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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 Q2 Financial Performance Snapshot

Jiama Mine Three months ended June 30 Six months ended  June 30,
  2019 2018 2019 2018
Copper sales (US$ in millions) 76.63 72.43 145.99 110.64
Realized average price 1(US$) of copper per        
pound after smelting fee discount 1.85 2.41 1.87 2.41
Copper produced (tonnes) 16,126 13,738 30,959 20,799
Copper produced (pounds) 35,551,640 30,268,343 68,253,000 45,852,819
Copper sold (tonnes) 16,300 12,613 31,425 19,233
Copper sold (pounds) 35,936,014 27,807,478 69,281,182 42,401,297
Gold produced (ounces) 15,628 20,497 31,025 30,720
Gold sold (ounces) 16,817 15,539 32,398 25,239
Silver produced (ounces) 844,748 768,332 1,820,751 1,231,538
Silver sold (ounces) 936,765 712,740 1,932,544 1,144,764
Total production cost 2  (US$)        
of copper per pound 3.18 2.96 3.13 3.61
Total production cost 2  (US$) of copper per        
pound after by-products credits 4 2.39 2.07  2.3 2.65
Cash production cost 4(US$)        
per pound of copper   2.49   2.26  2.43   2.70
Cash production cost 3  (US$) of copper per        
pound after by-products credits 4 1.70   1.37     1.6 1.74
  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 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 during the corresponding period.
  • During Q2 2019, the Jiama Mine produced 16,126 tonnes (approximately 35.6 million pounds) of copper, an increase of 17% compared with Q2 2018 (13,738 tonnes, or 30.3 million pounds). The increase in production is due to the commercial production of the Series II, Phase II expansion.
  • During Q2 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 ores produced from the use of open-pit mine. The Jiama Mine is currently developing a new section of the underground mine which is expected to have higher grade ore, with anticipated completion by the end of 2020.

2019 Q2 Production Update

Jiama Mine Three months ended June 30, Six months ended June 30,
  2019 2018 2019 2018
Ore processed (tonnes) 3,224,395 2,563,720 6,236,988 3,831,741
Average copper ore grade (%) 0.62 0.73 0.65 0.73
Copper recovery rate (%) 81 74 77 74
Average gold ore grade (g/t) 0.28 0.50 0.29 0.48
Gold recovery rate (%) 54 57 54 57
Average silver ore grade (g/t) 15.13 18.44 16.93 18.81
Silver recovery rate (%) 54 54 54 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 the second quarter of 2019, average metal recovery rates have begun to improve and were higher as 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 Interim Report

2019 Q2 Copper Production Highlights

  • For Q2 2019, Copper production from the Jiama Mine increased by 17% to 16,126 tonnes (approximately 35.6 million pounds) from 13,738 tonnes (approximately 30.3 million pounds)
  • For the first half 2019, the Company’s total production was30,959 tonnes (approximately 68.3 million pounds) of copper. Copper production from the Jiama Mine increased to 30,959 tonnes (approximately 68.3 million pounds) from 20,799 tonnes (approximately 45.9 million pounds) for the same period in 2018.

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. The pre-construction preparation was completed in the second quarter, surface drill of 5,100 +/-m, 9 drills had completed, totaling 16.78% of the annual program. 6 surface drills are under preparation for the next stage.

Guidance Highlights for 2019:

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