Kasbah Resources has published summary details of a Definitive Feasibility Study (DFS) on its Achmmach project in Morocco, and sees an underground mine producing 5,300 tpy of tin-in-concentrate over a nine year life, starting up in the second quarter of 2016. There is further potential to improve project economics by the addition of one or more open pits to exploit near-surface mineralisation and the exploration and development of the parallel Sidi Addi Trend orebody.
The DFS identifies proven and probable reserves for the Meknès Underground orebody of 8.445 million tonnes grading 0.78% tin. The base case is premised on underground extraction of the entire Meknès Trend ore reserve utilising long hole open stoping mining methods supported by pastefill delivering approximately 1 Mtpa of run of mine ore to a conventional gravity and flotation facility at Achmmach. This processing plant will produce approximately 10,000 t of low impurity tin concentrates per annum (at approximately 55% Sn) and generate approximately 5,300 t of tin in concentrate per annum for export.
Pre-production capital expenditure is estimated at US$126 million, with life of mine operating costs (including capital charges, royalties and corporate overheads) at $15,309/tonne of tin-in-concentrate. Based on the current LME tin price, the project has a net present value of $126 million, with an internal rate of return of 23.3%.
In a statement, Kasbah Managing Director Wayne Bramwell said: “Achmmach is now confirmed as a strategic tin asset with competitive operating costs and strong cash flow potential. These factors in tandem with the strong support from the Kasbah shareholder base and the Moroccan administration make this project a compelling development opportunity. The broader tin industry is hungry for new tin supply and Achmmach is on track to meet this growing need.”
The company and its debt advisor Optimum Capital will now embark on financing and offtake negotiations, which are scheduled to be completed by the end of this year, with construction due to begin in early 2015. Kasbah also expects to conclude joint venture agreements shortly with Toyota Tsusho and Nittetsu Mining, who are slated to take 20% and 5% stakes in the project respectively.