Elementos recently commissioned an independent Open Pit Scoping Study for stage 2 of its three-stage development of Cleveland. The outcomes of the study demonstrated that stage 2 is a financially robust and technically low-risk project.
With a mining inventory of 600,000 tonnes at 0.50% tin (Sn) and 0.14% copper (Cu) and over 98% of the ore tonnes being Indicated Mineral Resources, the study projected a before tax cash flow of A$21 million, in addition to the cash flow from stage 1. These results were generated from mining five pits with an average stripping ratio of 5.1 at a combined rate of 200,000 tonnes per year over 3 years. The net direct cash cost (C1) of US$8,303 per recovered tonne of tin places the project in the bottom half of the industry cost curve.
Importantly, the capital requirements are fully funded by cash flow from stage 1 and, as such, stage 2 will not require external financing.
Production from the stage 2 high-grade open-pit mine is scheduled to start in FY2018, supplementing production from the stage 1 tin-copper tailings reprocessing operation, which is expected to commence operation in FY2017. Developing an open pit mine provides an important link between the reprocessing of tailings and the redevelopment of the Cleveland Underground.