First Quantum expands Lonshi resource (January 27, 2003)

An independent resource estimate has added 21% more copper to the Lonshi copper oxide mine in the Democratic Republic of Congo.

First Quantum Minerals (FM-T) says the increase reflects a 300-metre extension to the strike length and a 65-metre extension to the orebody’s depth.

The expansion follows a drilling campaign prior to which mineralization had been traced for 800 metres along strike and for 65 metres below surface.

Zimbabwe-based Digital Mine Services puts measured and indicated resources at 7.3 million tonnes grading 4.91% copper, for 356,435 contained tonnes. The previous estimate, which was based on the same cutoff grade, held 295,000 tonnes of the red metal in 5.1 million tonnes, for an average grade of 5.75% copper.

The update also includes an inferred resource of 152,241 tonnes grading 5.07% copper. No such resource was known to exist before.

To date, First Quantum has sunk 187 holes totaling 9,187 metres in the Lonshi deposit. Drilling will continue to focus on strike and depth extensions, as well as the potential of the primary mineralization.

Also, three holes drilled in the 2002 campaign cut deeper, higher-grading sulphide mineralization:

r hole LDD2 ran 11.92% copper over 4 metres;

r hole LDD3 returned 7.77% copper over 2 metres; and

r hole LDD6 returned 6.95% copper over 5 metres.

Generally, mineralization occurs in a 15-metre-thick package of weathered Roan clastics and distal units that which outcrop on surface and dip to the east at 38.

First Quantum acquired an 85% stake in Lonshi in mid-2000 and advanced it to production 16 months later. Mined material is being trucked across the border to the company’s Bwana Mkuwba solvent extraction-electrowinning (SX-EW) plant at Ndola.

First Quantum also owns the advanced Kansanshi deposit, about 200 km to the northeast near the border with the Democratic Republic of Congo. Like Lonshi, mineralization occurs in oxide and sulphide form.

At last report, near-surface resources were pegged at 73 million tonnes grading 1.74% copper and 0.27 gram gold per tonne. The resource is expected to support an annual milling rate of 6.6 million tonnes over 11 years to produce upwards of 624,000 tonnes copper cathode, 413,000 tonnes copper-in-concentrate and 460,000 oz. gold in all.

About 60% of the mined material will be processed on-site in an SX-EW plant. The remainder will be concentrated and shipped to smelters to the southwest.

Operating costs are expected to average US$12.90 per tonne of material treated, or US35 per lb. copper produced, net of byproduct credits.

Capital costs are projected at US$155 million.

A bankable feasibility study is scheduled for release by March.