Quantum nabs Kansanshi

With three resuscitated producers under its belt, First Quantum Minerals (FM-T) has turned its sights on the historic Kansanshi copper-gold deposit in Zambia.

The mid-tier producer, which operates the nearby Bwana Mkubwa, Mufulira and Nkana mines, acquired an 80% stake in Kansanshi by assuming US$25 million in net debt, agreeing to pay $50,000 and issuing 1.4 million treasury shares to Phelps Dodge (PD-N). Another US$25 million, less the marketable value of the shares, is payable 30 days after commercial production begins.

State-owned Zambian Consolidated Copper Mines (ZCCM) holds the remaining 20% interest.

Kansashi is one of several deposits in the Central African Copper Belt. Local mining can be traced back to the fourth century, though most activity has taken place in the past 100 years, when roughly 80,000 tonnes of copper were produced.

In 1997, Cyprus Amax Minerals (now a subsidiary of Phelps Dodge) acquired the project as part of Zambia’s privatization process. The company subsequently sank 80,000 metres of drilling to table a preliminary feasiblity study early last year.

Resources are pegged at 267 million tonnes grading 1.28% copper and 0.16 gram gold per tonne. The deposit lies close to surface, making it potentially amenable to open-pit mining methods.

Mineralization occurs as steeply dipping, generally north-south-trending quartz-carbonate veins and as flat, bedding-controlled layers in altered phyllitic rocks. Weathering has changed the primary sulphides to oxide, mixed and hypogene minerals.

First Quantum is proceeding with a bankable feasibility study, which it expects to complete in 12 months. Commercial production would follow in 30 months if all goes as planned.