Rockland Copper Project, Australia

The Rockland copper project is located approximately 17km west of Cloncurry in north-west Queensland, Australia. Owned by CuDECO, the 1,600ha mine is advancing towards production.

A detailed feasibility study of the mine is scheduled for completion by the second quarter of 2011. Construction is expected to begin in the first quarter of 2012 and first production will begin by late 2012 subject to regulatory approvals. The project has been budgeted at $200m. The mine is estimated to operate for approximately 10 to 20 years.

Rockland copper project reserves

As of August 2010 estimates, the mine contains 30.94Mt of measured and indicated resources grading at 1.24% Cu equivalent at a cut off grade of 0.8%. Inferred resources at a cut-off grade of 0.8% amount to 10Mt grading at 0.63% Cu and 0.09g/t Au.

CuDECO will upgrade the resource estimation based on the results of a 20,000m drilling programme that was initiated in late 2010.

Geology

The mine lies within the Eastern Succession of the Proterozoic aged Mt Isa Inlier located in the Duck Creek Anticline. The deposit is underlain by units of the east-south-east trending overhand jaspilite and mitakoodi quartzite that are of middle Proterozoic age. Interlayered structures of limestone, sandstone, quartzite, jaspilite and calc silicate are hosted in the overhand jaspilite. In certain areas, the Proterozoic basement is covered by surficial deposits of tertiary to recent aged alluvium and colluviums.

The mineralised lodes are hosted within a metamorphosed sedimentary complex with an east south east strike. The complex includes fine quartz and quartz magnetite sandstone, quartzite, siltstone, limestone and calcareous units including scapolitic siltstone. Copper mineralisation is largely associated with intrusive medium grained dolerite that is prominent across the area and appears to be conformable with the sediments.

Copper mineralisation occurs in a sequence of partially parallel linear zones with a west-north-west trend. 12 Cu-Co-Au orebodies have been identified to date. The two most prominent mineralised bodies include Las Minerale and Rocklands South. Both the structures contain ore grade and thick copper mineralisation over strike lengths of hundreds of metres.

The Las Minerale structure which measures up to 50m in thickness is highly mineralised up to a strike length of 700m. Oxidation at Las Minerale has been seen at vertical depths of over 100m. The central part of Las Minerale hosts prominent polymict breccias.

The mineralisation is associated with local alteration of biotite, actinolitic amphibole, red feldspar magnetite, calcite and silica. Substantial evidence of planar joints and fractures is available across the prospect area. The joints and fractures have served as dilatant channel paths to fluids that have metamorphosed and mineralised the rocks.

Mining and processing

The mine is expected to produce three million tons of ore annually from four open pits. Mining will be carried out by standard open pit methods including excavators and trucks. Seven Hitachi EX-1900 excavators will be used. Production will include copper / gold, cobaltic-pyrite, native copper and magnetite concentrate products.

The 3Mtpa processing plant will be equipped with circuits for recovering the native copper metal and conventional flotation circuits to treat supergene and primary sulphide zones. The plant for the native copper circuit will have high-pressure grinding rolls (HPGR), a German crushing technology that allows clean separation of the gangue material from the native ore. Following the HPGR and wet screening alljig, a high-efficiency jig from allmineral will be used for clean separation. A separate rate of 99% has been witnessed with the alljig.

Rockland drilling

A major drilling programme at the project began in late 2008. In order to outline the ore structures at Rockland, it was estimated that approximately 300,000m of drilling would be required. By the end of March 2010, 268,000m of drilling was completed. An additional 18,000m of infill drilling was completed at the main ore body between March and December 2010. The current drilling is targeted at low-grade zones.

Financing

Cudeco has secured $25m in funding from an unidentified Hong Kong-based resources company for the mine development. As part of a MoU, the company agreed to issue 6.25 million new shares, at $4 a share to the firm.

Contractors

The contract for the supply of the 3Mtpa processing plant was awarded to Sinosteel in March 2011. Sinosteel will supply all components and structures of the plant. China Nerin Engineering has been appointed as the independent consultant to the project.

The preliminary studies for the project were conducted by Lycopodium Minerals, a Brisbane-based engineering consultancy which is also expected to be the construction management contractor of the project.