ASX-listed Terramin Australia, through its subsidiary, Western Mediterranean Zinc Spa (WMZ), has completed an updated Definitive Feasibility Study (DFS) for the development of the Tala Hamza-Amizour (Tala Hamza) zinc and lead project in Algeria. The DFS indicates that the project – with the potential to produce an average of 129 300 tonnes per annum (t/a) of zinc concentrate and 26 000 t/a of lead concentrate from an underground mining operation – would deliver strong financial returns over a 21-year mine life.
Tala Hamza is located near Bejaia in northern Algeria, approximately 270 km east of Algiers. The updated DFS covers a zinc and lead deposit in the area of the Oued Amizour Mining Exploration Permit 6911 (PEM 6911), an area of 122,76 km2 held by WMZ. Exploration Permit 6911 expired 31 January 2018 and is expected to be superseded by a Mining Licence (ML).
The 2018 DFS contains a number of changes to the 2010 DFS which will eliminate, or reduce to an acceptable level, environmental and social concerns with the block cave mining method. This method would have resulted in a large surface depression and increased water management requirements, both of which were deemed by regulators not to be appropriate for the Bejaia area.
The changes include optimisation of previous studies, updating the ore reserve, a new mining method, a revised plant layout, removal of the tailings storage facility and replacement with dry stacking, and updated economic analysis.
The new mining method, Underhand Drift and Fill (UDF), is a small scale, selective mining method which has a higher associated mining operating cost compared to the originally preferred block cave mining method. The adoption of the new mining method has increased the mine cut-off grade and reduced mining dilution, overall resulting in a net reduction in minable ore tonnes over the life of mine (LoM).
Updated flowsheets, capital and operating costs, completed in conjunction with engineering company China ENFI Engineering Corp (ENFI), confirm the viability of an underground operation with a 1,4 Mt/a capacity process plant (utilised at the rate of 1,32 Mt/a), which can deliver an average of 129 300 t/a of zinc concentrate at 54 % Zn (90 % recovery) and 26 000 t/a of lead concentrate at 63 % Pb (73 % recovery), at an average C1 cash cost of US$0,53/lb and All-in Sustaining Cost (AISC) (including royalty) of US$0,61/lb.
Financial analysis of the project economics, based on metal prices averaging US$1,25/lb zinc and US$1,05/lb lead, indicates the base case project generates a strong financial return, with a post-tax nominal NPV (8 %) of US$303 million and an IRR of 14 %.
Total pre-production capital for the project is expected to be US$341 million. Total LoM capital inclusive of pre-production capital and sustaining capital is estimated at US$486 million.
Commenting on the DFS at the recent Paydirt ‘Africa Down Under’ Conference in Perth, Terramin Australia CEO Richard Taylor said: “Terramin is excited to be able to release details of the Tala Hamza revised DFS. The result is the outcome of steady and patient negotiation with our joint venture partners. It was important to engage and work consistently with our counterparts to ensure a robust long-life project that will be a flagship project in Algeria.
“Location is everything with Tala Hamza – proximity to deep water Mediterranean ports, well developed infrastructure, cheap and reliable energy and an educated workforce, make this a potential world class project.
“Getting the base case project at Tala Hamza permitted opens up optionality for expansion and exploration both within the existing exploration area and further afield in a highly prospective emerging mining country which is looking to diversify from oil and gas.”
The project surface footprint has been significantly reduced in size from the 2010 DFS. The land needing to be acquired for surface infrastructure has been minimised, without reducing flexibility for expansion.
The mineralisation at Tala Hamza is approximately 650 m across strike, 600 m down-dip, typically 150 m thick and located between 120 m and 680 m below surface. Overall, the mineralisation plunges approximately 20 deg to the south-east.
The deposit has a mineral resource of 53 Mt (at a cut off of 3,0 % Zinc Equivalent (Zn.eq) including an indicated resource of 44,2 Mt. Total ore (material mined at a project evaluation cut-off grade of 4,4 % Zn.eq) is 25,9 Mt at 6,3 % Zn and 1,8 % Pb with a nominal mine production rate of 1,32 Mt/a and an estimated mine life of 21 years (23 years including pre-production). The deposit remains open to the east and south-east, allowing the potential to expand production without
reducing mine life.
As mentioned above, the mining method now envisaged for the exploitation of the deposit is Underhand Drift and Fill. Activities include: development of the mine access (via a decline) and supporting infrastructure; mining of the ore using conventional drill and blast; loading the ore into mining trucks and transporting the ore to surface; and backfilling of extracted production areas.
UDF is a top down mining method where a cemented paste tailings backfill is used in combination with steel reinforcing, providing sufficient fill strength to allow mining to occur directly beside and below the fill. The method permits mining in low strength rock types and provides for improved control of work areas.
Among the benefits of UDF are engineered roof support and safe mining conditions in weak orebodies. The continuous filling system prevents ground relaxation and subsidence on surface while the selective mining method allows for separation of ore and waste with minimal dilution. The method also allows potential for future extraction of lower grade material as metal prices rise. The use of tailings for backfill reduces tailings storage on surface.
The mineable ore zone at Tala Hamza extends from around 0 mRL to minus 365 mRL. The flat plunge and variable nature of the orebody is such that mining shapes vary significantly with depth. Ore zone strength is relatively weak, varying from less than 5 MPa to an average of 25-30 MPa.
Extraction is planned to be via four lifts (‘panels’). Each panel is made up of a series of 5 m high slices (‘flitches’) which vary from 30 m x 50 m to 500 m x 300 m in surface area. The flitches are in turn divided into up to five ‘districts’. Each district will be mined by jumbo in blocks of 3 000 to 6 000 tonne stopes, sometimes referred to at other operations as ‘cells’. This will be done by developing 5 m wide ore drives up to 50 m long and, depending upon the local rock quality, stripping up to 10 m wide. Each cell will be filled with steel-reinforced cemented paste-fill before mining the production block alongside.
Flitches are expected to be mined in a downwards or ‘underhand’ progression to allow working under an engineered roof.
Ore from the Tala Hamza deposit can be treated with conventional froth flotation to produce high-grade zinc and lead concentrates. The bond ball mill work indices of samples tested ranged from 12,0 kWh/t to 14,4 kWh/t indicating the ore is relatively soft. Ultrafine grinding with Isa Mills – or their equivalent – will be used to improve the concentrate grade.
The process plant is expected to be operated as a continuous process with a throughput capacity designed to meet the planned production rate of 4 000 t/day. It has been situated in a flat area of land above the main deposit known as ‘Valley B’. The plant starts from the upper valley with ore feed from the ROM pad progressing to the concentrate filtration and storage area down the valley. The plant cascades down the valley using the natural topography to minimise energy and construction costs.
Zinc and lead concentrates are expected to be shipped out of the Port of Bejaia to smelters in the Mediterranean and other parts of Europe (possibly also domestic sales) using a ‘container-in and bulk-out’ ‘rotainer’ system. Both zinc and lead concentrates are expected be shipped in dry bulk form with transport moisture limits (TML) of less than 10 % and greater than 6 % to control dust.
Tala Hamza will be the largest base metal mining operation in Algeria. Under full production, the study estimates WMZ will employ 600 people, with over 550 of them being Algerian. Terramin will purchase as much as it can locally and will make a significant contribution to the local economy, particularly utilising services companies and those local entities involved in earthworks and construction.
Terramin says the next steps in project development will include formal submission of the DFS to the Government of Algeria; FEED (Front End Engineering and Design) works; early works road access and administration establishment; the establishment of an Owners Team; the EPCM tender process; and financing discussions with Algerian banks.
Terramin owns 65 % of the Tala Hamza project. Its joint venture partners are Entreprise Nationale Des Produits Miniers Non Ferreux et des Substances Utiles (ENOF) (32,5 %) and Office National la Recherche Géologique et Minière (ORGM) (2,5 %), which are both government entities. The Government of Algeria has indicated that it intends to fund its full 35 % share of the project.
Photos courtesy of Terramin