition, an updated preliminary economic assessment of the preferred development scenario now underway is expected to be finished in the fourth quarter of this year.

Building of mine-access decline at Kamoa planned to begin early next year

Chief Executive Officer Lars-Eric Johansson said that excavation of the first mine-access decline at Kamoa is expected to begin early next year. The decline would provide machinery with access to the high-grade, near-surface copper resources that would be targeted for the planned first phase of production using the room-and-pillar mining method.

"To get into production as quickly as possible, our current strategy is to start with a smaller, simpler and more capital-efficient mine. Given the Kamoa Project's significant estimated Mineral Resource tonnage and its large lateral extent, we continue to believe that potential mining rates of up to 20 million tonnes per annum eventually could be achieved by operating in multiple mining areas and completing a series of production expansions to maximize the mine's capacity."

Construction of smelter an integral part of development plan

Mr. Johansson said Ivanplats is committed to building a smelter that will have the capacity to serve other mines in the Katanga district, create hundreds of additional skilled jobs as part of the project's major economic stimulus to the region and support the government's policy of adding in-country value to mineral production.

Timing of the smelter construction is dependent, in part, on the provision of additional generating capacity within the DRC's power supply grid.

Discussions well advanced with potential strategic partners

Mr. Friedland said that confidential discussions and the conduct of due diligence are well advanced with a selected number of leading international private and state-owned mining companies that have expressed interest in potential participation in the Kamoa Project. Ongoing talks could lead to the formation of a significant strategic partnership or syndicate for continued exploration and development of the Kamoa discovery and associated infrastructure.

The Company holds approximately 1.7% of the shares of Ivanplats which was equivalent to 16.6% of the Company's NAV at 31 July 2013. The full announcement by Ivanplats is available on its website: www.ivanplats.com

Further details of the Company and its investments are available on the Company's website www.bakersteelresourcestrust.com 

Enquiries:

Baker Steel Resources Trust Limited     [phone]

Francis Johnstone
Trevor Steel

RBC Capital Markets                           [phone]

Martin Eales

Winterflood Investment Trusts               [phone]

James Moseley

Pelham Bell Pottinger

Lorna Spears                                        [phone]

Joanna Boon                                         [phone]

 

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