Havilah Resources Ltd (ASX:HAV) is not resting on its laurels after transitioning from explorer to producer in 2016 and is transforming into a sizeable copper producer, supported by cobalt, gold molybdenum, tungsten and tin.
Havilah’s Copper Growth Strategy is a blueprint for how the company plans to progressively develop its suite of copper projects in South Australia.
The objective is to bring its three advanced copper-gold-cobalt projects, Kalkaroo, Mutooroo and North Portia, into production as soon as possible.
Large metals inventory
Underpinning the strategy is a large JORC resource metals inventory, proven exploration prowess and operational success with partner Consolidated Mining and Civil (CMC).
Then there is also cashflow from the operating Portia Gold Project, strong interest from a major Chinese company and value-add from the key battery ingredient of cobalt.
The value steps for Havilah as it progresses its projects.
Plans for North Portia
Production is continuing at Portia, northwest of the mining centre of Broken Hill, while planning is well advanced for mining by CMC of the adjoining Portia North Copper-Gold Project.
North Portia has a 1 million tonne gold cap running at 1.5 g/t and an underlying 4 million tonne enriched copper-gold zone grading 1.2% copper equivalent captured in the initial open pit design.
Beneath this lies an impressive grade primary sulphide ore body, which is not included in the six-year mining plan.
Two large diameter diamond core holes were recently drilled at North Portia to provide samples for test work.
The PQ3 drill core samples of 83 millimetres in diameter will be used for metallurgical test work and geotechnical analysis.
This work forms part of a pre-feasibility study (PFS) for the project being carried out under an MOU signed with CMC.
Results will form the basis for upgrading the existing Portia gold processing plant to treat oxidised gold ore and copper sulphide ore from the deposit.
Shared work program with CMC
The North Portia resource of 11.3 million tonnes at 0.89% copper, 0.64 g/t gold and 500 ppm molybdenum is also being re-estimated utilising 56 infill holes drilled over the past two years.
It is expected that a revised resource estimate will also include cobalt.
A long section showing the North Portia deposit in relation to the Portia pit.
Under the MOU, CMC and Havilah have a shared work program designed to provide key information to assist them to determine a mutually acceptable arrangement leading to the development of North Portia at the earliest time.
Mutooroo cobalt studies
The latter will use its proprietary technology to determine whether cobalt from sulphide ore at Mutooroo can be recovered economically.
Mutooroo is west of Cobalt Blue’s Thackaringa deposit where metallurgical work has identified a potential processing path demonstrating strong cobalt recoveries for pyrite hosted cobalt.
The parties believe Mutooroo may have similar metallurgical requirements to commercialise cobalt.
Mutooroo has an estimated JORC measured and indicated sulphide resource of 5.9 million tonnes at 1.31% copper and 0.14% cobalt within a total sulphide resource of 12.5 million tonnes at 1.53% copper.
There is scope to materially increase the resource as only a portion of the known 2.1-kilometre strike has been drilled to JORC resource status.
Kalkaroo a company-maker
Havilah’s company-maker will be Kalkaroo, around 20 kilometres south of Portia, which contains at least 1.1 million tonnes of copper and 2.6 million ounces of gold as well as significant amounts of molybdenum and sulphur.
Another attractive ingredient is cobalt with an inferred resource of 193.3 million tonnes at 120 parts per million recently estimated for a total of 23,200 tonnes.
Chief executive officer Walter Richards said: “There is great potential for cobalt-derived revenue to substantially increase the return from the Kalkaroo project.
“Kalkaroo is already an attractive advanced stage open pit copper-gold project and the value is further enhanced by this additional cobalt resource.”
Copper a longer-term story
Havilah’s strategy recognised that while gold is a good high margin business, supported by a lower Australian dollar, copper is a solid longer-term story.
This is supported by increasing consumerism in developing economies along with the impending boom in electric vehicles (EVs) and renewable energy.
Technical director Chris Giles, who co-founded the company, said: “New copper developments have slowed at the time when usage is expanding with the highly copper intensive renewable energy generation and storage revolution, not to mention EVs and antimicrobial applications.
“The metal still has its traditional uses, which put it in great demand in the emerging economies of China, India and South East Asia, while the rapidly growing EV and renewable energy markets use a lot of copper.
“The average EV uses about 80 kilograms of copper as opposed to around 20 in conventional vehicles.”
Enhanced by cobalt
Giles said the story was enhanced by cobalt: “I believe this will be the decade of copper and the strong fundamentals for cobalt demand, will add icing to our copper cake.”
Kalkaroo has a total resource estimate of 223.8 million tonnes at 0.79 copper equivalent for more than 1.768 million tonnes of copper equivalent resources.
The deposit, which represents one of Australia’s largest undeveloped copper-gold deposits, remains open at depth and along strike, with considerable scope for expansion.
Substantial additional inferred resources underscore the potential to considerably extend mine life.
Havilah’s projects are in South Australia, adjacent to the rail line linking Sydney with Perth.
Havilah has always held high hopes for Kalkaroo and Giles said the resource upgrades had added to expectations, but the size of the project and the costs involved with developing it were challenging for a junior.
The company believes an agreement with China’s Wanbao Mining, a substantial international copper and cobalt producer, could change this.
The parties are reviewing a draft pre-feasibility study (PFS) prepared for Kalkaroo by RPM Global and funded by Wanbao.
The PFS focuses on the measured and indicated sulphide resource components of the resource and does not include the inferred resource or the saprolite gold cap resource.
Ore reserve estimates are expected to be released once the PFS has been finalised.
The objective of the PFS is to provide sufficient information for Wanbao to make a decision on future participation in project financing and development.
Further exploration plays
The Havilah story doesn’t end there with the company also having other exploration success.
This includes copper-gold and IOCG targets close to Portia, a copper skarn deposit at Croziers between Portia and Kalkaroo, and tin prospects at Prospect Hill in the northern Flinders Ranges.