- Coda Minerals has efficiently utilised a chloride leaching to extend copper restoration charges to 95% in comparison with the earlier 80% flotation-based course of.
- The brand new flowsheet delivers a post-tax NPV of AUD $855 million (versus AUD $802 million beforehand), with a 30% IRR at base case pricing, rising to AUD $1.2 billion NPV and 38% IRR at spot pricing.
- Complete capital expenditure has decreased by AUD $74 million because of easier processing necessities, eliminating the necessity for advanced flotation circuits and oxygen crops.
- The undertaking is now economically viable based mostly solely on copper and silver manufacturing, eradicating dependency on risky cobalt markets whereas sustaining the potential to reintegrate cobalt as further upside.
- Administration has outlined a path to prefeasibility research (PFS) completion with recognized catalysts together with mine reoptimization, potential staging alternatives, and potential cobalt reintegration value an estimated AUD $1.5 billion.
Coda Minerals Restricted (ASX: COD) has achieved a major technical breakthrough that basically transforms the economics of its Elizabeth Creek copper-silver undertaking in South Australia. The corporate’s profitable growth of chloride leaching expertise represents a departure from standard flotation processing, delivering enhanced recoveries and simplified operations that place the undertaking as a aggressive mid-tier copper producer.
Technical Effectivity: From Flotation to Leaching
The corporate has transitioned from an 80% copper restoration flotation-based course of to a 95% restoration chloride leaching system, marking what CEO Chris Stevens describes as a basic change.The earlier flowsheet required crushing and grinding to 53 microns, adopted by a fancy three-stage flotation course of and subsequent regrinding in an ISA mill earlier than continuing to an oxygen-assisted albion leaching course of.
“We have cracked it. We put out an announcement in June… We have had an enormous improve in recoveries,” Stevens defined throughout the interview. The brand new course of operates at a coarser grind dimension, considerably lowering energy necessities and eliminating the necessity for a number of flotation levels and oxygen crops.
The simplified flowsheet includes direct tank leaching with a four-hour residence time, processing roughly 400 tons per hour by means of polyethylene tanks. This strategy removes roughly AUD $175 million in capital expenditure related to the earlier flotation and albion processing infrastructure.
Enhanced Mission Economics
The up to date scoping research delivers compelling monetary metrics with a post-tax internet current worth of AUD $855 million in comparison with the earlier AUD $802 million, representing a fabric enchancment regardless of conservative commodity pricing assumptions. At present spot costs, the NPV will increase to roughly AUD $1.2 billion with a 38% inside price of return. Stevens emphasised the conservative nature of their pricing assumptions:
“We’re speaking $4.28 copper, $30 an oz. silver, keep in mind spot’s $38 proper now.”
The research maintains the identical low cost charges and overseas change assumptions as earlier evaluation, guaranteeing direct comparability.
The undertaking demonstrates substantial scale with deliberate steady-state manufacturing of over 30,000 tons of copper yearly and roughly 20 million ounces of silver over the mine life.
Capital Effectivity & Operational Simplification
The brand new processing paradigm has lowered whole capital expenditure by AUD $74 million, addressing one of many key challenges going through junior mining corporations within the present capital surroundings. The elimination of advanced flotation circuits, oxygen crops, and specialised grinding gear has streamlined the capital necessities whereas sustaining processing capability. Stevens defined the operational advantages:
“You are no longer doing the second and third stage grinds, particularly with the ISA mill, and you do not have the O2 plant. So internet internet, it is a bit decrease, and that is mirrored within the $8 a ton opex discount.”
The corporate has utilized a ten% contingency to capital prices, in keeping with {industry} friends, and has supplied complete capital breakdowns to make sure transparency. This consideration to element displays administration’s give attention to avoiding the capital overruns which have plagued many growth tasks.
Interview with Chris Stevens, CEO of Coda Minerals
De-risked Commodity Portfolio
Maybe probably the most important strategic enchancment is the undertaking’s transformation from a cobalt-dependent operation to 1 that achieves sturdy economics based mostly solely on copper and silver manufacturing. This transformation eliminates publicity to the risky and fewer liquid cobalt market whereas sustaining the potential for important upside.
“We now not want cobalt for this undertaking to be effectively financial and peer comparable. Copper and silver are way more bankable commodities with deep liquid markets.”
The elimination of cobalt dependency addresses a key investor concern whereas preserving optionality for future worth creation.
The corporate eliminated AUD $1.5 billion in cobalt income from their base case mannequin, demonstrating the undertaking’s power with out counting on this traditionally risky commodity. Nonetheless, cobalt stays a possible catalyst, with Stevens noting:
“We consider we’ll get the cobalt again in, nevertheless it’s higher again in as cream somewhat than as a base case requirement.”
Scale-Up Concerns
Administration has recognized three essential areas requiring consideration throughout prefeasibility research growth: variability testing, geotechnical optimization, and water useful resource affirmation. Stevens acknowledged these challenges whereas expressing confidence within the firm’s capacity to deal with them systematically.
“We have used fairly consultant composites taken from fairly huge areas of what’s a laterally intensive orebody. Geochemically we see very restricted variability between the totally different deposits.”
The chloride leaching expertise advantages from established industrial functions throughout a number of sectors, lowering scale-up threat. Stevens cited examples of comparable applied sciences working in Chile and Australia, offering precedent for business implementation.
The corporate is evaluating a number of growth eventualities, together with a possible stage-one operation targeted on open-pit deposits that would present earlier money movement and lowered preliminary capital necessities. With three recognized open-pit deposits containing roughly 250,000 tons of copper equal, this strategy may supply a lower-risk entry level to manufacturing. Stevens outlined the strategic rationale:
“Can you may have a stage one that’s financial by itself? Does it have its personal payback? Is it a standalone undertaking with optionality to broaden that massively reduces your upfront capex?”
The corporate’s location in South Australia, adjoining to BHP’s Carrapateena undertaking, offers entry to established infrastructure and mining experience. The regulatory surroundings and proximity to current operations improve the undertaking’s growth prospects.
Catalyst Pipeline and Worth Creation Alternatives
Administration has recognized a number of near-term catalysts that would drive additional worth creation. Mine reoptimization represents a major alternative, as the present mine plan was developed beneath the earlier processing paradigm and should not optimize tonnage and grade choice for the brand new flowsheet.
Useful resource enlargement by means of continued exploration of the laterally intensive orebody presents further upside, notably given the improved economics of the brand new processing route. The corporate’s systematic strategy to feasibility growth, together with complete variability testing and geotechnical research, ought to present the muse for reserve estimation and closing funding choices. Stevens emphasised the significance of this systematic strategy:
The Funding Thesis for Coda Minerals
- Technical differentiation by means of confirmed innovation: Profitable growth and laboratory validation of chloride leaching expertise delivering 95% copper restoration versus industry-standard 80% flotation restoration, offering aggressive benefit and enhanced undertaking economics.
- Compelling monetary metrics at conservative pricing: Publish-tax NPV of AUD $855 million with 30% IRR utilizing below-market commodity assumptions, scaling to AUD $1.2 billion NPV at present spot costs, demonstrating sturdy economics throughout pricing cycles.
- Lowered capital depth and execution threat: AUD $74 million discount in whole capex by means of simplified processing flowsheet, eliminating advanced flotation circuits and oxygen crops whereas using confirmed tank leaching expertise with established industrial precedent.
- De-risked commodity publicity with important optionality: Mission economics based mostly on liquid, bankable copper and silver markets somewhat than risky cobalt dependency, whereas retaining AUD $1.5 billion in potential cobalt upside for future worth creation.
- Clear worth creation pathway: Systematic development towards prefeasibility research with recognized catalysts together with mine reoptimization, potential staging alternatives, useful resource enlargement, and cobalt reintegration offering a number of worth inflection factors.
- High quality asset in established jurisdiction: Over a million tons contained copper equal in South Australia’s confirmed mining area, adjoining to BHP’s Carrapateena operation, offering infrastructure entry and regulatory certainty.
- Skilled administration with feasibility experience: Management staff with demonstrated mineral economics and feasibility research expertise, emphasizing systematic threat administration and real looking undertaking growth timelines.
The shift from cobalt dependency to copper-silver focus aligns with investor preferences for publicity to established, liquid commodity markets somewhat than nascent battery steel segments topic to provide chain disruption and demand volatility. The corporate’s location in South Australia positions it inside a secure jurisdiction with established mining infrastructure, contrasting favorably with many copper tasks in geopolitically difficult areas.
The technical achievement of 95% copper restoration addresses a basic {industry} problem, as Stevens famous: “Mathematically, financially, there’s an terrible lot of cash left within the tailings dump in case you’re recovering 80%.” This innovation represents the kind of technological development obligatory to satisfy rising copper demand from current and marginal sources.
