Anax Metals eyes potential for base metal processing hub in the Pilbara underpinned by its Whim Creek project
Hub will offer third-party base metal deposit owners in the region with a processing option
Current Sulphur Springs scoping study represents a key step in the hub strategy
Non-binding funding proposals have been received for the Whim Creek project
Special Report: Anax Metals (ASX:ANX) is confident that third-party base metal asset owners within trucking distance of its Whim Creek copper project will come knocking at its door after unveiling plans for an ambitious production hub in the Pilbara region.
The proposed production hub plan will be underpinned by its robust Whim Creek project, which is more than capable of standing on its own.
Whim Creek, which is just 115km from Port Hedland, will process sulphide ore from the Mons Cupri, Whim Creek, Evelyn and Salt Creek deposits through a new 400,000tpa concentrator.
Under a definitive feasibility study released in April 2023, the project was envisioned as a base metals operation with a production life of 8.5 years and very modest $71m pre-production capex.
This will generate free cash flow of $340m with a NPV and IRR – both measures of profitability – of $224m and 54.3% respectively through the production of 55,000 tonnes per annum of copper, zinc and lead concentrates (~12,000t copper equivalent).
Anax also intends to use fully permitted existing heap leach facility to produce copper cathode and zinc sulphate from mined low-grade ore starting in the second year of operation.
Based on a Scoping Study released in September 2023, Anax believes that by using both the heap and the concentrator to process ore mined at Whim Creek, cashflow would increase to $411m, NPV to $270m and the IRR to 55.3%.
Anax has secured regulatory approvals for Whim Creek and is in discussions with several commodity traders and investment funds with a view to securing financing for its development.
The Whim Creek project. Pic: Anax Metals
A Pilbara base metals hub
While Whim Creek is certainly strong enough to stand on its own, the Company clearly believes that it can serve as the basis for a more significant regional hub that would offer owners of smaller and otherwise uneconomical deposits the opportunity to monetise their assets.
ANX has now started on studies for a 20,000tpa copper equivalent production hub at Whim Creek that will offer its neighbours a potential processing solution.
This production will be split equally between the concentrator and the heap leach facility.
As a first step in this strategy, the company and its 20% JV partner Develop Global (ASX:DVP) have already started a scoping study into the feasibility of transporting oxide ores from DVP’s 100%-owned Sulphur Springs deposit to Whim Creek for heap leaching into saleable copper and zinc products.
Under the processing hub studies, the JV will focus on the recently refurbished heap leach infrastructure and downstream solvent extraction and electrowinning facilities.
ANX intends to leverage off infrastructure already in place to control costs and maximise the production of copper cathode.
The production of zinc sulphate and hydroxide products will also be considered as this could add significant value to the project.
“We look forward to establishing a Pilbara base metal alliance for several regional base metal projects to potentially participate in near term production planned for Whim Creek,” ANX managing director Geoff Laing said.
“A centralised processing hub capable of treating a range of base metal ores within the Pilbara region, producing battery metal and agricultural products, will deliver significant value to Anax and alliance partners.
“In addition to the ongoing study work, Anax is planning a renewed focus on the immediate resource growth potential at our high-grade Evelyn and Salt Creek resources, both of which are open at depth.”
ANX has also received non-binding debt-funding proposals for Whim Creek from both commodity traders and mining funds with technical due diligence currently being undertaken.
Upcoming exploration activity
During the upcoming field season, the company plans to prioritise near-mine exploration at the Evelyn and Salt Creek deposits.
Evelyn is a massive sulphide deposit about 25km south of the Whim Creek processing facility along the Croydon-Whim Creek road.
RC drilling completed in 2022 that targeted down plunge extensions of the high-grade copper-zinc resource zones returned assays topping up at 13m at 4.46% copper, 3.1% zinc, 45g/t silver and 1.61g/t gold from a down-hole depth of 204m with copper content appearing to increase at depth.
While this resulted in material increases in contained metal content, Evelyn remains open down plunge, which the company will test in its upcoming program.
ANX notes that the current mine design extends to the base of the current resource and any extensions are anticipated to be converted into reserves in future.
A high priority exploration target is also present about 200m north of Evelyn where two shallow holes intersected copper, zinc and gold.
Planned extensional drilling at the Evelyn deposit. Pic: Anax Metals
Meanwhile, drilling completed in 2016 at Salt Creek was successful in extending high-grade copper and zinc-lead mineralisation down-plunge.
Opportunities to further increase the Salt Creek resource are present at the eastern and western lodes, which are both open down-plunge.
Feasibility studies have demonstrated that current defined resources are able to support the underground capital development into these areas, and the company believes that any discovered resource extensions can be readily converted into reserves.
This article was developed in collaboration with Anax Metals, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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