ZAMBIA

A world of opportunities
Steeped in minerals Economic growth New mineral policy Favourable mineral surcharges Impressive array of processing facilities

SPECIAL PUBLICATION

ZAMBIA

Governmental contacts
Zambia Investment Centre 6457 Los Angeles Boulevard PO Box 34580, Lusaka, Zambia Tel: +260 1 254 214 Fax: +260 1 252 150 E-mail: invest@zamnet.zm Ministry of Mines and Minerals Development PO Box 31969, Lusaka, Zambia Tel: +260 1 235 323/6 Fax: +260 1 235 346 Geological Survey Department PO Box 50135, Lusaka, Zambia Tel/Fax: +260 1 250 056/250 174/252 802/251 557 E-mail: gsd@zamnet.zm Mines Development Department PO Box 31969, Lusaka, Zambia Tel: +260 1 237 306 Fax: +260 1 237 307 Mining Sector Diversi cation Programme 14th Floor, New Government Complex Kamwala, Lusaka, Zambia PO Box 51385, Lusaka, Zambia Tel: +260 1 237 423/237 424/237 425 Fax: +260 1 235 353 E-mail: Chris.Sealy@msdp.org.zm
2 Mining Journal special publication

CONTENTS
Zambia overview African Eagle Resources plc Albidon Ltd First Quantum Minerals Ltd Luiri Gold Ltd Mayfair Mining & Minerals Inc Zambezi Resources Ltd Zambezi Nickel Ltd
Published by: Mining Communications Ltd Albert House, 1 Singer Street London EC2A 4BQ Tel: +44 (0)20 7216 6060 Fax: +44 (0)20 7216 6050 E-mail: editorial@mining-journal.com Website: www.mining-journal.com

3 6 7 8 9 9 10 11

Design and production: Bree Freeman Printed by Stephens & George, Merthyr Tyd l, UK Mining Communications Ltd 2006

ZAMBIA

Zambia on the road to recovery

AMBIA, with a population of only 10 million people, is a vivacious country situated near the centre of the African continent and forms a natural hub for the continents diverse activities, having borders with Angola, Democratic Republic of Congo (DRC), Tanzania, Malawi, Mozambique, Zimbabwe, Botswana and Namibia. The total area of the country is 752,614 km2 and boasts an abundance of mineral resources. In the late Proterozoic Lu lian terrain, located in north-western Zambia, the country lays claim to one of the worlds most important and complex metallotects, hosting enormous reserves of copper-cobalt ore, together with gold, uranium, nickel, lead-zinc, iron and manganese; and gem-quality emerald.

Zambia, like many developing countries, is faced with many challenges: high poverty levels; relative low rates of economic growth and the need to grow and diversify its economy. For the past few decades, the countrys economy has been stagnant but things seem to be on the turn. According to International Monetary Fund (IMF) reports earlier this year, the country has grown robustly on the back of signi cant progress in privatisation and budgetary reform. Zambia is aiming for the 6-7% economic annual growth needed to reduce poverty signi cantly and the economy is expected to increase 6% this year from 5.1% in 2005. The countrys Finance Minister Ngandu Magande was quoted as saying that debt relief to Zambia by global lenders has helped to expand spending on infrastructure. He said its scal policy has won the hearts of donors and will enable the country to receive millions of dollars in development grants after the bulk of its foreign debt is cancelled. Prospects are looking very good for our economy. Our aim is to lower in ation to a single digit and stabilise the exchange rate, he said. Copper has been, and still is, the single largest contributor to the Zambian economy. Depressed copper prices on the international markets, plus the under-capitalisation of the countrys copper mines, had resulted in severe constraints on the countrys economy. However, with the privatisation of many state-owned companies and particularly the copper mining industry since

ECONOMY

2000, formerly managed under the umbrella of Zambia Consolidated Copper Mines Ltd (ZCCM), has greatly improved the chances for copper mining to return to pro tability and spur economic growth. Copper output has increased steadily since 2004, due to higher copper prices and the opening of new, often re-capitalised, mines. Production is expected to expand from 467,000 t in 2005 to 600,000 t in 2006. According to the treasury head of CitiBank Zambia, Ignatius Chicha: Copper mining will do very well after the recapitalisation in most mines last year. The Zambian Government has adopted a pragmatic mineral policy that will ensure the development of a self-sustaining mineral-based industry, by steering away from overall dependence on the copper mining industry and moving towards exports with a high value-added content. The policy is aimed at encouraging and diversifying private investment in exploration and development of new large-, medium- and smallscale mines to exploit metallic, gemstones, energy and industrial minerals. The Zambia Investment Centre (ZIC) was set up under the Investment Act of 1993, to facilitate, provide and regulate domestic and foreign investment. ZIC was speci cally set up to assist investors and to serve as a one-stop facility to co-ordinate the steps necessary to make an investment. Surcharges on mineral production compare very favourably with most countries in terms of royalties and taxes, and a number of nancial incentives have been created speci cally to encourage investment in the mining industry. A royalty is payable calculated at 0.6%, reduced from 2% in 2002, of the market value of minerals free-on-board (fob), less the cost of smelting, re ning and insurance, handling and transport from the mining area to the point of export or delivery within Zambia. Royalty payments may be deferred if the cash operating margin of a holder of a Large Scale Mining Licence falls below zero. However, given elevated commodity prices in early 2006, the Zambian Government is reportedly renegotiating mining royalties with major mining companies, to increase the tax on all contracts stipulating a royalty on level of sales. Corporate tax is set at 35%. Exporters of copper and cobalt are levied 35% of taxable income whereas other

mineral and non-traditional commodities (ie excluding copper and cobalt) attract a levy of 15%. Companies listed on the Lusaka Stock Exchange are levied at 30% of taxable income.

Geologically, Zambia contains elements characteristic of ancient mobile belts as well as aspects of ancient cratons. Beneath the weathered mantle of soil, sand and semi-consolidated material, lie rocks that date from Precambrian to recent ages. These igneous, sedimentary and metamorphic rocks are the foundation of Zambia both geologically and economically. The country is well endowed with mineral resources and the economy derives most of its foreign exchange earnings from export of its minerals over 64% of value of exports in 2005. Though a wide range of minerals occurs in the country, the mining industry has been dominated by copper and other metals such as lead, zinc, silver, gold and cobalt. The dominant position of copper mining in the economy has largely overshadowed the exploitation of other potential mineral resources, particularly in the elds of gemstone and industrial minerals. Copper: The copper industry, ranged along the Copperbelt, has dominated the mining scene in Zambia for the past 50 years and despite other mineral nds, is likely to continue to play a major role over the next 50 years. Since the turn of the 20th Century, the Copperbelt has produced 27 Mt Cu; in its heyday, it produced up to 750,000 t/y, but following a major decline in the 1990s, is currently producing just under 470,000 t/y. Most of the mining assets of the government-controlled ZCCM had been divested by 2000, while some operations were reo ered for new privatisation bids. ZCCM subsequently was reorganised as ZCCM Investment Holdings plc (ZCCM-IH), which retained a minority interest in the privatised mines. Since then, a number of mines have been recapitalised and successfully opened over the past ve years, linked to rising international copper demand and prices. This has signi cantly increased Zambias copper and cobalt output and most recent production gures. The total copper resources for the key mining areas are approximately 1,200 Mt which, with an average grade of 2.5% Cu, gives a total of 30 Mt of contained
Mining Journal special publication 3

MINERAL POTENTIAL

ZAMBIA

copper. At current rates of production, and discounting likely new discoveries, this will guarantee a minimum of 60 years of production. Copper production outside the Copperbelt, mostly within the Katangan succession, has come mainly from Kansanshi, Mkushi, Mtuga, Hippo, Chanobie and Allies mines. Historical production from these mines amounted to approximately 30,000 t, compared with the 27 Mt produced by the big mines in the Copperbelt by the turn of the century. Kansanshi is one of the most attractive of the known producing deposits outside the Copperbelt. Iron ore: Zambia imports all its steel and there is no local production of iron. However, the country has substantial resources of iron ores in excess of 500 Mt and these can be broadly classi ed into a sedimentary type and a pyro-metasomatic type based on chemical composition and geology. Manganese: Manganese was mined at Mansa in the Luapula Province for use in the manufacture of battery cells. The Bahati and Mashimba mines at Mansa produced around 5,000 t annually, more than required for the plant reserves exceed 50,000 t. Numerous small deposits are known to occur throughout the country and the estimated reserves are around 2 Mt of mediumto high-grade ore (45 to 60%). The mineralisation would appear to be con ned to shear zones in acidic rocks. The orebodies vary greatly in thickness and length, often displaying pinch and swell structures. Tin and tantalum: Tin, together with tantalum, has been mined on an irregular basis by small-scale workers from the Tin Belt of southern Zambia, east of Choma. Tin occurs as cassiterite in pegmatites and in placers. Stanniferous quartz-muscovite-feldspar-tourmaline pegmatites intruding schistose metasediments occur over a strike length of 100 km centred on Masuku Mission and approximately 150 separate occurrences have been recorded. The average annual production was around 10 t of tin-tantalum concentrate and was sold as such to local processors. Other recorded tin areas include: Mpemba Tin, west of Serenje; Swishi Tin on the Lalafuta River; Mutumbwe Tin, west of Mumbwa; and tantalum, east of Choma. Phosphate: Apatite, the most important potential source of phosphate, occurs in signi cant concentrations in syenitic intrusions and carbonatite bodies. Signi cant syenite-hosted deposits include the apatite-quartz bodies of Chilembwe, near Petauke in eastern Zambia, and breccia and pegmatite bodies in syenite intrusions near the north-eastern margin of the Hook Granite Complex. Carbonatites in Zambia are mostly related to Karoo-age rifts and very substantial low-grade apatite deposits have been noted in these Kaluwe in the Rufunsa-Feira area and Nkombwa Hill at the northern end of the Luangwa Rift. Coal: Zambia possesses substantial coal resources and has been producing coal continuously since 1967. The bulk comes from the Maamba coal mine, an open-cast operation in the southern part of the country near Lake Kariba. Maamba has a proven reserve of 20 Mt, and the coal is sub-bituminous durain-fusain with high ash content. Thin coal seams and carbonaceous shales have also been identi ed in the Gwembe Formation of the Luangwa and Luano-Lukusashi Valleys and in the eastern part of the Barotse Basin in western Zambia.

Mining operations in Zambia are regulated by the Mines and Minerals Act (No 31), 1995. However, it is
4 Mining Journal special publication

EXPLORATION & DEVELOPMENT

currently being revised, and the issue of licences has been suspended from August 2005 through to August 2006, to allow full conversion of the old licence registration system to a new digital cadastre. In line with the governments stated Mining Policy, the 1995 Act greatly simpli ed licensing procedures, placing minimum reasonable constraints on prospecting and mining activities and creating a very favourable investment environment, while allowing for international arbitration to be written into development agreements, should this be deemed necessary. The government encourages private development and diversi cation of the mining sector and promotes small-scale mining. The Environmental Protection and Pollution Control Act (No 12) of 1990, the Mines and Minerals (Environmental) Regulations of 1997 and the Environmental Protection and Pollution Control (Environmental Impact Assessment) Regulations, 1997, provide a framework for responsible development of mines. There has been a hugely active mining/exploration scene since the privatisation process was completed in 2001. Most exploration and mining focus is on the Copper Belt (Katangan) and the pre-Katangan Cu-Au-(U) potential (Proterozoic) in the northwest. Copper deposits on which the major mines are based occur in Precambrian metasediments of the Mine Series Group (Lower Roan) of the Katanga Supergroup. Mineralised beds range up to 20 m in thickness, often in two sedimentary horizons separated by several metres of waste. The beds have been uplifted and folded with dips ranging from gentle to overturned, and mineralised strike lengths are generally long, up to 25 km in places. The primary ore minerals are chalcopyrite, bornite and carrollite which are often associated with pyrite. Secondary sulphides, namely bornite and chalcocite, are important below the zone of oxidation but tend to decrease down-dip. Cherty horizons are generally richest in copper and often contain uranium mineralisation. Carrollite, the cobalt-bearing sulphide, is most commonly concentrated in the upper units of the ore horizon. There is currently some recognition being given to structurally-controlled copper, which may have been left behind by previous stratigraphic mining, with huge potential if the model proves to be correct. First Quantum Minerals Ltd is actively exploring and mining across the Copperbelt and into the DRC. It owns the Bwana Mkubwa metallurgical facility and 80% of the Kanshansi open-pit copper-gold mine. It also holds strategic investments in the Nkana and Mufulira copper-cobalt operations. Anvil Mining is also active in mineral exploration on the Copperbelt, with licences along the border with the DRC. In 2004, the Lumwana Joint Venture, comprising Australias Equinox Resources Ltd (51% equity interest) and US-based Phelps Dodge Corp (49%), was awarded a 25-year Large Scale Mining Licence for cobalt, copper, gold and silver. The joint venture continued exploration of the Lumwana copper project, which is located 220 km northwest of the main Zambian Copperbelt in northwestern Zambia. Equinox has since acquired 100% ownership of the project. Lumwana is one of the worlds

largest undeveloped copper deposits and is scheduled for commissioning in late 2007. Reserves are estimated at 270 Mt of ore grading at 0.8% copper. There is also the potential for uranium production with estimated resources of 350 Moz of U308. Following the blind discovery of the Chimiwungo North deposit in 2004, Equinox restarted exploration activities elsewhere in Zambia on the restructured Zambezi project tenements, which cover over 18,000 km2 of highly prospective terrain. Other exploration in Zambia included the recovery and testing of a mini-bulk sample by Caledonia Mining Corp of Canada on its Nama cobalt-copper project. Caledonia proposed building a pilot plant in 2005 to produce a cobalt concentrate for smelter testing. The UKs African Eagle Resources plc has a modest but capable exploration infrastructure in Zambia. It has drilled the Eagle Eye and the Mwezi iron oxide-coppergold prospects of its Sasare licence, which is located near the Mozambique border in eastern Zambia. Zambezi Resources Ltd, an Australian-managed company, continues prospecting and sampling of its copper, gold and nickel projects. It is actively exploring in the Mulofwe Dome area 80 km east of Lusaka for copper-gold deposits and it has additional projects elsewhere, including Cheowa Neningombe, where it will undertake diamond drilling in 2006 for copper sulphides, and at the Chakwenga property, 150 km east of Lusaka, for copper-gold. Prior to its acquisition by the group in July 2002, Katanga Resources Ltd acquired a portfolio of prospecting licences along the Mwembeshi Dislocation, a 700 km-long major shear zone with many recorded occurrences of gold, copper, zinc and

ZAMBIA

other metals. The Mkushi licence, containing a copper mine operated in the 1970s, lies on the parallel Kapiri Mposhi Dislocation. The Lunga licence lies south of the Copperbelt and contains extensive stratabound base metal mineralisation. Billiton Development Ltd of Zambia (a subsidiary of BHP Billiton Ltd) completed a geophysical survey on the Mumbwa copper-gold prospect for its joint venture with AIM Resources Ltd of Australia. Apart from the currently producing mines of the Copperbelt, geological data on another 30 deposits, some of which were previous producers, are available. The important regions include the Lusaka area with 10 Mt at 1.5% Cu (Chongwe, Argosy, Allies, Hereford etc), Kabwe area with 12 Mt at 1.5% Cu (Sebambere, Mufukushi etc), Mumbwa area with 5 Mt at 1.5% Cu (Hippo, Big Concession, Chanobite etc), Mkushi area with 8 Mt at 1.5% Cu, and Lumwana with over 1,000 Mt at 1% Cu. Cobalt occurrences outside the Copperbelt include those around Kimale near Solwezi and at Mwinilunga. Gold in Zambia is essentially con ned to granites, gneisses and felsites of Proterozoic age. More recently, some gold mineralisation has been attributed to conglomerates in the north, lying above the Banguela Block near Mbala. Only small quantities of gold have been mined, but gold exploration may well increase with the higher prices. Nearly 70.5 Moz of gold has been produced from 20 deposits since 1906, but does not include gold produced as a by-product of copper recovery by ZCCM. Whereas there are over 300 known gold occurrences, small quantities of gold have been won from only the

mines of Luiri (Matala and Dunrobin) with an estimated reserve of 100,000 t at 3.5 gm/t Au; Jessie, Chakwenga (50,000 t); Chumbwe (35,000 t); Sassare (35,000t); Lutembwe, Cymric, Velocity, Chad, Chetina, Tortoise and Iron Cap (65,000 t). Some of the limestone horizons in the Lusaka-Kabwe belt would appear to carry su cient appreciable quantities of silver to warrant serious investor appraisal. The Mporokoso basin in the north of the country is analogous to the Witwaterstrand basin with conglomerates similar to the Rand blanket. Zambias recent lead and zinc production has come from the Kabwe mine operated by ZCCM. The ore grade of this old mine, over 80 years in production, was 23% Zn and 10% Pb. The mine was closed in 1994. However, the level of resource in the Kabwe mine area is estimated at 50 Mt with 3.8% Zn and 1.8% Pb. The Kabwe lead-zinc ores occur within a basin-like north-westerly trending belt of dolomitic rocks of upper Precambrian age correlated with the Upper Roan Group of the Copperbelt. As with copper, there are a number of other known deposits. The important deposits are at Chipirinyuma near Nyimba with 2 Mt at 4% Zn, and the Lusaka-Mumbwa-Kabwe triangle (Carmarnor with 1.5 Mt at 14% Zn and 1% Pb, Bob Zinc 300,000 t with 150 g/t Ag and 12% Zn, Star Zinc with 300,000 t at 20% Zn, Chiwenda with 150,000 t lead-zinc and Karenda). The large areas of Zambia underlain by carbonate rocks of probable Katangan age have been under-explored for Mississippi Valley-type lead-zinc mineralisation. Although nickel is not mined in Zambia, a small but signi cant sulphide deposit occurs in a gabbro sill near the contact with carbonate rocks at Munali some 70 km south-south-west of Lusaka. Sulphides, in either massive or disseminated form, are present as steeplydipping lenses and shoots in the highly-altered contact zone between the sediments and igneous rocks. A reserve estimate of 10 Mt grading 1.1% Ni, 0.2% Cu-Co and 1.5 g/t precious metals (gold, silver and platinoids) has been established. Other known nickel occurrences include those to the east of Lusaka, Kalumbila to the west of Solwezi where it is associated with copper and cobalt, Kimale at Solwezi and possibly at Bu alo, although the latter probably is a copper-gold play rather than nickel. Anglo American and a Canadian consortium have taken up licences for nickel. Albidon Ltd completed an airborne geophysical survey of the adjacent Kabeswa and Munali licences. The Munali project area (100% Albidon) is located approximately 60 km south of Lusaka. It includes the Enterprise deposit and a number of other nickel prospects around the Munali intrusion, the most advanced of which is the Voyager prospect along strike from Enterprise. A revised resource estimate has been prepared for the Enterprise deposit based on drilling completed during the period December 2005 to April 2006, which outlined indicated and inferred resources of 8 Mt at 1.4% Ni and 0.9 g/t of platinum group metals.

Three important types of uranium occurrence have been recorded in Zambia: in Karoo sandstones, associated with the copper mineralisation of the Copperbelt, and structurally-controlled mineralisation in the basement domes of north-western Zambia, respectively. The Karoo occurrences comprise presumed detrital concentrations, up to 1,000 ppm U, in the Escarpment Grit Formation, and fracture-controlled autunitetorbernite-pitchblende in the same arenitic units of the Mid-Zambezi Rift. Uranium occurrences associated with the Copperbelt mineralisation variably consist of pitchblende, co nite and brannerite, or meta-torbernite and other secondary minerals, concentrated near the base of the copper mineralisation or within the footwall rocks immediately underlying the ore bodies. Zambezi Resources recently completed the rst phase of its trenching and geochemical sampling programme on the Oryx uranium project. Assay results were expected in mid 2006. Geological interpretation con rms the validity of a hydrothermal intrusive style model. Spectrometer results to date show peak uranium counts of up to 80-100 times background over target areas. Alluvial diamonds have been reported throughout much of northern, north-eastern and western Zambia, and in many places are accompanied by indicator minerals. Kimberlite and lamprophyre intrusions occur within and near to the western ank of the Luangwa River and also in southern Zambia, but no diamondbearing diatremes have yet been discovered. Recent magneto-telluric studies suggest that diamondiferous kimberlites may occur in transition zones (100-300 km-thick) between thickened craton and very thin craton, which has opened up the prospectivity of western and northwestern Zambia for diamond exploration. During 2004, the joint venture of Motapa Diamonds Inc (60%; an a liate of BHP-Billiton World Exploration Inc) and Caledonia Mining (40%) completed a 5,000 kmline airborne gravity and magnetic survey over the Mulonga Plain diamond licence in northwestern Zambia near the Angolan border. The joint venture also completed sampling programmes on the Kashiji plain and the Lukulu diamond licences. Spirit of the River, a Canadian company, has extensive licence holdings west of Mongu along the Angolan border. It is actively exploring for alluvial diamonds with some positive results. Billiton Development is also exploring for diamonds in the west of Zambia. As a major base-metal mining country of over 80 years standing, Zambia has over the years developed an extensive and impressive array of processing facilities. The copper ores particularly are not only mined and bene ciated, but smelted and re ned into metals prior to export. In addition, the precious metals plant at Ndola on the Copperbelt recovers bullion and other metals from the re nery slimes. Cobalt is recovered through a leaching process. With the Zambian Government claiming a rise in interest from overseas investors, the reporting of positive macroeconomic signs, which are rooted in the reforms implemented in the rst half of the 1990s, and the kwacha currently seeing a surge, the future looks bright for this once troubled sub-saharan country. By Bree Freeman, freelance journalist Special thanks goes to MINES 2006 for supplying information for this article: www.mines2006.com; e-mail: mines2006@metraconsult.co.uk, tel: +44 (0)1883 349 690
Mining Journal special publication 5

ZAMBIA

First Quantum a major player

Using its expertise in the discovery of copper deposits, First Quantum is a prominent force in the region
FIRST Quantum Minerals Ltd is a growing mining and metals company whose principal activities include mineral exploration, development and mining in Africa. The company produces LME grade A copper cathode, copper in concentrate, gold and sulphuric acid. It says its primary focus is on its core expertise of developing and operating copper mines as well as the discovery of new copper deposits throughout the world, in particular in the Copperbelt region of Zambia and the Democratic Republic of Congo (DRC). The companys operations include the 80%-owned Kansanshi copper-gold mine in Zambia, the 100%-owned Bwana/Lonshi cross-border copper operation in Zambia and the DRC. In addition, the company is developing the Frontier copper deposit in the DRC and controls approximately 18,000 km2 of exploration concessions within the Zambia-DRC copperbelt. The company also holds a strategic investment of 16.9% in Mopani Copper Mines plc, which operates the Nkana underground copper mine and cobalt re nery and the Mufulira underground copper mine, smelter and copper re nery in Zambia. In Mauritania, First Quantum is also developing the 80%-owned Guelb Moghrein copper-gold deposit. For 2006, First Quantum expects to produce about 200,000 t of copper (a 68% increase over 2005 copper production) which includes 140,000 to 145,000 t from Kansanshi, 45,000 to 50,000 t from Bwana/Lonshi and 15,000 t from Guelb Moghrein. In addition, the company expects to produce 75,000 oz of gold, which includes 40,000 oz from Kansanshi and 35,000 oz from Guelb Moghrein. struction of the HPL facility is expected to be completed in the September quarter of 2006 with commissioning taking place over the remainder of the year. Additional bene ts of the HPL facility include the production of acid, which assists the leaching oxide ore, and the production of ferric sulphate, which improves the leach recoveries of transition ores that contain a mix of oxide and sulphide minerals. CONTACT Clive Newall, President 1st Floor, Mill House, Mill Bay Lane, Horsham, West Sussex, RH121SS, UK Tel: +44 (0)1403 273 484 Fax: +44 (0)1403 273 494 E-mail: clive.newall@fqml.com

The 100%-owned Bwana Mkubwa SX/EW facility is located near the regional mining centre of Ndola at the southern extension of the Zambian Copperbelt. Built in 1998 at a cost of US$30 million and expanded in 2002 for an additional US$25 million, Bwana Mkubwa is a proven low-cost copper producer and a showcase operation for First Quantum in Zambia. Since inception, the Bwana Mkubwa operation has consisted of the processing of copper-bearing ore to recover metal as copper cathode and the manufacturing of sulphuric acid. In 2002, the existing 10,000 t/y Bwana Mkubwa facilities were modi ed and expanded to process high-grade copper ore from the Lonshi copper deposit located in the DRC. Construction included the installation of crushing, milling, pre-leach ltration, leach tanks and post-leach ltration. Solvent extraction and electrowinning facilities were expanded to a capacity of 45,000 t/y of copper cathode.

BWANA PROCESSING CENTRE/ LONSHI COPPER MINE

deposit hosts a measured and indicated resource of 161 Mt grading 1.17% copper with a further inferred resource of 35 Mt grading 1.05%. A scoping study envisages an average annual production of 80,000 t of copper-in-concentrate. The concentrate will be treated at Mopanis Mufulira smelter in Zambia. In January 2006, the Frontier Environmental Impact Assessment and Environmental Management Plan were formally approved by the Congolese Ministry of Mines and the Exploitation Permit was granted in February 2006. Construction was due to begin in the second quarter of 2006 with commercial production forecast for the second half of 2007.

The companys Kansanshi project is located in the north-western province of Zambia, approximately 15 km north of the town of Solwezi and 16 km south of the DRC border. In April 2005, Kansanshi began commercial production, and the plant expansion to double sulphide ore capacity to 8 Mt/y commenced within a few months of the initial project commissioning. This upgrade is now also commissioned and the mine is already operating more or less to design output of 12,300 t/mth of copper, which includes 6,000 t of copper cathode and 6,300 t of copper-in-concentrate. With the growing concentrate production from Kansanshi and the future concentrate production from First Quantums Frontier deposit (see opposite), the smelting capacity in the Copperbelt will be constrained. Partly to reduce its reliance upon Copperbelt smelter capacity, First Quantums investing US$89 million in a high-pressure leach (HPL) facility to treat a portion of the increased copper concentrate. Initially, the HPL facility will treat approximately 105,000 t of copper concentrate to produce 35,000 t of copper cathode. Con8 Mining Journal special publication

KANSANSHI

Frontier is located near the town of Sakania in the DRC, within 2 km of the Zambian border, and the paved highway that parallels it, roughly equal distant between the city of Ndola (35 km) to the southeast and the Mopani copper mines smelter at Mufulira (30 km) to the northwest. The main railway from the Copperbelt in Zambia to Lubumbashi in the DRC passes within 5 km of the property. Frontier is a new discovery made by First Quantum, a product of the companys generative exploration programme initiated after the successful discovery and development of the Lonshi copper mine. The Frontier

FRONTIER

On May 1, 2006, First Quantum announced that it had successfully acquired control of Adastra Minerals Inc. Adastras principal asset is the Kolwezi tailings project in the DRC. Kowezi hosts a measured and indicated oxide tailings resource of 113 Mt grading 1.49% copper and 0.32 % cobalt. First Quantum intends to re-engineer the project in 2006 with the aim of beginning construction in 2007 with commercial production in 2008.

KOLWEZI

A wide-ranging grassroots exploration programme for new major copper deposits is underway on wholly-owned properties in Zambia and the DRC. First Quantum has prospecting licences covering approximately 18,000 km2 within the Copperbelt, with drill programmes ongoing on several prospective targets. In March 2006, the company announced a new discovery on the wholly-owned Kibamba exploration permit, located approximately 75 km west of the town of Likasi, within the DRC portion of the central African Copperbelt. The company completed airborne magnetics and radiometrics surveys in 2004, and carried out soil geochemistry during the same period, and into 2005, over the entire exploration permit. Four trenches were excavated at the Subo prospect in 2004, and 2005 drill highlights from the prospect included 80 m grading 2.20% copper and 0.25% cobalt, 75 m grading 1.12% copper and 0.03% cobalt and 82 m grading 1.88% copper and 0.12% cobalt. A follow-up drill campaign is planned for 2006.

EXPLORATION