KBL Mining has secured a major investment in its Mineral Hill copper mine in central west New South Wales, with Chinese foreign trade group Guandong Guangxin Mining Resource Group (GMR) buying an $80-million interest in the project.
The 25% share in the company’s Mineral Hill and Iron Duke projects is the subject of a Memorandum of Understanding (MoU) recently signed by GMR. The MoU package also details a 15% fully diluted share of about 33 million shares in KBL as well as discounted life-of-mine offtake for copper concentrates.
“We are delighted that this opportunity, with a company the size of GMR, not only provides us with capital to rapidly expand Mineral Hill in 2012 and to pursue other opportunities, but provides us with a long term stable partner to assist our expansion from a single-mine company to a medium sized, multi-mine corporation,” says KBL’s executive chairman Jim Wall. “This can now occur in a timeframe substantially sooner than KBL could achieve on its own.”
GMR is conducting on site due diligence and the MoU will be voted on by KBL shareholders in March. GMR is a subsidiary of the government-owned Guandong Guangxin Holding Company, which is the largest foreign trading group in southern China’s Guandong Province.
The 250,000 tonne/annum Mineral Hill mine is about 65km north of Condobolin. It was mothballed in 2005 by Triako when copper and gold prices plummeted. Substantial resources were left undeveloped and the discovery of the nearby high grade gold-silver Pearse project has allowed KBL to step in and cost-effectively refurbish and upgrade the operation.
Additional production of gold and silver dore from Pearse will raise the Mineral Hill annual production to 5000 tonnes of copper, 21,350 ounces of gold and 255,000 ounces of silver from mid-2012.
Commissioning of the processing plant was completed in the fourth quarter of 2011 and as the quality of development ore has improved, so too has plant performance. Copper recoveries are now in the range of 85-90% and concentrate grades between 22-24% copper. The plant has also increased its daily concentrate production to 50 tonne, and has shipped four containers of concentrate to China to date.