Guelb Moghrein is a copper-gold mine located in Mauritania, 250 km northeast of the capital, Nouakchott. The deposit is situated in the Akjoujt area of the Mauritanides Orogenic Belt. Ore is primarily chalcopyrite and pyrrhotite, hosted in ferro-magnesian carbonate formed by hydrothermal deposition from thrust faulting. The area has been known to contain copper since 4,000 BC to 6,000 BC, but first attracted commercial interest in the 1930s. An open pit was developed in the 1970s but closed due to technical challenges and elevated fuel prices. After numerous attempts by various entities, commercial production commenced in October, 2006. At the time of publication of the Technical Report, 329 kt copper and 553 koz gold have been produced at Guelb Moghrein.
At the time of publication of the Technical Report, Guelb Moghrein had been operating for ten years. A new geological model was developed, hence providing the impetus for publishing the Technical Report, summarizing the remaining six years of mine life and closure. An additional 21.3 Mt ore will be mined with 54 Mt waste, resulting in a LOM strip ratio of 2.5. With the introduction of a new SAG mill, Guelb Moghrein is capable of processing at a rate of 4 Mtpa at reduced cost. LOM recoveries of 89.9% copper and 62% gold are expected. Including stockpiles, Guelb Moghrein is projected to process 29.9 Mt to produce 204 kt copper and 408 koz gold. The cash flow analysis presented by First Quantum generates an undiscounted cash flow of US$479 M, US$365 M when discounted 10%, demonstrating robust economics for the remaining life of mine. This includes a CAPEX expansion of US$27.5 M and closure costs of US$36 M, with LOM operating costs at US$27.31/t-processed.
| Tonnes (Mt) | Cu (%) | Au (g/t) | Cu (kt) | Au (koz) | |
|---|---|---|---|---|---|
| Reserve | 29.9 | 0.76 | 0.68 | 227.2 | 653.7 |
| M+I | 13.7 | 0.84 | 0.69 | 139.0 | 313.5 |
| Inferred | 2.4 | 0.76 | 1.95 | 18.2 | 150.5 |
Guelb Moghrein has been producing for a decade and operational risks are minimized. Mining Momentum is of the opinion that the project is very robust, albeit with limited mine life remaining. While relatively low in throughput, the project is highly profitable, with over a quarter of revenue originating from gold content. With commodity prices well above US$3/lb copper and US$1,200/oz gold, revenue upside in excess of 60% may be expected. Resource and Reserve expansion should also be considered given elevated metal prices. Unfortunately, it is difficult to determine how much of the 16 Mt Resource is mineable since it was wireframed. A Resource pit optimization should be run to determine economical limits taking waste rock removal into consideration. With current metal prices, an underground mining scenario should also be evaluated. Using the existing M+I Resource of 13.7 Mt at 0.84% copper and 0.69 g/t gold, seven to ten years of underground mine life may be possible at a throughput of 1 Mtpa, to generate revenue in excess of $100/t.
The information presented above does not constitute investment advice. This is a summary from the NI 43-101 Technical Report effective March 31, 2016 (INSERT), with commentary from the author. Statements above do not represent the views of First Quantum Minerals. If any discrepancies arise, the information contained within the NI 43-101 are official and final. For latest depletion data, please refer to the AIF update.