First Quantum’s Trident receives Zambian president’s blessing

Even though it has yet to complete an initial National Instrument 43-101-compliant resource estimate for its recently acquired Trident copper project in Zambia, Vancouver-based copper miner First Quantum Minerals (FM-T, FQM-L) held a groundbreaking ceremony last week to celebrate the beginning stages of development.

In a ceremonial speech, Zambia’s president, Rupiah Banda, told First Quantum its Kansanshi copper-gold mine 150 km away has made many significant positive impacts on Zambia’s economy and that he looked forward to Trident being developed. He noted the company is already the country’s largest single taxpayer and reiterated his government’s commitment to encourage investment in Zambia’s mining sector.

First Quantum also confirmed it has now received large-scale mining licences for the project, giving it rights to mine the main Sentinel copper deposit, as well as the nearby Enterprise and Intrepid targets, for the next 25 years.

The company acquired Trident in January 2010 through its acquisition of formerly London-listed Kiwara PLC for $279 million in cash and shares. First Quantum has been drilling the project since April 2010 and has already completed 140,000 metres of drilling in order to compile its maiden resource estimate, expected to be released sometime in mid-2011.

It previously stated an “internal study assumes a resource of at least 700 million tonnes, head grade in the range of 0.65% to 0.80% copper and annual throughput rate of 40 million tonnes of ore for annual production of approximately 250,000 tonnes of copper … Results from a continuing drill program, which has 14 rigs on site, may lead to an expansion of the resource base and allow the possibility of further production expansion.”

The company has since decided to proceed with the design of a project that could initially produce 150,000 tonnes of copper per year and eventually up to 300,000 tonnes of copper per year or more. It notes, “The initial design and construction phases could commence during 2011, with commercial production in early 2014.”

Unconfirmed reports from local correspondents in Zambia said First Quantum’s chairman and CEO, Philip Pascall, had announced at the ceremony that 600 employees from local communities were already engaged by the company and its contractors.

The move to develop Trident marks First Quantum’s return to investing heavily in the highly prospective African Copperbelt after a terrible past two years with Zambia’s neighbour to the north, the Democratic Republic of Congo. The company suffered dearly at the hands of the DRC’s unruly government, which revoked First Quantum’s mining permits for both its Kolwezi copper-cobalt and Frontier copper mines after investments totalling more than $1 billion.

International arbitration is ongoing for both mines and is not expected to come to any conclusion until the latter part of 2012.

In recent times First Quantum has tried to reduce its exposure to Africa by acquiring advanced-stage projects in Australia, Peru and Finland, however the development of Trident would suggest a renewed focus in the more stable side of Africa’s Copperbelt, Zambia.

Indeed, in late April, gold mining giant Barrick Gold (ABX-T, ABX-N) launched a surprise $7.3-billion bid for mid-tier copper producer Equinox Minerals (EQN-T, EQN-A), primarily for its large Lumwana copper mine in Zambia. Lumwana produced 147,000 tonnes of copper in 2010, while First Quantum’s Kinsansha mine produced roughly 230,000 tonnes.

On a down day for markets, shares of First Quantum pulled back $4.16 to $129.92 after its May 3 announcement.