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Khoemacau copper mine takes off

Publishing Date : 09 July, 2019

Author : TSAONE SEGAETSHO

Khoeamacau, Botswana’s highly anticipated copper and silver mining project was officially kick started by President Dr Mokgweetsi Masisi this week.


At a ground breaking and official opening ceremony held at the mine sites located in the North East district of Botswana, President Masisi said the operation’s full swing mode into construction brings investor confidence to the mine’s funders and generally Batswana  who have been waiting patiently for the project to take shape.


Khoemacau resurrects the nation’s copper industry after the demise of one of Southern Africa’s prolific and oldest copper & nickel operations, BCL in October 2016. BCL was liquidated following commodity prices fall and allegedly poor investment decisions by company management.


Khoemacau‘s official ground breaking follows a P6 billion pula investment into the mine by various investors revealed early this year. The funding package announced in March this year comprised of US$275 million (P2.9 billion) senior debt facility from Red Kite Mine Finance and a US$265 million (P2.8 billion) silver stream from Royal Gold AG a wholly owned subsidiary of Royal Gold, and a US$25 million (P263 million) subordinated debt facility also from Royal Gold.


Cupric Canyon, Khoemacau Copper Mining parent company has been developing 4,040 square kilometre land stretched project for the past 6 years. One of the deposits within the Khoemacau Project, Zone 5, was initially discovered in 2012 and has since become the flagship deposit after being acquired by the company in 2013.


Since acquiring deposits Khoemacau has drilled 285,000 metres, completed permitting and land access agreements, secured the required power and water, and undertaken advanced engineering, procurement and mobilization to site. In 2015, the company acquired the Boseto assets a previously operated copper project adjacent to Zone 5 following liquidation of Australian Base metal outfit Discovery Metals Botswana.


This acquisition offered the company access to the 3.0 million tonnes per annum Boseto processing facility located 35 kilometres from Zone 5 along with extensive infrastructure, and various mineral resources and licenses. Since acquisition, the Boseto assets have been incorporated into the Starter Project development plan.  


The Starter Project development plan now involves the fully mechanized underground mining of sulphide ores at Zone 5 at a rate of 3.6 million tonnes per annum using the upgraded Boseto processing facility for crushing, milling, flotation and production of a high-grade copper silver concentrate. The Starter Project is expected to produce a high quality copper concentrate with an average grade of approximately 40 percent copper and high-grade silver.


This according to information from the company will results in annual average production of 62,000 tonnes copper and 1.9 million ounces silver per annum over a 21-year mine life. The average life-of mine C1 cash costs, net of silver by-product credits, are US$1.47/lb at consensus pricing and US$1.67/lb including sustaining capex, and before accounting for the silver stream


At the ground breaking ceremony Khoemacau officials revealed that over P10 billion in profits is expected from the  Copper Mine over its 21 year operational lifespan  from 2021-2042.It was also noted that over P2.8 billion will be paid to government through royalties during the mine ‘s lifespan . Botswana Unified Revenue Service (BURS) is alone expected to cash in over P700 million in declared tax revenue from the operation.


Last month Cupric Canyon Chief Executive Officer, Johan Ferreira told Botswana Resource Sector Conference that the royalty estimates came from preliminary results of the ongoing study the mine is currently undertaking through KPMG.Ferreira further shared that for its entire 21 years of the operation Khoemacau will have over P90 billion impact on Botswana’s gross domestic product(GDP)


When officially opening the mine President Masisi said the investment by Cupric Canyon Capital was prove to Botswana’s attractiveness to foreign direct investment (FDI)  , as well as an explicit expression of confidence in the government policies and easy of doing business initiatives. At full operation post first copper dispatch into the market Khoemacau is expected to create over 3000 Jobs direct and indirectly.


This according to President Masisi proves the project’s socio economic impact in Ngamiland and entire North East district. He noted that value chain opportunities and related industries would emerge once the mine is in full operation, such as logistics, hospitality, giving a significant boost to local Small Medium Enterprises (SMMEs). Various ancillary infrastructure such as roads, electricity, telecommunications, fibre optic networks, WiFi, are also expected to be set up, equipping the region with permanent economic components.


"An economic activity of this magnitude will therefore go a long way in reducing poverty for many of the communities in this area. Therefore the opening of this mine could not have come at a more appropriate time," he said. Khoemacau Copper Mining previously known as Hana Ghanzi Copper is a subsidiary of Cupric Canyon Capital Plc. The company has been exploring and developing the Ghantsi-Chobe Copper Silver Project located in the Kalahari copper belt within the Ghantsi and Ngamiland Districts

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