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Cape Lambert Resources engineering study supports low-cost cobalt operation

Last updated: 08:00 17 Jul 2018 AEST, First published: 12:55 16 Jul 2018 AEST

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The acid leach plant will produce a mixed hydroxide precipitate product

Cape Lambert Resources Ltd (ASX:CFE) has received a completed engineering study for a leaching plant at the Kipushi Cobalt-Copper Tailings Project in the Democratic Republic of Congo (DRC).

As per the study, existing tailings from the project will be processed through a newly built 1 million tonnes per annum acid leach plant adjacent to the existing flotation plant.

The value of the project is highlighted by the low forecast operating cost of US$64.66 per tonne against cobalt prices of US$70,000 per tonne.

READ: Cape Lambert Resources attracts more funds for cobalt-copper project

The study and its associated financial metrics demonstrate that the Kipushi project is very robust.

Cape Lambert’s chairman Tony Sage said: “I am very pleased that we pursued the leaching alternative to process the Kipushi tailings, as the recoveries for the leaching are far superior than achieved with the existing flotation plant.

“Preliminary details from the engineering study provided the basis for the decision to build the plant, which will be done in earnest to capitalise on the current high price for cobalt.”

A basic financial model was created by project operator Soludo Lambert Mining SAS, a 50:50 JV between CFE and local entity Paragon Mining SARL, to assess the financial visibility of the project.

This outlined total revenue of US$676.7 million and NPV on profits of US$216.6 million.

With a market cap of around $32 million and shares trading at 3.6 cents, the figures indicate that Cape Lambert is undervalued.

Engineering study follows recent leach test work success

The engineering study was undertaken following the positive results achieved from a leach test work program.

Recoveries of 90% for copper and 85% for cobalt have been achieved from laboratory scale test work undertaken to date.

The process flow sheet that has been developed was based on the test work completed.

Decision made to build leaching plant

The board of Soludo Lambert has made a decision to pursue construction of the leaching plant and appointed consultant Minnovo in May 2018 to undertake the detailed design.

The total capital budget amounted to US$35.86 million with costs to an accuracy of ±35% summarised below.

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