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vol:
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Jiama Copper Gold Polymetallic Mine

The Jiama project is one of the largest copper gold polymetallic mines in China. The Jiama project is located within the Gangdise Copper Metallogeny Belt in Central Tibet, China and is approximately 60 kilometers east of Lhasa City along the Sichuan-Tibet Highway. The Jiama project is a large scale polymetallic deposit consisting of copper, molybdenum, gold, silver, lead and zinc.

The Company acquired the Jiama project on December 1, 2010 concurrent with the closing of its initial public offering and listing on the Stock Exchange of Hong Kong Limited. Commercial production began at the Jiama project in September 2010.

Phase I development was completed at the Jiama project in 2010 and included two open pits, a processing plant and an underground ore transportation system. 

Phase II expansion started commercial production on July 1, 2018. Jiama Mine’s Phase II consists of two series, Series I and Series II, each having a mineral processing capacity of 22,000 tpd.  The full design capacity of ore processing at Jiama Mine will increase to 50,000 tpd from the previous capacity of 28,000 tpd once Series II reaches full design capacity.

Copper Production

 


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Highlights

  • Open-pit and underground mines operation
  • A large, skarn-type and porphyry copper polymetallic deposit with well-developed hornfels-type mineralization located in the Gangdise Copper Metallogeny Belt
  • Principal product: Copper with gold and silver credits
  • Commercial production of Jiama Phase II Expansion commenced July 3, 2018
  • With Jiama continues to ramp up operations at Phase II expansion to full design capacity, the copper production in 2019 is expected to reach to approximately 132 million pounds.
  • Expected life of mine: 35 years
  • According to the feasibility study, production is expected to grow to 176 million pounds of copper per year when reach full design processing capacity

RECENT UPDATES:

2019 Q3 Financial Performance Snapshot

Jiama Mine Three months ended September 30, Nine months ended September 30,
  2019 2018 2019 2018
Copper sales (US$ in millions) 88.28 87.17 234.27 197.81
Realized average price 1(US$) of copper per
ound after smelting fee discount
2.18 2.26 2.11 2.36
Copper produced (tonnes) 18,347 16,515 49,306 37,313
Copper produced (pounds) 40,447,290 36,409,235 108,700,290 82,262,054
Copper sold (tonnes) 18,711 17,384 50,136 36,617
Copper sold (pounds) 41,249,785 38,325,511 110,530,961 80,726,808
Gold produced (ounces) 19,284 17,392 50,309 48,112
Gold sold (ounces) 19,209 19,366 51,606 44,604
Silver produced (ounces) 1,012,415 993,286 2,833,166 2,224,824
Silver sold (ounces) 998,245 1,008,220 2,930,788 2,152,984
 
Total production cost 2  (US$) of copper per
pound
2.92 2.50 3.05 3.08
Total production cost 2 (US$) of copper
per pound after by-products credits 4
2.06 1.71 2.23 2.21
 
Cash production cost 4(US$) per
pound of copper
2.29 1.90 2.38 2.32
Cash production cost 3  (US$) of copper per
pound after by-products credits 4
1.43 1.11 1.56 1.44
  1. A discount factor of 18.6% to 29.6% is applied to the copper benchmark price to compensate the refinery costs incurred by the buyers.  The discount factor is higher if the grade of copper in copper concentrate is below 18%.  The industry standard of copper content in copper concentrate is between 18-20%.
  2. Production costs include expenditures incurred at the mine sites for the activities related to production including mining, processing, mine  site G&A and royalties etc.
  3. Non-IFRS measure. See ‘Non-IFRS measures’ section of this MD&A
  4. By-products credit refers to the sales of gold and silver contained in the copper concentrate during the corresponding period.
  • During the three months ended September 30, 2019, the Jiama Mine produced 18,347 tonnes (approximately 40.4 million pounds) of copper, an increase of 11% compared with the three months ended September 30, 2018 (16,515 tonnes, or 36.4 million pounds). The increase in production is due to higher recovery rates of copper.
  • During the three months ended September 30, 2019, both total production cost of copper per pound after by-products and cash production cost of copper per pound after by-product increased as compared to the same period in 2018 due to lower grades of ore from the open-pit mine.  The Jiama Mine is currently developing its underground mine which is expected to produce higher grade ore, with anticipated completion by the end of 2021.  

2019 Q3 Production Update

Jiama Mine Three months ended September 30, Nine months ended September 30,
  2019 2018 2019 2018
Ore processed (tonnes) 3,932,431 3,372,400 10,169,419 7,204,141
Average copper ore grade (%) 0.58 0.68 0.62 0.71
Copper recovery rate (%) 80 72 78 73
Average gold ore grade (g/t) 0.26 0.30 0.27 0.39
Gold recovery rate (%) 59 54 56 53
Average silver ore grade (g/t) 16.26 15.39 16.67 17.21
Silver recovery rate (%) 49 60 52 56
  • According to the mining plan for the Phase II expansion, the Jiama Mine began to produce low grade ore from the open pit mine.  As a result, the Company expected the average ore grade to be lower than previous years which used higher grade ore from underground mining only. Production cost was also expected to be higher since the commencement of commercial production of Phase II due to the lower grade of ore and lower recovery rates.
  • During 2019, average metal recovery rates began to improve and were higher compared to 2018, as the ratio of oxide ore from the open pit has gradually decreased.

Mineral Resources Estimate

Jiama Project - Cu, Mo, Pb, Zn ,Au, and Ag Mineral Resources under NI 43-101
Reported at a 0.3% Cu Equivalent Cut off grade*, as of December 31, 2018

Class Quantity
Mt
Cu % Mo % Pb % Zn % Au g/t Ag g/t Cu
Metal
(kt)
Mo
Metal
(kt)
Pb
Metal
(kt)
Zn
Metal
(kt)
Au
Moz
Ag Moz
Measured 94.9 0.39 0.04 0.04 0.02 0.08 5.44 371 34.2 41.8 22.4 0.245 16.595
Indicated 1,369.1 0.41 0.03 0.05 0.03 0.11 5.93 5,590 463 732 460 4.762 261.145
M+I 1,463.9 0.41 0.03 0.05 0.03 0.11 5.90 5,961 497.4 773.7 482.4 5.008 277.740
Inferred 406.1 0.30 0.00 0.10 0.00 0.10 5.1 1,247 123 311 175 1.3 66.9

Mineral Reserves Estimate

Jiama Project Statement of NI 43-101 Mineral Reserve Estimate as of December 31, 2018

Class Quantity
Mt
Cu % Mo % Pb % Zn % Au g/t Ag g/t Cu
Metal
(kt)
Mo
Metal
(kt)
Pb
Metal
(kt)
Zn
Metal
(kt)
Au
Moz
Ag Moz
Proven 20.8 0.61 0.05 0.05 0.03 0.21 8.99 126.4 9.5 10.3 6.9 0.140 6.026
Probable 398.4 0.56 0.03 0.13 0.08 0.18 11.21 2,427.9 128.2 548.2 317.3 2.285 143.574
P+P 419.2 0.61 0.03 0.13 0.08 0.18 11.10 2,554.3 137.8 558.5 324.2 2.425 149.600

Notes: all Mineral Reserves have been estimated in accordance with the JORC code and have been reconciled to CIM standards as prescribed by the NI 43-101.

Click here for 2019 Q3 Financial Report

LOOKING FORWARD:

Exploration

  • In 2019, the Company initiated a large-scale exploration project for targeted resources and serving to production. The project includes surface drill of 33,390 +/-m, 25 drills, 500 +/- m of 1 hydrogeological drill and 800 +/- m of 2 engineering geological drills. During the third quarter of 2019, surface drill of 18,215.63 +/-m, 20 drills were completed, totaling 59.96% of the annual program.

Guidance Highlights for 2019:

  • The Company anticipates production of approximately 132 million pounds of copper in 2019.
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