Update lifts mine life for Metals Acquisition’s CSA copper project to 11 years

A resource update for Metals Acquisition‘s (NYSE: MTAL; ASX: MAC) CSA copper mine in Australia raises the total contained red metal by 42% and the mine life to 11 years from six years.  

The update is the first for CSA since MAC acquired it from Glencore (LSE: GLEN) for US$1.1 billion last year.

CSA, which stands for ‘Cornish, Scottish and Australia’ after the nationalities of its first owners, is one of Australia’s longest operating copper mines with a history stretching back almost 150 years. It is located 11 kilometres northwest of Cobar, in central-western New South Wales.

The update increases the total contained copper by 42% to 413,000 tonnes (8 million tonnes at 5.2% copper), and also ups the measured and indicated portions available for reserve conversion by 83%, at 229,000 tonnes. In the previous resource from 2022, the measured and indicated categories had zero tonnes.

“Whilst this resource and reserve statement is a snapshot in time based on information available back in August 2023, it does validate our belief that the CSA copper mine can be a long-life asset,” MAC CEO Mick McMullen said, adding that this dispels the view from the last generation that CSA “has a relatively short mine life.”

The update comes after roughly 10 months of ownership by MAC, a former special purpose acquisition company (SPAC), and is based on two and a half months of work post-acquisition, with an effective date of Aug. 31, 2023.

McMullen also highlighted that despite the near doubling of the mineral reserves and a 67% increase in the mine life (until 2034), there are still 4.7 million tonnes at 4.9% copper in the measured and indicated categories and 3.3 million tonnes at 5.5% copper in the inferred category, with the latter excluded from the reserves count and will be converted in the future.

The upgraded resource, according to MAC, is the result of increased drilling and the inclusion of level mapping data where levels have been developed through the deposits and not previously been included in the estimation.

While the overall copper grade has reduced from 5.3% in the 2022 measured and indicated resource to 4.9%, the company said this is mainly due to the inclusion of 2.2 million tonnes of material between the new cut-off grade of 1.5% and the previous cut-off grade of 2.5%, which, in terms of contained metal, had relatively little impact.

Mineral reserves (proven and probable) are estimated at nearly 15 million tonnes grading 3.3% copper for 494,000 tonnes of the metal, which was a 64% improvement after replacement of depletion. 

Supported by the resource and reserve statement, MAC also provided a three-year copper production guidance period for CSA: 38,000-43,000 tonnes in 2024, 43,000-48,000 tonnes in 2025, and 48,000-53,000 tonnes in 2026.

The company noted that the CSA mine, which has been producing for almost 60 years and has one of the highest copper grades in the country, has had very limited exploration away from the known deposits, and there is potential to further optimize this production plan.

Exploration in the top 850 metres of the deposit is just starting and initial results highlight strong potential to open additional mining fronts, it said.

Shares in Jersey, U.K.-based Metals Acquisition traded at US$13.16 apiece on Tuesday morning, giving it a market capitalization of US$912.7 million.