AuKing Mining Ltd (ASX:AKN) is set to advance its Koongie Park Copper-Zinc Project in Western Australia's Hall's Creek region after a scoping study confirmed its potential to be a financially robust, globally competitive operation.
The completed scoping study revealed plans for the mining operation to source mineralisation from four open-pit mines - Sandiego, Mt Angelo North, Onedin and the later-staged operation at Bommie - alongside an underground mine at Sandiego.
AuKing will now progress the project to more advanced development studies.
The total mineral resource estimates (MRE) across these deposits comprise:
- Sandiego - 4.1 million tonnes at 1.38% copper, 4.28% zinc and 25 g/t silver;
- Onedin - 4.8 million tonnes at 0.7% copper, 3.2% zinc, 0.3 g/t gold and 38 g/t silver;
- Mt Angelo North - 1.72 million tonnes at 1.4% copper, 1.4% zinc and 12.3 g/t silver; and
- Bommie - 95.6 million tonnes at 0.27% copper.
With sufficient funds in hand, AKN is finalising its forward work plan for the next stage of studies.
"Compelling economics"
AuKing CEO Paul Williams said: “The results of the scoping study show the potential to establish a significant copper-zinc mining operation near Halls Creek in northeast Western Australia.
“The exploration team worked extremely hard throughout late 2021 and 2022 to provide a solid foundation for the scoping study.
“The proposed contribution of the nearby deposits of Cazaly Resources also makes a significant contribution to the project economics.
“The AuKing board is delighted with the robustness of the project and its resilience to multiple factors that the resource industry is experiencing in Western Australia with increasing cost escalation and market conditions.
“The development team will now diligently progress all the necessary technical components and engineering work streams to ensure the project is sufficiently de-risked allowing the company to progress further development studies and possibly a final investment decision late next year.
“The board has approved the commencement of further studies at the project due to the compelling economics and the continuing strong copper market fundamentals.”
Financial outlook
In terms of financial returns, the scoping study provides a promising outlook, indicating strong project economics, including:
- pre-production capex of A$134 million, with an estimated payback period of 2.45 years;
- a pre-tax NPV8% of approximately A$176.9 million and an impressive 39.7% IRR; and
- life of mine EBITDA of A$443.8 million with an average operating cash flow of A$40.3 million per annum.