Caravel Minerals : PFS Update - Caravel Copper Project

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ASX:CVV

17 February 2022

PFS UPDATE - CARAVEL COPPER PROJECT

Highlights

• Pre-FeasibilityStudy is on track for delivery end of March. Work is largely complete on mine design and planning with all other areas progressing as planned
• The mine plan is now based on diesel-electric trucks, drill rigs and shovels, utilising grid connected electric power (trolley assist for trucks and cable connection for rigs and excavators). These proven technologies allow substantial advantages in fuel cost, emissions reduction, performance and availability
• The mine fleet also utilises autonomous control systems for all trucks and drill rigs, with potential to extend this to other services such as blast hole sampling and charging
• 'ACE' technologies - the combination of Automation, Communication and Electrification - enable substantial cost savings, reduced operating risks and improved safety. New pit designs incorporate provision for autonomous vehicles and electric trolley infrastructure
• Preliminary mine schedules from the new designs show strip ratios and ore grades consistent with the previous scoping study model. Further work is planned (in DFS) to access higher-grade ores earlier in the schedule
• The new mine schedule sources all materials for construction of the Tailings Management Facility from the overburden pre-strip, allowing significant efficiencies in material costs
• Appointment of major construction contractor CIVMEC to review construction planning and provide advice on modularisation and other strategies to maximise the Project's close proximity to Perth and reduce costs and implementation risks
• PFS completion (Q1 2022) will position the Project to enter the Definitive Feasibility study phase in a strong copper market and timed to meet forecast rising demand

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Caravel Copper Project

Pre-Feasibility Studies for the Caravel Copper Project are progressing as planned and due for completion at the end of March 2022. This update reports on progress with the studies and information on changes to the scope, particularly in relation to details of the mine design and planning.

The project overview is outlined below describing the main components of the Project on which the PFS is based.

Overview

Location	12km west of Wongan Hills, 150km north-east of Perth, Western Australia
Tenements	Exploration licences E70/2788, E70/3674, E70/3680, R70/0063
Mineralisation	'Porphyry style' chalcopyrite sulphide mineralisation associated with foliated granitic
gneiss
Mineral Resources	1.18 billion tonnes @ 0.24% Cu and 48 ppm Mo for 2.84Mt of contained copper
(0.1% Cu cut-off)
Mining Method	Conventional open-pit at Bindi (approximately 15 years) then Dasher post year
15. Diesel-electric trucks and shovels using trolley assist and cable
Operating Structure	Owner-operator
Processing Method	Standard crush, grind, flotation circuit
Processing Capacity	12Mtpa of ore (years 1 - 5), ramping up to 24Mtpa from year 6
Recovery	~90% Cu
Conc. Production	~35,000 tonnes per annum (years 1 - 5), ~55,000 tonnes per annum (from year 6)
Royalties	Estimated $810 million
Workforce	150 - 250 long term jobs, 500 - 700 construction jobs
Power	Existing access to grid-power from WA State (SWIS) grid
Water	Remote borefield and 60km pipeline
Conc. Export	Concentrate trucked by public road to Bunbury Port (340km)

Mine Design

The PFS mining studies are based on the new Resource released in November 2021 (see ASX Announcement 23 November 2021). Substantial parts of the Resource are based on approximately 50m by 50m infill drilling and have been classified as Measured, providing high confidence for the mine planning and early grade schedules.

Key changes from previous studies are the adoption of new, but well proven, 'ACE' technologies for electrical drive systems and autonomous control. Access to the South-West Interconnected System electricity grid (SWIS) allows an electric mining fleet to utilise low-cost grid power in substitution for diesel fuel. Modern diesel-electric power trains can be driven by either diesel or external electrical power. The electric drives offer substantial advantages in power, efficiency and availability with significant reduction in diesel consumption and emissions when connected to the grid. The diesel motor allows flexibility to operate whilst not connected to the grid power and is also more efficient than conventional drives.

The Mine Plan will be based on electric shovels (waste mining), electric blast-hole drill rigs and electric trolley assist on trucks in the haulage fleet - Figure 1. Modelling based on a 28+ year project life and pit depth of over 360 metres shows the increased speeds and efficiencies from trolley assist allow a reduction of at least two haul trucks compared to a standard diesel-powered truck fleet. The capital cost savings on trucks are expected to be roughly equivalent to the capital cost for installing trolley assist.

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Figure 1:  A trolley assist overhead transmission line for a haul truck. Photo supplied by Komatsu Australia.

Mine planning is also incorporating the use of autonomous vehicles as part of a broader adoption of remote control and supervision in both the mine and the mill. Autonomous operation of blast hole rigs and haul trucks is now an established practice in the WA mining industry with well-established operating procedures and technical support from both the equipment vendors and independent consultants. Excellent communications services are available through the local optic fibre connection as well as an operating methodology that takes advantage of the ability to mobilise people and equipment to site in less than 2 hours.

Internal studies supported by vendor operational data and studies by Orelogy estimate the adoption of ACE (Automation, Communication, Electrification) technologies will result in operating cost savings of around 10-18% compared to conventional diesel only options, with labour reduction, diesel savings and improved operating efficiencies as the key factors - Figure 2.

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Figure 2:  Caravel Copper Project PFS level mining cost model (as at 17 February 2022) cost savings in red based on utilisation of 'ACE' compared to a conventional fleet.

The use of electrification in the mining fleet allows a significant reduction in diesel usage compared to a conventional fleet with a proportional reduction in carbon emissions - Figure 3. Overall emissions will need to account for those related to sources of electricity generation, which is not yet determined and will be examined in more detail in the PFS report.

Figure 3: Estimated CO2 comparison for diesel-electric fleet and conventional diesel fleet.

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Mining Schedule

The PFS mining schedule has matched the grade from the 2021 Scoping Study in the first 5 years at 0.32% with the detailed mine design now incorporating allowances for the operation of autonomous vehicles and provision for electrification infrastructure.

The design and schedule also incorporates construction of the Tailings Management Facility (TMF) to utilise the significant clay resources within the Bindi overburden. Ensuring the highest standards for tailings management is a key focus for the mine design and permitting process. The identification of suitable construction materials withing the overburden pre-strip has allowed scheduling the removal of overburden to be incorporated into the construction of the TMF. This provides substantial efficiencies in the construction process and also allows more conservative designs for the TMF taking advantage of the availability of material.

Once these key aspects of the design are finalised, the focus during the DFS will move to detailed scheduling and accessing higher grades ores earlier in the mine schedule.

Metallurgy

Metallurgical test work is based on the revised process flowsheet where ore is primary crushed, ground in a SAG-ball circuit including pebble crushing followed by roughing and cleaning flotation before filtering. A P80 of 185 µm has been selected as the optimum grind size for the circuit however recent test work has also explored the opportunity for fully autogenous grinding and coarse particle flotation (CPF). This technology may allow for lower operating costs and increased throughput. Further work is being planned to evaluate the economic viability of the CPF as feasibility progresses.

Current work is evaluating the optimum regrind size for the flotation cleaning circuit. Larger mass flotation tests are underway to provide samples for thickening test work as well as tailings characterisation. This work is also providing larger masses of concentrate for further test work.

There has been minimal variability seen in the test work to date however further testing this month will evaluate the recoveries of paying metals and deportment of deleterious species utilising composites that represent the various zones and structure of the deposit including those materials that will make up the early years of production.

Additional diamond drill holes are currently being drilled for expanded metallurgical testing during the DFS.

Engineering

Ausenco has performed a detailed review of existing and new test work and data to optimise the Caravel flowsheet. This includes selection of a robust comminution circuit design that allows for staged expansions during the life of the project. Furthermore, a review of flotation and regrind technology took place. This review resulted in an optimised configuration of the flotation circuit and included coarse particle flotation that allowed for additional circuit throughput without increasing mill size, improving project NPV.

Ausenco has also considered overall developments to the Caravel Copper Project (in areas such as mining and tailings) and worked with Caravel Minerals to optimise the location of the process plant and associated infrastructure to address anticipated needs over the life of project. Furthermore, Ausenco has introduced a compact process plant layout, resulting in an anticipated reduction in bulk materials required to build the process plant without negatively impacting on plant operability or maintainability.

On the basis of the revised flowsheet and optimised plant layout and location, priced mechanical and major electrical equipment lists have been generated. Material take-offs for earthworks, concrete and