Total
Y,
DFS CONFIRMS
ASX RELEASE
10 AUGUST 2016 ASX CODE:KAS
OUR PRIME COMMODITY IS TIN
LME TIN PRICE (08/08/16)
USD 18,150 / t
(CASH BUYER)
ABOUT KASBAH
KASBAH IS AN AUSTRALIAN LISTED MINERAL EXPLORATION AND DEVELOPMENT COMPANY.
THE ATLAS TIN JOINT VENTURE (KASBAH 75%, TOYOTA TSUSHO CORP 20% AND NITTETSU MINING CO. LTD 5%) IS ADVANCING THE ACHMMACH TIN PROJECT IN THE KINGDOM OF MOROCCO TOWARDS PRODUCTION.
PROJECTS ACHMMACH TIN PROJECT (75% KAS) BOU EL JAJ TIN PROJECT (100% KAS)
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SHARES ON ISSUE:
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556 M
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UNLISTED OPTIONS:
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0.5 M
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CASH @ 30/06/16
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$1.2 M
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CAPITAL STRUCTURE
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WORLD BANK (IFC)
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17.7%
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AFRICAN LION GROUP
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15.7%
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THAISARCO
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5.6%
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TRAXYS
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5.3%
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MAJOR SHAREHOLDERS
CONTACTS
: + 61 8 9463 6651
: [email protected]
: www.kasbahresources.com
@kasbahresources
PROJECT ECONOMICS FOR ACHMMACH TIN PROJECT
Modest capital, low operating costs and rapid payback supports two stage development plan
The definitive feasibility study (DFS) for the Small Start Option at the Achmmach Tin Project (75% Kasbah, 20% Toyota Tsusho Corp, 5% Nittetsu Mining Co. Ltd) is now complete and has determined that an 0.5 Mtpa, high grade underground operation at Achmmach is technically and commercially feasible.
Highlights include:
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Ore reserve of 6.56 Mt @ 0.85% Sn for 55,500 tonnes contained tin
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Stage 1 Mine Production = 1.89 Mt @ ≈0.96 % Sn
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Stage 2 Mine Production = 4.67 Mt @ ≈0.80 % Sn
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Life of Mine (LOM) = 10.5 years
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Average annual production of ≈3,970 tonnes of tin in concentrate
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All in sustaining costs (AISC) of USD 11,507 / t Sn
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Project construction capital cost of USD 61.7 M
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On an after tax, ungeared basis (using the 21/7/16 LME spot Sn price of USD 17,830 per tonne and an 8% discount rate), the DFS generates:
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NPV of 100% of the project = USD 51 M
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Kasbah 75% of NPV = USD 38 M
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an Internal rate of return of 20.6%
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a payback period of 3.8 years
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Life of Mine free cash flow of USD 120 M
OVERVIEW
Kasbah Resources Limited (Kasbah, ASX: KAS) is pleased to announce the completion of the Definitive Feasibility Study (DFS) and new Ore Reserve for the Small Start Option (SSO) at the Achmmach Tin Project (75% Kasbah, 20% Toyota Tsusho Corp and 5% Nittetsu Mining Co. Ltd).
On 18 March 2015 Kasbah released an enhanced definitive feasibility study into a 1 Mtpa underground mine and processing facility for the Achmmach Tin Project to the market. This large scale, capital intensive project required construction capital of approximately USD 131 M to establish the 1 Mtpa project and in a weak financing, commodity and equity market, the capital requirement was a significant impost to project development. To address these issues and the continued fall in the LME tin price during 2015, Kasbah commenced investigation into a lower cost development model.
The 2016 Achmmach SSO DFS has defined a lower capital, higher grade, staged development opportunity that is technically and economically feasible at current LME tin prices (Table 1). Importantly the Project Construction capital (on a 100% basis) is estimated to be USD 61.7 M with all in sustaining costs (AISC) of USD 11,507 / t of tin in concentrate.
The Achmmach SSO DFS is premised upon a hard rock underground tin mine with a ten year life that is developed in two stages. Stage 1 production initially commences at 0.5 Mtpa for 42 months then is expanded in Stage 2 to 0.75 Mtpa for 80 months (the remainder of the mine life).
This staged approach utilises contract mining, contract crushing and modular plant design and unlike the 1 Mtpa scale where the full capacity was installed upfront, the SSO offers greater operational flexibility.
Table 1: Achmmach SSO DFS Metrics
@ LME Sn price @ 21/07/16 of USD 17,830 / t
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SSO
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Ore Reserve
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Life of Mine (LOM)
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Project Construction Capital
USD
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All in sustaining costs (AISC)
USD / t of tin in concentrate
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NPV8
after tax USDM
(100% of
Project)
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IRR
%
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DFS
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6.56 Mt @ 0.85 %
Sn for 55,500 t of contained tin
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10.5
Years
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61.7 M
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11,507
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51
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20.6
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The SSO has maintained competitive all-in sustaining costs and at current LME tin prices generates positive substantial returns.
Table 2 summarises DFS project returns across a wider range of LME tin prices.
Table 2: 2016 Achmmach SSO DFS - Sensitivity to LME Tin Price
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LME Sn Price USD / t
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NPV8
after tax USD M
(100% of Project)
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IRR
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16,000
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14.6
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11.8%
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17,000
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34.5
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16.7%
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DFS @ 17,830
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50.9
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20.6%
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18,000
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54.3
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21.3%
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19,000
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74.1
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25.7%
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20,000
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93.9
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29.9%
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Achmmach Small Start Option - 2016 DFS Overview
The Achmmach SSO DFS incorporates:
The staged mining approach (Table 3) is premised upon a 0.8% Sn mine cut-off grade in Stage 1 delivering run of mine grades of approximately 1.00 % Sn. The reduction to a 0.55% cut-off grade in Stage 2 sees production expand to 0.75 Mtpa and tin production maintained at a consistent level of ≈3,970 tonnes of tin in concentrate per annum across the life of mine.
The higher run of mine ore grades in Stage 1 of 1.0% Sn result in an increase in metallurgical recovery to 73.4%, with production of approximately 292 tonnes/month of tin in concentrate. In Stage 2, as run of mine ore grade returns to approximately 0.80% Sn, metallurgical recovery reduces to 72.2% to produce approximately 351 tonnes/month of tin in concentrate. Tin concentrates will be a saleable industry standard of ≈55% Sn.
Table 3: 2016 DFS - Staged Mining Metrics
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DFS metrics
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Stage 1
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Stage 2
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Cut-off grade
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0.8% Sn
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0.55% Sn
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ROM tonnes and grade
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1.89 Mt @ 0.96 % Sn
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4.67 Mt @ 0.80 % Sn
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Delivering
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18,235 t contained tin to mill
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37,310 t contained tin to mill
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Processing
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0.5 Mtpa over 42 months
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0.75 tpa over 80 months
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Total Tin in Concentrate produced
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12,255 tonnes (292 tpm)
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28,114 tonnes (351 tpm)
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Tables 4 and 5 summarise the key technical and financial outputs from the August 2016 DFS.
Table 4: Achmmach 2016 DFS Technical Summary
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Parameter
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Units
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DFS
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Ore ReserveA
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Mt
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6.56
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Stage 1 mined ore grade
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%
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0.96
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Stage 2 mined ore grade
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%
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0.80
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Average annual tin in concentrate produced
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t
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3,970
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Total Tin concentrate shipped
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t
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73,950
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Tin Concentrate grade
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%
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55
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Total LOM Tin in concentrate shipped
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t
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40,370
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Total Project life
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months
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132
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Mine production period
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months
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126
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Mill production period
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months
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122
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Project construction capital
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USD M
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61.7
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Operating costs
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USD/t tin
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8,999
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C1B
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C3C
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USD/t tin
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13,778
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All in sustaining cost (AISC)
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USD/t tin
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11,507
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A Ore Reserve is derived from Measured and Indicated Mineral Resources that have had mining dilution and recovery factors applied to the mine design, and ore treatment and other surface operational cost factors applied to create an inventory of mineable stope and development tonnes, the extraction and treatment of which may be accomplished in an economic and environmentally acceptable manner.
B C1 cost is the sum of mining, processing, site administration and off-site refining.
C C3 cost is the sum of C1 cost, depreciation & amortisation, royalties and project related corporate costs.