China smelter group agrees to lower Q1 copper charges
The charges tend to fall when ore supply declines and rise when more concentrate is available.
Jersey-based Metals Acquisition (NYSE: MTAL; ASX: MAC) has updated its mineral resource count for the first time since the company acquired the CSA copper mine from Glencore in a $1.1 billion deal last year.
The CSA mine, whose name stands for ‘Cornish, Scottish and Australia’ after the nationalities of its first owners, is one of Australia’s longest operating copper mines with a history stretching back almost 150 years. It is located 11 kilometres northwest of Cobar, in central-western New South Wales.
The new update comes after roughly 10 months of ownership by MAC, a former special purpose acquisition company (SPAC), and is based on two and a half months of work post-acquisition, with an effective date of August 31, 2023.
Not only has the total contained copper increased by 42% to 413,000 tonnes (8 million tonnes at 5.2% copper), the measured and indicated (M+I) portions available for mineral reserve conversion have also increased by 83%, at 229,000 tonnes.
In the previous resource from 2022, the M+I category had zero tonnes.
The upgraded resource, according to MAC, resulted from increased drilling and the inclusion of level mapping data where levels have been developed through the deposits and not previously been included in the estimation.
While the overall copper grade has reduced from 5.3% in the 2022 M+I resource to 4.9%, the company said this is predominately a result of the inclusion of 2.2 million tonnes of material between the new cut-off grade of 1.5% and the previous cut-off grade of 2.5%, which, in terms of contained metal, had relatively small impact.
Mineral reserves (proven and probable) are estimated at nearly 15 million tonnes grading 3.3% copper for 494,000 tonnes of the metal, which was a 64% improvement after replacement of depletion. Importantly, the increased reserve base allows for an extension of the CSA mine life to 11 years (until 2034), compared with six years before.
“Whilst this resource and reserve statement is a snapshot in time based on information available back in August 2023, it does validate our belief that the CSA copper mine can be a long-life asset,” MAC CEO Mick McMullen said, adding that this dispels the view from the last generation that CSA “has a relatively short mine life.”
McMullen also highlighted that despite the near doubling of the mineral reserves and a 67% increase in the mine life, there are still 4.7 million tonnes at 4.9% copper in the M+I category and 3.3 million tonnes at 5.5% copper in the inferred category, with the latter excluded from the reserves count and will be converted in the future.
Supported by the resource and reserve statement, MAC also provided a three-year copper production guidance for the CSA mine: 38,000-43,000 tonnes in 2024, 43,000-48,000 tonnes in 2025, and 48,000-53,000 tonnes in 2026.
The company also noted that the CSA mine, which has been producing for almost 60 years and has one of the highest copper grades in the country, has had very limited exploration away from the known deposits, and there is potential to further optimize this production plan.
Exploration in the top 850 metres of the deposit is just starting and initial results highlight strong potential to open additional mining fronts, it said.
Shares of Metals Acquisition rose nearly 3.0% at market open Tuesday in New York, giving it a market capitalization of $916.8 million.
