KEFI Gold and Copper plc (LON:KEFI), the gold and copper exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, has provided an update on the status of the Hawiah Copper-Gold VMS Project in Saudi Arabia.
· Phase 4 drilling campaign is completed with 16,306m drilled and final assay results have been received
· Update to the 2020 Mineral Resource Estimate (“MRE”) is expected in December 2021 following the recent completion of initial modelling and site visit by independent experts
· The updated MRE is expected to include the additional resources previously defined in the Phase 3 drilling programme, as well as material in the Indicated category where in-fill drilling has taken place
· Early statistical analysis confirms mineralisation delineated during the recent drilling programmes is of higher grade, which will aid to improve the overall Project economics
· Drilling of zones outside the 2020 MRE area confirm the down plunge continuity of the Camp Lode for a further c.670m
· The 2020 MRE had identified a resource of 19.3 million tonnes at 1.9% copper-equivalent over a strike length of c.5,000m
· Preliminary Feasibility Study (“PFS”) elements have been awarded and an experienced team of consultants has been assembled to help deliver the PFS in 2022
· Metallurgical testing, environmental and hydrological programmes continue to progress
Harry Anagnostaras-Adams, Executive Chairman of KEFI, commented:
“All assay results have now been received from our substantial drilling programmes completed during 2021 at our Hawiah copper-gold-zinc-silver project in Saudi Arabia.
“In August 2020, KEFI reported a maiden Mineral Resource Estimate of 19.3 million tonnes at 1.9% copper-equivalent in-situ for Hawiah. The 2021 drilling results indicate we will soon be in a position to report a larger resource at higher grade. Drilling has also better defined the ore lodes and will upgrade a substantial portion of the near-surface Inferred Resources to the Indicated category.
“At current market prices the 2020 Mineral Resource Estimate represents an in-situ value of over US$3 billion worth of metal. Drilling during 2021 extended the Camp Lode mineralisation c. 670m down plunge from the 2020 MRE and remains open down plunge.
“With drilling during 2021 confirming and extending the 2020 resource and an increasingly positive outlook for copper pricing, Hawiah continues to increase in value and strongly complements our Tulu Kapi Gold Project in Ethiopia.”
Phase 4 Drilling and Updated MRE
The Phase 4 diamond drilling programme was completed in early September 2021 for 16,306m across 92 drillholes, bringing the Hawiah drilling total meterage to 41,841m. All assay results have now been received and the updated MRE is on track to be completed in December 2021.
The exploration team have been very pleased with the progress made during the Phase 4 programme, with the geological model performing as predicted and returned assay results indicating that an overall increase in the resource grades for copper, zinc, gold, and silver is to be expected. This, coupled with the additional tonnage delineated during the Phase 3 drilling, should result in a positive MRE, building on the already economic resource announced in 2020.
As outlined in KEFI’s 24 August 2021 announcement, the Phase 4 programme was designed to improve the drilling resolution in key areas of the Hawiah ore body to enable an upgrade in resource classification (see figure 2 in Appendix 2).
Leading independent mining consultants SRK Consulting (UK) Ltd has been commissioned to provide the 2021 MRE update. KEFI and SRK geological staff are now well advanced with the modelling and evaluation works. This includes a site visit which took place in late October 2021.
Early design works have highlighted that approximately 10 million tonnes of mineralisation should already qualify for Indicated classification, which will aid in the initial mine design and the generation of a maiden Ore Reserve as part of the ongoing PFS. Ongoing drilling will in due course convert more of the Mineral Resource to Ore Reserve.
Assay highlights from the Phase 4 diamond drilling programme include:
– HWD-137 – 19.45m (11.5m Estimated True Width (“ETW”)) at 1.26% Cu, 0.29% Zn, 0.87 g/t Au and 10.91 g/t Ag
– HWD-152b – 8.57m (5.0m ETW) 2.61% Cu, 0.10 Zn%, 0.95 g/t Au and 9.24 g/t Ag
– HWD- 164 – 17.6m (13m ETW) at 2.6% Cu, 0.4 g/t Au and 5.8 g/t Ag
– HWD-170 – 12.71m (6.5m ETW) at 3.0% Cu, 0.7% Zn,0.6 g/t Au and 10.2 g/t Ag
– HWD-186 – 10.68m (9.1m ETW) at 2.3% Cu, 0.4% Zn, 0.8 g/t Au and 11.1g/t Ag
– HWD-097 – 22.9m (14.5m ETW) at 1.1% Cu, 0.5% Zn, 0.61 g/t Au and 9.2 g/t Ag
– HWD-099 – 19.7m (11m ETW) at 0.7% Cu, 1.4% Zn, 1.54 g/t Au and 14.5 g/t Ag
– HWD-102 – 22.2m (12.2m ETW) at 1.6% Cu, 0.2% Zn, 0.52 g/t Au and 9.0 g/t Ag
– HwD-104 – 10.1m (5.5m ETW) at 1.5% Cu, 0.2 Zn, 0.16 g/t Au, 3.36 g/t Ag
– HWD-106 – 5.7m (4.4m ETW) at 0.9% Cu, 2.4% Zn, 0.71 g/t Au and 10.0 g/t Ag
– HWD-108 – 7.4m (4.7m ETW) at 1.3% Cu, 1.3% Zn, 0.47 g/t Au and 8.6 g/t Ag
Appendix 1 tabulates the significant intercepts and collar locations for all drill holes in the Phase 4 programme and may be seen below.
Appendix 2 provides diagrams summarising drilling undertaken at Hawiah to date and may be seen in the appended PDF document – http://www.rns-pdf.londonstockexchange.com/rns/8660R_1-2021-11-9.pdf
Open Pit Scenario
The team have been especially encouraged with the thickness and grades of the Camp Lode and Crossroads Lode, particularly within the upper portions of the deposit which should allow for an open-pit mining option to be considered during the early phases of mine life. This open-pit scenario will be more rigorously assessed during the later stages of the MRE and on into the PFS.
The case for the open-pit scenario has been strengthened by increased drilling density within the transition zone, which has confirmed continuous high copper grades across large areas of the deposit, with intervals of up to 6m (estimated true width) at 4.4% Cu, in HWD 003.
The estimated true width weighted average assays for Phase 4 drilling within the transition zone contain: copper +26%, gold +21% and silver +11% against the MRE transitional zone grades.
The transition zone lies directly below the oxide zone from around 25-70m depth. An open-pit option would also allow for a greater portion of the gold-rich oxide cap to be exploited, potentially adding further value and resources to the Project.
The Hawiah PFS is now underway and an excellent team of consultancy groups have been assembled to work with KEFI in the preparation of the PFS, including SENET (a DRA Global group company), SRK Consulting (UK) Ltd and Knight Piésold. Whilst individual consultancies will conduct work and sign-off on specific elements of the study, the process will be managed by the Gold and Minerals team. It is intended to have an initial Ore Reserve based on detailed mine planning completed by mid-2022.
As previously announced, an independent environmental baseline scoping study is ready for submission to the Saudi Arabian environmental authorities in preparation for further baseline studies as required under the Saudi Arabian Mining Investment Law. At the same time geo-hydrogeological studies are in progress and a consultancy group has recently completed a vertical electrical sounding (“VES”) geophysical survey across the local wadi networks to aid with groundwater modelling. Targeted pump testing is scheduled to start in the coming months.
These supporting works are aimed at ensuring that the Project can continue to be rapidly progressed towards KEFI’s target of Hawiah commencing development in late 2023.
This work programme will potentially also complement the investment criteria of the Saudi Industrial Development Fund (“SIDF”), which is mandated to prioritise mining with project loans of up to 75% of capital requirements, which may also include the final stages of the exploration process. The combination of Saudi Arabia’s relative stability, the availability of domestic capital and KEFI’s long-established joint venture structure, is expected to make the project financing aspects much more straightforward in Saudi Arabia than they are in Ethiopia.
Harry Anagnostaras-Adams, Executive Chairman of KEFI, commented:
“Our team has also been progressing the key work streams for the Preliminary Feasibility Study with metallurgical, environmental and hydrological programmes now well advanced. This work is supporting the assumptions of our 2020 PEA, including that all four primary metals (copper, gold, zinc and silver) will be recovered and contribute to Project revenue.
“An economic project has already been identified, but we are still very much in the early days of defining the full potential of the Hawiah Project. The ore lodes drilled to date remain open and we have yet to locate the ‘feeder zone’ to the massive sulphide lodes, which represents a separate and potentially much larger-scale target.”