Vancouver — In keeping with its philosophy of growth through acquisition,
“The deposit offers First Quantum the opportunity to expand its asset base in Zambia,” says Philip Pascall, the company’s chief executive officer. “In developing Kansanshi, we intend to use our local expertise and exploit our existing Copperbelt operations and associated infrastructure.”
The project hosts an open-pit mineral resource of 267 million tonnes grading 1.28% copper and 0.16 gram gold per tonne.
First Quantum will pay US$2.5 million and issue 1.4 million shares on signing a definitive agreement by June 29. Also, 30 days after commercial production begins, the junior producer is required to pay US$25 million, less the market value of 1.4 million of its own shares.
In order to begin commercial production within 30 months of completion of the feasibility study, First Quantum intends to complete a bankable feasibility study.
The deal is subject to the continued operation of underlying agreements with 20% stakeholder Zambian Consolidated Copper Mines (ZCCM) and the government of Zambia.
Kansanshi is one of the oldest known mines in Zambia. It lies in the northwest, some 15 km north of the town of Solwezi and 16 km south of the border with the Democratic Republic of Congo.
Since the discovery of ancient workings in 1899, the deposit has been intermittently mined, from underground and open pit, for high-grade copper. To date, it has produced about 80,000 tonnes of the red metal.
In January 1997, as part of the privatization of ZCCM, Cyprus Amax Minerals entered into an agreement with ZCCM and the Zambian government to secure majority ownership of Kansanshi. This agreement was completed on in mid-March of that year. In April 2000, Cyprus Amax, which was subsequently acquired by Phelps Dodge, completed more than 80,000 metres of drilling and produced a preliminary feasibility study. The deposit occurs within the Lufilian arc, a major tectonic province characterized by broadly north-directed fold-and-thrust structures. The arc hosts the Central African copper belt.
The property’s geology is dominated by the northwest-trending Kansanshi Antiform, which exposes rocks of the Late Proterozoic Kansanshi Mine Formation in the core of a major refolded fold. Copper mineralization occurs both in steeply dipping, generally north-south-trending quartz-carbonate veins, and as essentially flat-lying, bedding-controlled, stratabound mineralization within altered phyllitic rocks. Supergene enrichment and subsequent oxidation of the original sulphide mineralization has produced oxide, mixed and hypogene ore types.
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