That follows on from the first blast at the end of April and a successful trial period during which Aleecto produced saleable concentrate of up to 28% copper.
So far, the company has produced more than 1,900 tonnes of copper concentrate which is being sold to its offtake partner, Fujax.
“Mowana is now a full-time copper production operation and we look forward to gaining ownership of the project subject to shareholder approval at which point, we believe, our company will benefit from a significant value re-rating.,” said chief executive Mark Jones.
“Once effected, we will have taken control of a significant asset which has been subject to more than US$150mln of investment in the past for an acquisition price of approximately US$10mln.”
A step closer to resuming trading on AIM
The Competent Persons Report (CPR) on Alecto’s African assets has also been completed, which the firm said represented an “important milestone”.
It takes Alecto one step closer to the publication of the admission document which is needed in order to resume trading on the AIM market.
The company reckons it will have the document published early next month (June), which would hopefully lead to readmission within the next six to eight weeks.
The CPR estimates a current resource of circa 172 million tonnes (Mt) at 0.84% copper at Mowana, of which 26Mt sits within two existing pre-stripped 350 metre-deep pits.
Allowing for some overlap, Alecto estimates the resource at 162Mt at 0.84% copper. That equates to around 481,000 tonnes of copper in the measured and indicated category and a further 732,000 tonnes of copper in the inferred category.
Alecto intends to ramp up to an annualised rate of 12,000 tonnes of copper in the third quarter of this year. That would give Mowana a net present value (NPV) of US$87.5mln for the initial 12,000 tonnes per annum production scenario based on an average copper price of US$2.80 a pound (lb).
Production costs at the mine are expected to average US$1.50/lb over the mine life based on an average metallurgical recovery of 91%.
Additional upside still at Mowana
The numbers make for decent reading for Alecto and its investors, but the firm reckons there are possible option which, if taken, could boost the project further.
It’s considering installing a Dense Media Separation (DMS) unit which could see throughput double to 2.6Mt per annum, yielding around 23,000 tonnes of copper by the third quarter of 2018.
That would send the mine’s net present value soaring to US$245mln.
A future underground operation could add value at Mowana too. It would let Alecto tap into the rest of the resource which is located down dip and along the strike from the open pits currently being mined.
If Alecto were to go underground, it could extend the life of mine to 20 years.
“We are delighted that the CPR demonstrates the compelling economics of our project even without the installation of a DMS, now that the asset is unencumbered by debt,” added Jones.
“Even better is that it starts to show the tremendous potential upside available using modern techniques identified by our experienced industry partners.”