Aspiring Perth copper producer Equinox Minerals Ltd has added another $40.5 million to an earlier $170M raising to pave the way for production from its $750 million Lumwana copper/uranium project in Zambia in about two years’ time.
Aspiring Perth copper producer Equinox Minerals Ltd has added another $40.5 million to an earlier $170M raising to pave the way for production from its $750 million Lumwana copper/uranium project in Zambia in about two years’ time.
The company has entered into a private placement agreement with the majority Zambian government owned ZCCM Investments Holdings plc to take two equal $20.25 million share packages, the first by the end of this month, the second by the end of June this year.
ZCCM is the 87 per cent owned subsidiary investment vehicle of Zambia Consolidated Copper Mines Ltd, the Zambian government’s national mining company.
Equinox chief executive officer Craig Williams told WA Business News the placement would give the Zambian government a five to 10 per cent stake in Equinox.
Equinox is still negotiating sales agreements, which Mr Williams conceded was about the only major sticking point to getting the $486 million project debt financing in place. The ultimate $750 million project capital cost includes $130 million for the mining fleet.
“There are two major refineries in Zambia and a third under construction. We have been negotiating with all three groups for over a year and it’s looking good,” he said.
Earlier this year, the company raised $170 million via prospectus issues in Canada and Australia, about 80 per cent of it coming via the Toronto stock exchange.
Mr Williams said he expected to have all the financial commitments for the project completed by the middle of this year, with construction beginning very soon after for production in late 2007/early 2008.
Initial production over the first five years has been projected at 415 million pounds a year, reducing to an average 330Mlb/year over the current 18 year mine life.
That lower average production rate equates to copper production worth about $772 million a year, with costs, not including such things as cost of finance and tax, at about 96c/lb (US70c/lb). That puts the Lumwana project, 65km west of the provincial capital of Solwezi, around the middle of the pack in terms of world copper production costs.
There is also a 21.8Mlb uranium resource within the Lumwana project, on which Equinox has already done a feasibility study and will be revisited soon after construction begins on the 188,000 tonne per annum copper development.
The previously designed uranium plant delivered break-even economics in 2003 at about $US11lb ($15lb). The uranium price recently went through $US40 ($55lb).
Mr Williams said exploration to date had shown plenty of resource upside from its 1,355 sq km holding around the two central deposits, which he expected would double the mine life out to nearly 40 years.
Equinox’ share price has risen from around 90c at the end of last year to $1.65.
