EX-96.1 5 tm2232668d4_ex96-1.htm EXHIBIT 96.1

 

Exhibit 96.1

 

  Minerals Industry Consultants

Level 9, 80 Mount Street
North Sydney, NSW 2060

 Australia

 

Tel: 612 9954 4988

 Fax: 612 9929 2549

 Email: bdaus@bigpond.com

     

 

TECHNICAL REPORT SUMMARY

 

CSA COPPER MINE – NEW SOUTH WALES – AUSTRALIA

 

S-K 1300 REPORT PREPARED FOR
METALS ACQUISITION CORPORATION

 

BEHRE DOLBEAR AUSTRALIA PTY LIMITED
21 FEBRUARY 2023

 

             
Denver New York Toronto London Guadalajara Santiago Sydney

 

 

SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC
Behre Dolbear Australia Pty Ltd
February 2023
Page 2

 

DATE AND SIGNATURE PAGE

 

This Technical Report Summary was prepared by Behre Dolbear Australia Pty Limited for Metals Acquisition Corporation (“MAC”). Mr. Mike Job of Cube Consulting Pty Limited, West Perth, acted as Qualified Person (“QP”) for the Mineral Resource estimate and Mr. Jan Coetzee of MAC acted as Qualified Person for the Mineral Reserve estimate.

 

The contributes of each group to this Technical Report Summary is shown in the table below.

 

Consulting Group  Author  Sections  Signature
   Mark Faul  1, 2, 3, 4, 5, 13, 16, 18, 19, 20, 21, 22, 23, 24, 25  Signed
   George Brech  6  Signed
Behre Dolbear Australia  Rolly Nice  10, 14  Signed
   Richard Frew  15  Signed
   Adrian Brett  17  Signed
Cube Consulting  Mike Job  7, 8, 9 and 11  Signed
Metals Acquisition Corp.  Jan Coetzee  12  Signed

 

BEHRE DOLBEAR

 

 

SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC
Behre Dolbear Australia Pty Ltd
February 2023
Page 3

 

Table of Contents

 

GLOSSARY OF TERMS AND ABBREVIATIONS 10
1 EXECUTIVE SUMMARY 12
  1.1 Summary 12
  1.2 Property Description, Ownership and Mineral Rights 12
  1.3 Accessibility, Climate, Local Resources, Infrastructure and Physiography 12
  1.4 History 12
  1.5 Geological Setting, Mineralisation and Deposit 15
  1.6 Exploration 15
  1.7 Sample Preparation, Analysis and Security 15
  1.8 Data Verification 15
  1.9 Mineral Processing and Metallurgical Testing 15
  1.10 Mineral Resource Estimates 17
  1.11 Mineral Reserve Estimate 17
  1.12 Mining Methods 18
  1.13 Processing and Recovery Methods 18
  1.14 Infrastructure 18
  1.15 Market Studies 19
  1.16 Environmental Studies, Permitting and Plans, Negotiations or Agreements 20
  1.17 Capital and Operating Costs 20
  1.18 Economic Analysis 20
  1.19 Qualified Person’s Conclusions and Recommendations 21
2 INTRODUCTION 22
  2.1 Registrant 22
  2.2 Lead Author – Behre Dolbear Australia (“BDA”) 22
  2.3 Terms of Reference 22
    2.3.1 Report Purpose 22
    2.3.2 Terms of Reference 22
  2.4 Qualified Persons 22
    2.4.1 Qualified Persons of Behre Dolbear Australia 22
    2.4.2 Qualified Persons of Cube Consulting 24
    2.4.3 Qualified Persons of Metals Acquisition Corp. 24
  2.5 Site Visits and Scope of Personal Inspection 25
  2.6 Information Sources 25
  2.7 Previous Reports on Project 25
3 PROPERTY DESCRIPTION 26
  3.1 Property Location 26
  3.2 Property and Title in Australia 26
  3.3 Mineral Title in New South Wales 26
  3.4 Mineral Titles, Claims, Rights, Leases and Options 28
    3.4.1 Mineral Titles 28
    3.4.2 Land Tenure 28

 

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SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC
Behre Dolbear Australia Pty Ltd
February 2023
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  3.4.3 Native Title 28
  3.4.4 Joint Venture Interests 28
    3.4.4.1 AuriCula Joint Venture 29
    3.4.4.2 Shuttleton Joint Venture (EL6223) 29
    3.4.4.3 Oxley Tenements (Former Joint Venture) 29
  3.4.5 Water Rights 29
  3.4.6 Royalties 30
    3.4.6.1 State Royalty 30
    3.4.6.2 Glencore 1.5% Cu NSR 30
    3.4.6.3 Oxley Tenements (Former Joint Venture) 30
  3.4.7 Encumbrances 30
  3.4.8 Permitting and Development Consents 30
    3.4.8.1 Mine Operations Plan (MOP) 31
    3.4.8.2 Environmental Protection Licence 31
  3.4.9 Violations and Fines 31
  3.5 Significant Factors and Risks That May Affect Access, Title or Right to Perform Work 31
4 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, PHYSIOGRAPHY 32
  4.1 Topography, Elevation and Vegetation 32
  4.2 Accessibility 32
  4.2.1 Roads 32
  4.2.2 Airstrip 32
  4.2.3 Rail 32
  4.3 Climate 32
  4.4 Infrastructure 32
  4.4.1 Power Supply 32
  4.4.2 Water Supply and Water Pipelines 32
  4.4.3 Workforce Accommodation 33
  4.4.4 Site Buildings and Services 33
  4.4.5 Tailings Storage Facility 33
5 HISTORY 35
  5.1 Previous Operations 35
  5.2 Recent Production History 35
  5.3 Historical Exploration 35
6 GEOLOGICAL SETTING, MINERALISATION AND DEPOSIT 37
  6.1 Regional Geology and Mineral Deposits 37
  6.1.1 Stratigraphy 37
  6.2 Local and Property Geology 40
  6.2.1 Mineralization and Alteration 40
7 EXPLORATION 42
  7.1 Summary of Exploration 42
  7.2 Historical and Current Drilling 42
  7.3 Exploration – Non-Drilling 42

 

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SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC
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February 2023
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  7.3.1 Geophysical Surveys 42
    7.3.1.1 2001 Hoistem Survey 42
    7.3.1.2 2005 Mopone IP-Resistivity Survey 44
    7.3.1.3 2006 – 2007 MIMDAS Survey 44
    7.3.1.4 2012 – 2019 Ground Gravity 44
    7.3.1.5 2020 Airborne Magnetics and Radiometrics 45
    7.3.1.6 2021-2022 FLEM 45
  7.3.2 DHEM 45
    7.3.2.1 2018 CSA Mine DHEM Survey 45
    7.3.2.2 2020 QTS South DHEM Survey 45
  7.3.3 Geological Mapping 46
  7.3.4 Geochemistry 46
  7.4 Exploration – Drilling 46
  7.4.1 Surface Drilling 46
    7.4.1.1 Historical Drilling Campaigns 2000 – 2016 49
    7.4.1.2 2017 – 2020 Near-mine Reverse Circulation Drilling 49
    7.4.1.3 2017 – 2020 Diamond Drilling Campaigns 49
    7.4.1.4 2022 – 2023 Diamond Drilling Campaign 49
  7.5 Underground Drilling 50
  7.6 Geotechnical Data 50
  7.7 Hydrological Data 53
  7.8 Qualified Person’s Opinion on Exploration Interpretations 53
8 SAMPLE PREPARATION, ANALYSES, AND SECURITY 54
  8.1 Assay Sample Preparation and Analysis 54
  8.2 Bulk Density Determinations 54
  8.3 Quality Assurance and Quality Control 54
  8.3.1 Standards and Blanks 54
  8.3.2 Field Duplicates 55
  8.3.3 Laboratory QA/QC 55
  8.4 Security and Storage 55
  8.5 Qualified Person’s Opinion on Sample Preparation, Security and Analytical Procedures 55
9 DATA VERIFICATION 56
  9.1 Internal Data Verification 56
  9.2 Review of CMPL’s QA/QC 56
  9.3 Geological and Operation Reconciliation 56
  9.4 Qualified Person’s Opinion on Data Adequacy 56
10 MINERAL PROCESSING AND METALLURGICAL TESTING 57
  10.1 Metallurgical Testwork 57
  10.1.1 Overview of Metallurgical Testing Practices 57
  10.1.2 Data Analysis and Regression Modelling 57
  10.1.3 Planning and Forecasting 59
  10.2 Deleterious Elements 59

 

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SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC
Behre Dolbear Australia Pty Ltd
February 2023
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  10.3 Test Laboratories 59
  10.4 Mine Metallurgical Test Work on Future Orebodies Study – JKTech 2020 59
  10.5 Comminution 60
  10.6 Recovery and Concentrate Estimates 60
  10.7 Qualified Person’s Opinion on Mineral Processing and Metallurgical Testing 61
11 MINERAL RESOURCE ESTIMATE 62
  11.1 Introduction 62
  11.2 Available Data 63
  11.3 Geological Models 63
  11.4 Mineralised Domain Coding 63
  11.5 Composites 65
  11.6 Exploration Data Analysis and Grade Capping/Outlier Restrictions 65
  11.7 Variography 65
  11.8 Block Model Definition 65
  11.9 Estimation/Interpolation Methods 65
  11.9.1 Block size 65
  11.9.2 Discretisation 66
  11.9.3 Number of Samples 66
  11.10 Density Assignment 66
  11.11 Validation 66
  11.11.1 Visual Validation 66
  11.11.2 Grade versus Elevation Plots 66
  11.11.3 Model versus Composite Statistics 66
  11.12 Confidence Classification of the Mineral Resource Estimate 66
  11.13 Reasonable Prospects of Economic Extraction 68
  11.13.1 QP Commodity Price 68
  11.13.2 Depletion 68
  11.13.3 Mineral Resource Reporting Cut-Off 68
  11.14 Mineral Resource Estimate 68
  11.15 Factors that May Affect the Mineral Resource Estimate 70
  11.16 Qualified Person’s Opinion 70
12 MINERAL RESERVE ESTIMATE 71
  12.1 Introduction 71
  12.2 Development of the Mining Case 71
  12.3 Design Guidelines 71
  12.3.1 General Design Guidelines - QTSN 72
  12.3.2 General Design Guidelines – QTSC, East, West and QTSS 72
  12.3.3 Depletion Guidelines 72
  12.4 Modifying Factors 73
  12.5 Block Model 74
  12.6 Cut-off Grade and Input Assumptions 74
  12.6.1 Revenue Factors and Price Assumptions 74
           

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SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC
Behre Dolbear Australia Pty Ltd
February 2023
Page 7

 

  12.6.2 Input Parameters 74
  12.6.3 Metallurgical Recoveries 76
  12.6.4 Stoping Cut-off Grade 76
  12.6.5 Development Cut-off Grade 76
  12.7 Mineral Reserve Estimate 76
  12.8 Factors That May Affect the Mineral Reserve Estimate 77
  12.9 Qualified Person’s Opinion 77
13 MINING METHODS 78
  13.1 Introduction 78
  13.2 Blasting 82
  13.3 Geotechnical Parameters 82
  13.4 Overview 82
  13.5 Rock Strength and In-Situ Stress 82
  13.6 Mining Implications 83
  13.7 Production Sequencing 83
  13.7.1 Ground Support 83
  13.8 Seismicity 84
  13.9 Backfill 84
  13.10 Paste Fill 84
  Paste Fill Reticulation 85
  13.12 Filling Status 85
  13.13 Hydrogeological Parameters 85
  13.14 Other Mine Design and Plan Parameters 85
  13.15 Mine Schedule 85
  13.16 Mining Fleet Requirements 86
  13.16.1 Equipment Productivity and Usage 86
  13.17 Mine Personnel Requirements 87
  13.18 Mine Map 87
  13.19 QP Opinion of the Mining Method 87
14 PROCESSING AND RECOVERY METHODS 89
  14.1 Introduction 89
  14.2 Comminution 89
  14.2.1 Primary Crushing 89
  14.2.2 Concentrator Operations 89
  14.3 Concentrate Product 92
  14.4 Tailings 92
  14.5 Other Processing Inputs 93
  14.5.1 Consumables 93
  14.5.2 Personnel 93
  14.5.3 Energy and Utilities 93
  14.6 QP Opinion on Processing and Recovery Methods 93
15 Infrastructure 94
           

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SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC
Behre Dolbear Australia Pty Ltd
February 2023
Page 8

 

  15.1.1 Roads 94
  15.1.2 Airstrip 94
  15.1.3 Rail 94
  15.1.4 Port Facilities 94
  15.2 Ventilation Infrastructure 94
  15.2.1 Ventilation Upgrade Project 94
  15.3 Power Supply 95
  15.4 Water Supply and Water Pipelines 95
  15.5 Tailings Storage Facility 95
  15.6 Workforce Accommodation 96
  15.7 Site Buildings and Services 96
  15.8 GP Opinion on Infrastructure 96
16 Market Studies 97
  16.1 Copper Market Outlook 97
  16.2 Competition 98
  16.3 Copper Pricing 98
  16.3.1 Global Copper Supply and Demand 98
  16.3.2 Copper Price Projections 100
  16.4 Commercial Contracts 101
  16.5 Product Specifications Requirements 101
17 ENVIRONMENTAL STUDIES, PERMITTING AND PLANS, NEGOTIATIONS OR AGREEMENTS WITH LOCAL INDIVIDUALS OR GROUPS 102
  17.1 Introduction 102
  17.2 Baseline and Supporting Studies 102
  17.2.1 Environmental Management and Reporting System 102
  17.3 Permitting 102
  17.3.1 Introduction 102
  17.4 Mine Operating Plan 103
  17.5 Mine Waste Management 103
  17.6 Tailings Disposal 103
  17.7 Water Management 104
  17.7.1 Water Balance 105
  17.7.2 Recycling and Water Saving Measures 105
  17.7.3 Surface Water Monitoring 105
  17.7.4 Ground Water Monitoring 105
  17.8 Social Considerations, Plans, Negotiations and Agreements 106
  17.8.1 Native Title 106
  17.8.2 Community 106
  17.9 Cultural Heritage 107
  17.9.1 Aboriginal Heritage 107
  17.9.2 European Heritage 107
  17.10 Mine Rehabilitation and Closure Costs 108
           

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SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC
Behre Dolbear Australia Pty Ltd
February 2023
Page 9

 

  17.10.1 STSF Closure 110
  17.10.2 Rehabilitation Monitoring 110
  17.11 Qualified Person’s Opinion on the Adequacy of Current Plans to Address Any Issues 110
18 Capital and Operating Costs 111
  18.1 Capital Costs 111
  18.1.1 Introduction 111
  18.1.2 Basis of Estimate 112
  18.1.3 Maintenance of Fixed and Mobile plant 112
  18.1.4 Geological Drilling 113
  18.1.5 Replacement of Major Equipment 113
  18.1.6 Process Sustaining Capital 113
  18.1.7 Capitalised Underground Development 113
  18.1.8 Rehabilitation of Project Facilities 113
  18.1.9 Accuracy and Contingency 113
  18.2 Operating Costs 113
  18.2.1 Introduction 113
  18.3 Operating Costs 114
  18.3.1 Introduction 114
  18.3.2 Realisation Costs and Offsite Costs 115
  18.3.3 Treatment and Refining Charges 115
  18.3.4 Basis of Estimate 116
  18.4 Qualified Person’s Opinion on the Adequacy of Capital and Operating Costs 116
19 Economic Analysis 117
  19.1 Forward-looking Information Caution 117
  19.2 Methodology 117
  19.3 Principal Assumptions 117
  19.3.1 Commodity Pricing 117
  19.3.2 Discount Rate 117
  19.3.3 Exchange Rate 117
  19.4 Results of Economic Analysis 117
  19.5 Sensitivity Analysis 118
  19.6 Qualified Person’s Opinion on the Economic Analysis 119
20 Adjacent Properties 120
21 Other Relevant Data and Information 120
22 Interpretation and Conclusions 121
  22.1 Conclusion 121
  22.2 Risks 122
  22.3 Risk Mitigation Factors 126
  22.4 Opportunities 127
23 Recommendations 128
24 References 129
25 Reliance on Information Provided by the Registrant 130
           

BEHRE DOLBEAR

 

 

SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
Behre Dolbear Australia Pty Ltd Page 10

 

GLOSSARY OF TERMS AND ABBREVIATIONS

 

Term/Abbreviation  Description
    
A$  Australian Dollar
Ag  Silver
ALS  Australian Laboratory Services
AMC  AMC Consultants Pty Ltd
ANCOLD  Australian National Committee on Large Dams
AEMR  Annual Environmental Management Report
Au  Gold
AuriCula  AuriCula Mines Pty Limited
Ausenco  Ausenco Pty Limited
BBE  BBE Consulting (Australasia)
BDA  Behre Dolbear Australia Pty Limited
Behre Dolbear  Behre Dolbear & Company Inc.
CDA  Canadian Dam Association
CHF  Cemented Hydraulic Fill
CMPL  Cobar Management Pty Limited
CPF  Cemented Paste Fill
CRF  Cemented Rock Fill
CSA  CSA Copper Mine
CSC  Cobar Shire Council
CTD  Central Tailings Discharge
Cu  Copper
Cube  Cube Consulting Pty Limited
DHEM  Drill Hole Electromagnetic (Survey)
DIDO  Drive-in Drive-out
DPIE  Department of Planning Infrastructure and Environment (in NSW)
EL  Exploration Licence
EMP  Environmental Management Plan
EMS  Environmental Management System
EPA  Environmental Protection Agency (in NSW)
EP&A Act  Environmental Planning and Assessment Act (in NSW)
FAR  Fresh Air Raise
FIFO  Fly-In Fly-Out
FOS  Factor of Safety
FW  Footwall
G&A  General and Administration
Glencore  Glencore Public Limited Company
g/t  Gram Per Tonne
GSM  Golden Shamrock Mines Pty Limited
ha  Hectare (10,000m2)
Helix  Helix Resources Limited
HPIFR  High Potential Injury Frequency Rate
HW  Hangingwall
ITASCA  ITASCA Australia Pty Limited
JORC Code  Joint Mineral Reserve Committee (Australasian Resource/Reserve Code)
JV  Joint Venture
km  Kilometre
km2  Square Kilometre
ktoz  Thousand Troy Ounces
kt  Thousand Tonnes
ktpa  Thousand Tonnes per Annum
kV  Kilovolts
lb  Pound
LFB  Lachlan Fold Belt
LHD  Load-Haul-Dump (Mining Units)
LHOS  Long Hole Open Stoping
LOA  Life of Asset (Resource Estimate or Financial Model)
LOM  Life of Mine
LTIFR  Lost Time Injury Frequency Rate
m  Metre
m3/s  Cubic Metres Per Second
µm  Micron

 

BEHRE DOLBEAR

SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
Behre Dolbear Australia Pty Ltd Page 11

 

GLOSSARY – ABBREVIATIONS USED CONTINUED

 

Term/Abbreviation  Description
    
M  Million
MAC  Metals Acquisition Corporation
mbs  Metres Below Surface
ML/day  Megalitres per Day
MLpa  Megalitres per annum
MII  Measured, Indicated and Inferred (Mineral Resources)
mm  Millimetre
MNE  May Not Exist (Material in Mining Inventory)
MPa  Mega Pascal
MPL  Mining Purpose Lease
MRE  Mineral Resource Estimate
Mt  Million Tonnes
Mtpa  Million Tonnes Per Annum
MVA  Megavolt Ampere
MW  Megawatt
MWBAC  Megawatt Bulk Air Cooling
MWE  Megawatt Equivalent
NAF  Non-Acid Forming
NC  Non-Classified (Material in Mining Inventory)
NIR  Not In Reserve (Material in Mining Inventory)
NNE  North-Northeast
NNW  North-Northwest
NRAR  Natural Resource Access Regulator (in NSW)
NSR  Net Smelter Return
NSW  New South Wales
NTSF  Northern Tailings Storage Facility
OK  Ordinary Kriging
OR  Mineral Reserves
Oxley  Oxley Exploration Pty Limited
P80  80% Passing
PAF  Potential Acid Forming
Q  Quarter (year)
QA/QC  Quality Assurance/Quality Control
QP  Qualified Person
QPE  Quattro Project Engineering
QTSC  QTS Central (Deposit)
QTSN  QTS North (Deposit)
QTSS  QTS South (Deposit)
RAR  Return Air Raise
RC  Reverse Circulation
RL  Relative Level
RQD  Rock Quality Designation
SAG  Semi-Autogenous Grinding (Mill)
SAP  SAP Business Management System
SEC  United States Securities and Exchange Commission
S-K Report  SEC Regulation S-K Technical Report
STSF  Southern Tailings Storage Facility
t  Tonne (1,000 Kilograms)
t/m3  Tonnes per Cubic Metre
the Transaction  1.5% Copper NSR Royalty to Glencore
Transaction Agreement  Definitive Sale and Purchase Agreement
TRIFR  Total Recordable Injury Frequency Rate
TSF  Tailings Storage Facility
US$  US Dollar
VDR  Virtual Dataroom
WB  Wet Bulb (Temperature)
wmt  Wet Metric Tonne

 

BEHRE DOLBEAR

SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
Behre Dolbear Australia Pty Ltd Page 12

  

1EXECUTIVE SUMMARY

 

1.1Summary

 

Behre Dolbear Australia Pty Limited (“BDA”) was engaged by Metals Acquisition Corp. (“MAC” or the “Company”) to prepare an independent Technical Report Summary (“Technical Report” or the “Report”) on the CSA Copper Mine (“CSA” or the “Project”), located in western New South Wales, 11 kilometres (“km”) northwest of the town of Cobar, Australia.

 

The purpose of this Technical Report is to report the Mineral Reserve Estimate and Mineral Resource Estimate for CSA, both of which have an effective date of December 31st, 2022. This report has an effective date of February 21st, 2023.

 

This Technical Report Summary conforms to United States Securities and Exchange Commission’s (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations and Item 601 (b)(96) Technical Report Summary (collectively “S-K 1300”).

 

1.2Property Description, Ownership and Mineral Rights

 

The CSA Copper Mine is located in western New South Wales, Australia, (latitude 31° 24’ 32.42°S, longitude 145° 48’ 0.20°E), 11 kilometres (“km”) northwest of the town of Cobar and 600km west-northwest of Sydney (Figure 1).

 

Cobar Management Pty Ltd (“CMPL”) is the Australian legal entity and operator of CSA mine. CMPL is the registered owner of all key assets of the mine including property, mineral, fixed and mobile assets used in the operation. CMPL is ultimately owned by Glencore International AG (“Glencore” or “GIAG”) who, on 17 March 2022, entered into a binding sale and purchase agreement to sell CMPL to MAC.

 

CMPL holds a Mining Lease (CML5) over the CSA deposit, surrounded by two Exploration Licences (EL5693 and EL5983) and one Exploration Licence Application (ELA6565) (Figure 2). CMPL also has joint venture exploration interests in exploration areas to the south of Cobar (Figure 2). CML5 covers an area of approximately 24.7 square kilometres (“km2”), while the surrounding EL5693 and EL5983 cover approximately 366km2 and ELA6565 covers approximately 138 km2. Ore is produced principally from two steeply dipping underground mineralised systems, QTS North (“QTSN”) and QTS Central (“QTSC”) from depths generally between 1,500- 1,800 metres (“m”) below surface. The current depth of the decline is around 1,900m. CMPL mining operations average around 1.1 million tonnes of ore per annum (“Mtpa”). The underground mine is serviced by two hoisting shafts and a decline. The ore is crushed underground, hoisted to surface, and milled and processed through the CSA concentrator.

 

1.3Accessibility, Climate, Local Resources, Infrastructure and Physiography

 

All-weather access to the CSA mine is provided via sealed highways and public roads, and the mine is linked by rail to the ports of Newcastle and Port Kembla, a suburb of Wollongong, from where the copper concentrate product is exported. Cobar is serviced by a sealed airstrip with commercial flights to and from Sydney.

 

The climate of Cobar is semi-arid with evaporation typically exceeding rainfall by a ratio of 6:1. The mean annual rainfall for Cobar is approximately 400mm. During summer months, maximum temperatures typically range between 28-39ºC and during the winter months, maximum temperatures typically range between 13-20ºC. Minimum temperatures in the winter months typically range between 5-9ºC. 

 

The project is well served by existing infrastructure which includes power supply, water supply, site buildings, and service facilities. Power is supplied to the site from the state energy network via a 132 kilovolt (“kV”) transmission line. Further backup power for the site is supplied by diesel power generators.

 

The majority of the water supply for the operation is provided by the Cobar Water Board from a weir on the Bogan River at Nyngan (Figure 1) through a network of pumps and pipelines. Additional water is available from tailings water recycling, surface water capture, and an installed borefield.

 

1.4History

 

The CSA mine has a long operating history, with copper mineralisation first discovered in 1871. Early development commenced in the early 1900s, focussing on near surface mineralisation. In 1965, Broken Hill South Limited developed a new mechanised underground mining and processing operation, with new shafts, winders, concentrator, and infrastructure; subsequently, it operated under several different owners, until the property was acquired by GIAG in 1999. The direct owner and operator of the mine is Cobar Management Pty Ltd (CMPL), a wholly owned subsidiary of Glencore and the entity to be acquired by MAC.

 

BEHRE DOLBEAR

 

Metals Acquisition Corp. CSA Mine

 

Figure 1 LOCATION PLAN
BDA - 0230-02-Feb. 2023 Behre Dolbear Australia Pty Ltd

 

Metals Acquisition Corp. CSA Mine

 

Figure 2 CSA MINE TENEMENTS AND JOINT VENTURE TENEMENTS
BDA - 0230-02-Feb. 2023 Behre Dolbear Australia Pty Ltd

SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
Behre Dolbear Australia Pty Ltd Page 15

   

1.5Geological Setting, Mineralisation and Deposit

 

The CSA deposit is located within the Cobar mineral field in the Cobar Basin, a north-south mineralised belt containing copper, gold, and lead-zinc mineralisation, with five currently operating mines within 80km of Cobar (Figure 2). Mineralisation at the CSA mine is hosted within the Silurian-age CSA Siltstone, a steeply dipping sequence of interbedded siltstones and sandstones. Mineralisation is associated with north-south faulting and northwest cross-cutting structures; studies indicate that reactivation of the faults played a significant role in providing fluid pathways for mineralising fluids and dilational zones for the formation of the mineral deposits.

 

The CSA mineralisation occurs in five known systems: Eastern, Western, QTS North (“QTSN”), QTS Central (“QTSC”) and QTS South (“QTSS”) (Figure 3). Within these systems multiple lenses occur; lenses are typically 5-30m wide, with relatively short strike lengths (<300m) but significant down plunge extent of up to 1000m. Not all the systems extend to surface; QTSN which accounts for the bulk of the current production tonnes is developed from 600m depth while QTSC is developed from a depth of around 1,200m.

 

The dominant copper sulphide is chalcopyrite (CuFeS2); silver is also present as acanthite (Ag2S).

 

1.6Exploration

 

The CSA deposit was discovered in 1871 with a further discovery of copper-rich ore in 1905, however, a slump in metal prices and an underground fire led to the closure of the mine in 1920. Zinc Corp Ltd (through its subsidiary Enterprise Exploration) explored the area from 1947 to 1957 and commenced re-development work in 1952. Cobar Mines Pty Ltd was created in 1956, mining recommenced in 1962 and production commenced in 1965 from the Eastern (Cu-Zn) and Western (Pb-Zn-Ag) System lenses.

 

The QTS System was discovered in the mid-1970s with the QTS North lenses being the main source of the copper ore at the time. CMPL came under the ownership of Conzinc Riotinto of Australia (“CRA”) in 1980, Golden Shamrock Mines (“GSM”) in 1993 and Glencore in 1999. During this time, there has been ongoing periods of geochemical and geophysical data acquisition, shallow RC drilling and deeper diamond drilling.

 

The CSA deposit has been drilled using fully cored diamond drill holes drilled either from surface or underground, primarily using NQ size (47.6mm diameter core). The deposits have been defined by over 6,500 holes totalling approximately 900km of core, although data from many of the historical drill holes is not used for current resource estimation, being located in the upper mined out levels of the deposit; current resource estimates are based on approximately 3,900 drill holes and more than 39,000 samples. Underground diamond drilling over the last five years has averaged 22,000m per year, with rates of 24-25,000m per year achieved over the last two years.

 

1.7Sample Preparation, Analysis and Security

 

Sample preparation and assaying is carried out by independent laboratory, Australian Laboratory Services (“ALS”) in Orange, NSW, using an aqua regia digest and the Inductively Coupled Plasma Atomic Emission Spectrometry (“ICP-AES”) analytical method, with analysis for a standard suite of elements including copper, zinc, lead, and silver. Quality Assurance/Quality Control (“QA/QC”) protocols have been comprehensive since 2004 and include insertion of standards (supplied by Ore Research and Exploration Pty Limited), blanks and duplicate samples at a frequency of approximately 1 in 30 samples. CSA monitors QA/QC data; the sampling and assaying data for the main elements are considered reliable and without material bias and sample security arrangements are appropriate and satisfactory.

 

1.8Data Verification

 

Basic database validation checks are carried out by CMPL personnel. These included sample from and to depths, geology depths, record duplication and missing collar duplication checks, as well as collar survey and down hole survey checks. Assay certificates were verified against the acQuire database dispatch and laboratory job numbers. Extensive random checks of the digital database were made against hardcopy/pdf format assay certificates and geology logs. Core recovery is generally greater than 95%.

 

1.9Mineral Processing and Metallurgical Testing

 

With 55-years of operating history (23-years under Glencore ownership), the CSA orebody mineralogy and the operating performance of the processing plant is well understood, with the processing plant consistently achieving metallurgical recoveries in the order of 97-98% to produce a high-quality 26-27% Cu concentrate. Other than routine day-to-day process performance monitoring and improvement on the internal metallurgical models, no metallurgical testwork is generally undertaken or warranted unless new styles of mineralisation are encountered.

 

BEHRE DOLBEAR

 

Metals Acquisition Corp. CSA Mine

 

Figure 3 PLAN AND LONG SECTION - MINERALISED SYSTEMS
BDA - 0230-01-April 2022 Behre Dolbear Australia Pty Ltd

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1.10Mineral Resource Estimates

 

The Mineral Resource estimate for the CSA Mine is reported here in accordance with the SEC S-K 1300 regulations. The Mineral Resources presented in this section are not Mineral Reserves and do not reflect demonstrated economic viability. The reported Inferred Mineral Resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that all or any part of this Mineral Resource will be converted into Mineral Reserve. All figures are rounded to reflect the relative accuracy of the estimates and totals may not add correctly. Mineral Resource estimates exclusive of Mineral Reserves are summarized in Table 1.1. on a 100% ownership basis. The effective date of the Mineral Resource estimate is December 31, 2022.

 

Table 1.1

 

Copper and Silver Mineral Resources Exclusive of Mineral Reserves as of 31 December 2022 - Based on a Copper Price of US$7,400/t

 

System  Resource Category  Tonnes Mt 

Cu % 

  Cu Metal Kt  Ag g/t  Ag Metal Mtoz  

All Systems 

  Measured  0.0   0.0   0.0   0.0   0.0  
   Indicated  0.0  0.0  0.0  0.0  0.0  
   Meas + Ind  0.0  0.0  0.0  0.0  0.0  
   Inferred  3.5  5.6  193  20  2.2  
   Total  3.5  5.6  193  20  2.2  

Notes: 

Mineral Resources are reported as of 31 December 2022 and are reported using the definitions in Item 1300 of Regulation S-K (17 CFR Part 229)(SK1300);

Mineral resources are reported Excluding Mineral Reserves;

The Qualified Person for the estimate is Mike Job, of Cube Consulting Pty Ltd;

Price assumptions used in the estimation include US$7,400/tonne of copper and US$21.70/ troy ounce of silver; the copper price is an approximate 9% discount to consensus copper pricing as at Feb 1, 2023;

Geological mineralisation boundaries defined at a nominal 2.5% Cu cut off;

Metallurgical recovery assumptions used in the estimation were 97.5% copper recovery and 80% silver recovery;
Mineral Resources reported as dry, raw, undiluted, in-situ tonnes;
Costs assumptions during cut-off grade calculation are A$98/t ore mined, A$20/t ore milled and A$19/t G&A;

Figures are subject to rounding.

 

Approximately 73% of the current Mineral Resource tonnage and 78% of the contained copper lies within the QTSN and QTSC systems.

 

1.11Mineral Reserve Estimate

 

CSA produces an annual Mineral Reserve estimate, based on actual stope designs incorporating mining losses and mining dilution. The Mineral Reserve, in accordance with the Subpart 229.1300 of Regulation S-K, is based on Measured and Indicated resources only. CSA’s December 2022 Mineral Reserve estimate is shown in Table 1.2.

 

Table 1.2

 

Copper and Silver Mineral Reserves as of 31 December 2022 - Based on a Copper Price of US$7,400/t

 

System  Reserve Category  Tonnes Mt 

Cu %

  Cu Metal Kt  Ag g/t  Ag Metal Mtoz  

All Systems 

  Proven  4.8   4.3   208.8   17.8   2.8  
   Probable  3.1  3.5  105.3  13.5  1.3  
   Total  7.9  4.0  314.1  16.1  4.1  

Notes: 

Mineral Reserves are reported as of 31 December 2022 and are reported using the definitions in Item 1300 of Regulation S-K (17 CFR Part 229)(SK1300);

The Qualified Person for the estimate is Jan Coetzee, an officer of the Registrant’s Australian subsidiary;

Price assumptions used in the estimation include US$7,400/tonne of copper and US$21.70/ troy ounce of silver; the copper price is an approximate 9% discount to consensus copper pricing as at Feb 1, 2023;

Mineral Reserves reported as dry, diluted, in-situ tonnes using a Stope breakeven cut-off grade of 2.2% Cu and a Development breakeven cut-off grade of 1.0% Cu;
Costs assumptions during cut-off grade calculation are A$98/t ore mined, A$20/t ore milled and A$19/t G&A;
Metallurgical recovery assumptions used in the estimation were 97.5% copper recovery and 80% silver recovery;
Figures are subject to rounding.

 

BDA notes that Mineral Reserve underpins an estimated six-and-a-half-year mine life.

 

BEHRE DOLBEAR

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1.12Mining Methods

 

The CSA mine uses mechanised long-hole open stoping (“LHOS”) with cemented paste fill (“CPF”) as the preferred mining method. A modified Avoca stoping method has been used successfully in the narrower lenses (principally QTSC). The future dominance of the QTSN orebodies, representing approximately 70% of the currently estimated Mineral Reserve, creates some concentration risk. Estimated Mineral Resources, identified by Cube, in the other orebodies and remnant areas of the mine create contingent ore sources. One of the critical aspects to achieving production objectives is prioritising and increasing the mine development and available access to drilling and extraction horizons.

 

Copper production at the CSA mine is currently mine-constrained. Considerable effort in recent years, and the current capital expenditure programmes underway, are all aimed at maximising ore production as the mine gets deeper. MAC is targeting future ore production of approximately 1.2Mtpa, but increasing depth introduces additional mining challenges, increased mining costs and also some lowering of delivered grades.

 

With the mine progressively becoming deeper, rock stresses are increasing, and more ventilation and cooling was required. A significant capital works program was completed in 2022 to increase both ventiliation and cooling to accommodate the current LOM plan. In addition, the current resource estimate demonstrates that the mineralization tonnes per vertical metre are diminishing with depth. Importantly, with increasing depth, travel times for employees and equipment increase and issues around ore and waste movement from the lower levels of the mine to the hoisting shaft or distant stope voids (in the case of waste rock) require more closely coordinated planning and management.

 

Despite the combination of geotechnical stress increasing with depth and the cleaved and bedded siltstones, ground conditions at the current base of the mine appear fair. A recent rockfall towards the bottom of the decline, convergence and buckling in some development drives, and issues with a recent vent raise, are not unexpected. Changes to stope design and sequencing as well as positioning of access drives, declines and ventilation infrastructure and ground support practices are all being reassessed in light of the geotechnical conditions, and improvements can and are being made.

 

The mining operation needs to be geotechnically driven; a move to mining quality over quantity is required to match the geotechnical conditions and logistical challenges that come from mining at depth.

 

1.13Processing and Recovery Methods

 

The CSA processing plant is a conventional underground crush, surface grind and flotation circuit. The grinding mills, especially the Semi Autogenous Grinding (“SAG”) mills, which are around 50 years old, as well as the coarse ore bins (which date from the 1960s), are causing downtime problems. The proposed changeout of the old SAG mill units with new units would return the grinding circuit overall utilisation to 91-93%, with one mill change out completed in 2022 and the second mill changeout scheduled for 2023. With this planned grinding mill update, BDA would expect throughput of 1.4Mtpa to be possible, but notes that mill throughput is still likely to be restrained by the ability of the mining operation to increase the mined ore tonnage.

 

BDA considers the metallurgical performance at CSA to be good, with consistently high copper recoveries and reasonable copper concentrate grades and payable silver grades. Based on the consistency of ore feed and metallurgy over the years there is no reason to consider this performance will not be maintained.

 

1.14Infrastructure

 

Road access to the mine site from Sydney is via National Highway No. A32, the Barrier Highway, a high-quality rural highway to Cobar and from there to the mine site on sealed urban roads.

 

Cobar is serviced by a sealed airstrip with commercial flights three times per week to and from Sydney.

 

The site is serviced by a rail line which allows transport of concentrate product to the Port of Newcastle for export. Concentrate is loaded into rail wagons at the site and railed to Newcastle along the NSW rail network. Railing to Port Kembla, south of Wollongong, is also an option.

 

Power supply to the site is via a 132kV transmission line from Essential Energy’s western NSW network. The Essential Energy network is supplied by a mix of conventional and renewable power generation. A 22kV line is also connected to the site from Cobar and is available for limited supply in emergencies. Further backup power is supplied by diesel power generators.

 

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The majority of water supply for the operation is provided by the Cobar Water Board from a weir on the Bogan River at Nyngan through a network of pumps and pipelines. Additional water is available from tailings water recycling, surface water capture and a borefield installed in 2019. Water demand is around 3 megalitres per day (“ML/day”) in summer, with most water supplied by the Cobar Water Board system. The Cobar Water Board system is adequate to supply the operation up to around 1.2Mtpa; the borefield is only required during periods of drought or should a plant feed rate in excess of 1.2Mtpa be considered for extended periods.

 

The majority of the workforce is accommodated in Cobar with some senior staff employed on a fly in/fly out (“FIFO”) or drive in/drive out (“DIDO”) arrangement. No workforce accommodation is provided at the mine site.

 

Site buildings comprise site offices, warehouses, and services buildings. Site services include power and water reticulation facilities, communications systems and fuel storage and dispensing facilities.

 

South Tailings Storage Facility (“STSF”)

 

The STSF average deposition rate is 55kt per month. At the current rate, based on the latest Lift 9 embankment raise, the STSF has capacity to store tailings up to December 2024. Further embankment raises, Lift 10 and Lift 11, are planned to be designed and permitted within the next 12 months and Lift 10 constructed before mid-2024. Lift 10 is expected to have sufficient capacity to the end of the reserve LOM.

 

The STSF appears to be well operated with no significant issues in relation to the facility’s integrity. CSA has commenced a study to install buttressing in specific areas on the STSF wall to improve the Factor of Safety (“FOS”) to the Post Seismic (Liquified Strength). The current early phase estimate to rectify the FOS is approximately A$5M and is expected to be completed in 2023.

 

Waste Rock

 

Waste rock from underground development is backfilled into mined out stopes where possible, but any excess is hoisted or trucked to surface for storage on waste dumps. Most waste rock is classified as Non-Acid Forming (“NAF”) but around 30% of the waste material is classified as Potential Acid Forming (“PAF”) rock. All waste rock materials are geochemically tested for issues related to acid rock drainage (“ARD”) and potential for metal leaching. Only suitable, low risk waste rock material is hoisted and stockpiled on the surface.

 

1.15Market Studies

 

According to analysis conducted by global research and consultancy group Wood Mackenzie, the world usage of refined copper has more than tripled in the last 50 years thanks to expanding sectors such as electrical and electronic products, building construction, industrial machinery and equipment, transportation equipment, and consumer and general products. Because of its properties, copper has become a major industrial metal, ranking third after Fe and aluminium in terms of quantities consumed.

 

The copper market in which CMPL operates is a deep, liquid market where copper is traded globally in both cathode and concentrate formats. CMPL operates within the global copper industry and faces competition from other copper producers for its main product.

 

The cost of turning copper and silver in concentrate into final usable copper and silver is expressed in the smelter charges set annually between the major copper producers and major Asian and European smelters.

 

These charges rise and fall depending on the global supply and demand for copper as well as the freight costs relative to other producers.

 

Due to the steadily increasing presence of new, low-quality concentrates (containing higher deleterious elements), a bifurcated market for concentrates is occurring, with the smelter terms for high-quality concentrate (containing lower deleterious elements) being appreciably more favourable to the miner than for the concentrate with higher deleterious elements. High-quality concentrate is increasingly in demand to be used as blending feedstock material and it is expected that this divergence of smelter terms will continue and likely increase as more of the less desirable, low-quality concentrate comes to market.

 

The concentrate produced at CSA is a high-quality product, with no deleterious elements above penalty levels and is highly sought after for blending with other concentrates.

 

Smelter terms are typically settled on an annual ‘Benchmark’ basis between major miners and smelters and published as a reference Benchmark. In addition, smelters often purchase concentrate on the spot market which is more reflective of the short-term supply and demand balance.

 

BEHRE DOLBEAR

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As part of MAC’s binding sale and purchase agreement with GIAG, MAC has entered into an agreement to sell all concentrate product from the CSA mine to GIAG (the “Offtake Agreement”). The Offtake Agreement for the CSA mine commits 100% of the produced concentrate for the life of mine to GIAG, as the sole customer. The offtake terms are referenced to the annual Benchmark terms set by the industry and published annually, and are therefore considered market competitive.

 

Broker consensus recommendation pricing (“Broker Consensus” or “Consensus”) for future copper pricing is regularly updated by analysts as their views change on supply, demand and other factors such as the political/social instability of major copper producing countries and the time and cost of bringing new supply online. In general, there is a view that copper prices are well supported by the expected increase in demand on copper products, driven by electrification of transport and energy transition to renewables.

 

The copper price utilized by the Company in its assessment of Mineral Resources, Mineral Reserves and associated economic analysis is US$7,400/t. This price represents a 9% discount to the long-term, real, Broker Consensus copper price outlined and is therefore considered a conservative approach to the assessments.

 

1.16Environmental Studies, Permitting and Plans, Negotiations or Agreements

 

CSA operates under a documented Environmental Management System (“EMS”) which forms the basis of environmental management at CSA mine and includes appropriate procedures, standards, and Environmental Management Plans (“EMP”) to ensure all regulatory requirements are met.

 

The planned future STSF containment raises, Lifts 10, and the potential Lift 11, have commenced early phase planning to provide additional storage capacity. Regulatory standards that currently apply to the STSF are Dam Safety NSW, Australian National Committee on Large Dams (“ANCOLD”) and the Glencore Protocol 14.

 

There is strong community support for the CSA operation and CSA has a positive working relationship with Cobar Shire Council (“CSC”). This is not unexpected given that the CSA mine is the largest employer in the Cobar region, with approximately 500 employees and contractors.

 

1.17Capital and Operating Costs

 

Capital works for which capital costs have been estimated generally comprise:

 

underground mining capital works, including upgrading of the ventilation and cooling facilities, maintenance of fixed and mobile plant, exploration and resource drilling, and replacement of major equipment

upgrading the grinding circuit in the concentrator and on-going sustaining capital for the concentrator

capitalised underground development

rehabilitation of project facilities at the end of the mine life.

 

The MAC forecast costs for capital works over the life of the mine are summarised in Section 18. For the majority of the significant capital works in the early years, the estimates are based on feasibility study standard engineering and unit costs from quotations from prospective suppliers and contractors or historical cost records. The estimates for the later years will have a higher level of confidence as the projects move forward in the LOM. Capital estimates for 2023 are A$63.4M and for 2024, A$50.2M. It is understood that the estimates for the major capital works include contingency allowances of around 10%.

 

Actual site operating cost were US$1.39/lb Cu produced in 2021 for 1.07Mt milled. For 2022, actual site operating costs were US$1.84/lb Cu for 1.03Mt milled.

 

The MAC forecast operating costs are based on 2022 actual cost for a similar level of forecast annual production, BDA considers this to be a reasonable estimate of future costs. With planned productivity improvements, BDA recognised that there is scope for cost improvement beyond those forecast.

 

1.18Economic Analysis

 

This section contains forward-looking information related to economic analysis for the Project. The material factors that could cause actual results to differ materially from the conclusions, estimates, designs, forecasts or projections in the forward-looking information include any significant differences from one or more of the material factors or assumptions that were set forth in this sub-section including estimated capital and operating costs, project schedule and approvals timing, availability of funding, projected commodities markets and prices.

 

BEHRE DOLBEAR

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All costs, prices, and monetary values are in Q4 2022 United States Dollars (US$).

 

The economic analysis on CSA was conducted based on a mine design and schedule of the copper ore outlined in the Mineral Reserves (“Reserve Case”). A Discounted Cashflow (“DCF”) model was developed for this Reserve Case using copper and silver product prices of US$7,400/t and US$21.7/ troy oz, respectively. The Company elected to take a conservative approach to the economic evaluation and has applied a 9% discount to the long-term, real, Broker Consensus copper price outlined in Section 16.3.

 

The QP is of the opinion that these prices reasonably reflect a conservative view of current market prices and are reasonable to use as forecast future prices for the purpose of the economic analysis for this Study.

 

The discounted cashflow establishes that the Mineral Reserves estimate provided in this report are economically viable. The base case after-tax NPV is estimated to be US$566M. The Net Present Value for this study is most sensitive to copper price.

 

Given the extent of historical operations and operating knowledge at CSA, the QP considers the accuracy and contingency of cost estimates used to be well within a Feasibility Study (“FS”) standard and sufficient for the economic analysis supporting the Mineral Reserve estimate.

 

1.19Qualified Person’s Conclusions and Recommendations

 

The CSA mine is well established and has a long operating history with well understood and predictable mineralized lodes leading to reliable Mineral Resource and Mineral Reserve estimation. Production reconciliation continues to support these estimates. Similarly, operating costs have been consistent over recent years providing confidence in the forecast operating costs.

 

MAC is forecasting a modest increase in annual ore mined to better utilise the capacity of the process plant; while this may lead to some reduction in unit costs, forecast operating costs have taken account of universal increases in input costs experienced across the entire mining industry.

 

BDA notes that a large proportion of the Mineral Resource lies in the deeper portions of the CSA mine. However, the Mineral Reserve is largely accessible from the existing mine development, and as such, should experience mining conditions no worse than experienced today. The mine life of approximately 6.5 years based on the currently estimated Mineral Reserve is therefore considered relatively low risk.

 

Glencore (the current owner until the MAC acquisition transaction completes) is coming to the end of an extensive capital investment programme at CSA to prepare the mine for coming years, including a major mine ventilation and refrigeration system upgrade, new ventilation shafts and raises servicing the lower levels of the mine, mobile equipment upgrades and replacement of two of the three ball mills in the process plant. At the completion of this investment programme this year, capital costs are expected to be of a sustainable nature only.

 

Overall, BDA considers that the current Mineral Resource estimate prepared by Cube Consulting and the Mineral Reserve estimate prepared by Mr Jan Coetzee provide a reasonable, but probably conservative, guide to the in situ and recoverable mineralisation respectively. Significant exploration potential remains within the mine area, most notably the down dip extensions of lodes which remain open at depth. Drilling at depth is relatively sparse, such that these projections cannot be incorporated into current Mineral Reserves. Nevertheless, there is reasonable expectation that the mine life will extend well beyond the current Mineral Reserve limits, and the mine has a long history of ongoing reserve replacement.

 

BEHRE DOLBEAR

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2INTRODUCTION

 

2.1Registrant

 

Behre Dolbear Australia Pty Limited (“BDA”) was engaged by Metals Acquisition Corp. (“MAC” or the “Registrant” or the “Company”) to prepare an independent Technical Report Summary (“Technical Report” or the “Report”) on the CSA Copper Mine (CSA or the Project), located in western New South Wales, 11 kilometres (“km”) northwest of the town of Cobar, Australia.

 

2.2Lead Author – Behre Dolbear Australia (“BDA”)

 

BDA is a mineral industry consulting group, specialising in Independent Technical Expert due diligence reviews, valuations and technical audits of Mineral Resources and Mineral Reserves, mining and processing operations, project feasibility studies, and Independent Engineer work on project development, construction, and certification. BDA specialises in review and due diligence work for companies and financial institutions. BDA is typically engaged to undertake independent expert reviews, to provide advisory services and to monitor a company’s or financial institution’s interests through the design, construction, commissioning, and ramp-up phases of a project.

 

The parent company, Behre Dolbear and Company Inc. has operated continuously as a mineral industry consultancy since 1911, and has offices or agencies in Denver, New York, Toronto, Vancouver, London, Hong Kong and Beijing, as well as Sydney. Behre Dolbear has over 60 Associates and Consultants covering a wide range of technical expertise and with experience in most parts of the world. BDA is the Australian affiliate and was founded in 1994. BDA operates independently, using primarily Australian-based consultants, but using overseas specialists where appropriate. BDA has acted on behalf of numerous international banks, financial institutions and mining clients and is well regarded as an independent expert engineering consultant in the minerals industry.

 

BDA is independent of MAC, CMPL and Glencore and has no interests in the companies or assets described in this report. BDA will receive its normal consulting fees and expenses for undertaking this review.

 

2.3Terms of Reference

 

2.3.1Report Purpose

 

The purpose of this report is to support the Mineral Resource Estimate and Mineral Reserve Estimate for the CSA mine, both of which have an effective date of December 31st, 2022.

 

This report has an effective date of February 21st, 2023.

 

2.3.2Terms of Reference

 

This Technical Report Summary conforms to United States Securities and Exchange Commission’s (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601 (b)(96) Technical Report Summary.

 

Unless otherwise indicated, all financial values are reported in United States (US) currency (US$) including all operating costs, capital costs, cash flows, taxes, revenues, expenses, and overhead distributions.

 

Unless otherwise indicated, the metric system is used in this Technical Report.

 

2.4Qualified Persons

 

2.4.1Qualified Persons of Behre Dolbear Australia

 

The qualifications and relevant experience for each Behre Dolbear Australia, Qualified Persons are shown below.

 

Mr Malcolm Hancock (BA, MA, FGS, FAusIMM, MIMM, MMICA, CP (Geol), MAIMVA) is a Principal and Executive Director of BDA. He is a geologist with more than 45 years of experience in the areas of resource/reserve estimation, reconciliation, exploration, project feasibility and development, mine geology and mining operations. Before joining BDA, he held executive positions responsible for geological and mining aspects of project acquisitions, feasibility studies, mine development and operations. He has been involved in the feasibility, construction, and commissioning of several mining operations. He has worked on both open pit and underground operations, on gold, copper, base metal, uranium, light metal and industrial mineral projects, and has undertaken the management and direction of many of BDA’s independent engineer operations in recent years. Mr Hancock has provided project direction, report management and editing.

 

BEHRE DOLBEAR

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Mr John McIntyre (BE (Min) Hon., FAusIMM, MMICA, CP (Min), MAIMVA) is a Principal and Managing Director of BDA. He is a mining engineer who has been involved in the Australian and international mining industry for more than 45 years, with operational and management experience in copper, lead, zinc, nickel, gold, uranium and coal in open pit and underground operations, including 5 years as a junior mining engineer in the CSA mine. He has been involved in numerous mining projects and operations, feasibility studies and technical and operational reviews in Australia, West Africa, New Zealand, North and South America, PNG and Southeast Asia. He has been a consultant for more than 30 years and has been Managing Director of BDA since 1994, involved in the development of the independent engineering and technical audit role. Mr McIntyre has provided project direction and was involved in the underground mining, geotechnical, hydrological and cost review.

 

Mr Mark Faul (BE. Min (Hons), MBA, MAppFin, FAusIMM, GAICD, MAIMVA) is General Manager of BDA is a mining engineer with extensive mining finance and investment experience with more than 35 years in the mining, resources investment banking and private equity investing in Australia, SE Asia, PNG, Africa, Europe and the Americas. His experience includes operations management, project feasibility and development, strategic planning, due diligence, cost assessment, financial modelling, project and corporate finance. He is experienced in a range of commodities, including gold, copper, nickel, base metals, platinum group metals, minor metals, diamonds and gemstones, rare earths, uranium, in both surface and underground mining, as well as coal seam gas and conventional oil & gas. He has extensive experience in mine management, economic analysis, project evaluation, valuation, risk management, project finance from a financier and investor prospective, and as a company director. Mr Faul was the Project Manager for this assignment, reviewing mining aspects, mine production plans, operating costs and compiling the report, and managing the review.

 

Mr George Brech (BSc. Geology, M.Sc. Engineering Geology, FAusIMM) is a Senior Associate of BDA with more than 45 years of experience in exploration and mining as an exploration and mine geologist. He is experienced in management, exploration, project evaluation, mine development, Mineral Reserve estimation, feasibility studies, open pit mine production, exploration and mine data evaluation, and open pit slope engineering. He has worked in various capacities on a large number of projects providing geological expertise in Australia (14 years), in southern Africa (7 years) and Southeast Asia (20 years). He is familiar with a wide range of commodities including gold, nickel, copper, wolfram, magnesite, iron ore and coal. He has extensive experience in the areas of resource/reserve estimation, reconciliation, independent expert and due diligence reports. Mr Brech has reviewed the geological data and drilling, sampling and assaying review, earlier resource/reserve assessment and grade control practices.

 

Mr Roland Nice (BSc, MAusIMM, LMCIM, MAIME, MIEAust, Chartered Engineer) is a Senior Associate of BDA with more than 40 years of experience as a professional metallurgical engineer. He has extensive experience in process engineering and operations, project evaluation, technical design and analysis. He has held senior management positions, including General Manager, Metallurgy and Concentrator Manager. Mr Nice has been closely involved with the process plant design, development and construction of gold, copper, uranium and base metal mines as well as numerous other metallurgical projects. He has worked principally in Australia, South America, Canada and Africa. Mr Nice has reviewed the metallurgical testwork, process plant design, plant performance and availability, plant capital and operating cost aspects.

 

Mr Richard Frew (BE Civil, MIE Aust) is a Senior Associate of BDA with more than 40 years’ experience as a planning, estimation and contracts engineer. He is experienced in contract management, feasibility study review, financial modelling, capital cost estimation, infrastructure, project controls, critical path analysis, project implementation and contract assessment. He has worked on a large number of projects providing management and project services to the owners or financiers, including major projects in Australia, the Philippines, Argentina, Mauritania, New Zealand and Romania. Mr Frew has reviewed the infrastructure, capital cost and project management aspects.

 

Mr Adrian Brett (BSc (Hon) Geol., MSc, MEnvir. Law, FAusIMM) is a Senior Associate of BDA with more than 40 years’ experience in environmental and geo-science, including the fields of environmental planning and impact assessment, site contamination assessments, environmental audit, environmental law and policy analysis and the development of environmental guidelines and training manuals. He has worked in an advisory capacity with several United Nations, Australian and overseas government agencies. He has completed assignments in Australia, Indonesia, PNG, Thailand, Laos, the Philippines, the Middle East, Africa and South America. Mr Brett is widely experienced in environmental and social/community audits, reviews of environmental and social management plans and policies, closure plans and gap analysis. Mr Brett has reviewed all relevant environmental aspects and social considerations, consistent with environmental standards and compliance, as well as closure plans.

 

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Company Address:

 

Behre Dolbear Australia Pty Limited

Level 9, 80 Mount Street 

North Sydney, New South Wales, Australia

 

2.4.2Qualified Persons of Cube Consulting

 

Mike Job of Cube Consulting Pty Limited, West Perth, acted as Qualified Person (“QP”) for the Mineral Resource estimate.

 

The qualifications and relevant experience for this Qualified Person is shown below.

 

Mr Mike Job (BSc Geol., MSc Geostatistics, FAusIMM) is a Principal Geologist and Director of Cube Consulting and has over 35 years mining industry experience in roles that have varied from mine operations to regional exploration and mineral resource estimation. He has worked on projects throughout Australia, Africa and North America and has experience with many commodities across varied geological environments. He has worked on projects for nickel (sulphide and laterite), many types of gold systems, copper, iron ore (hematite and magnetite), uranium, tin, polymetallic VMS deposits, and numerous specialty metals. His specialties include geological data gathering and interpretation, and Mineral Resource estimates that are practical, robust and auditable. He has sound technical expertise in resource estimation and grade control systems for both open cut and underground mines and has significant management experience at operating mines. He is an expert user of Datamine and Isatis software and has a solid base of geostatistical knowledge gained via his MSc in Geostatistics from the Centre for Computational Geostatistics at the University of Alberta in Canada.

 

Company Address:

 

Cube Consulting Pty Limited

4/1111 Hay Street 

West Perth, Western Australia

 

2.4.3Qualified Persons of Metals Acquisition Corp.

 

Mr Jan Coetzee of Metals Acquisition Corp. acted as QP for the Mineral Reserve estimate.

 

The qualifications and relevant experience for this Qualified Person are shown below.

 

Mr Jan Coetzee (GDMin, MAusIMM, CP (Min), RPEQ, QP) is an Officer of Metals Acquisition Corp Australia Pty Ltd. and has over 30 years of experience as a mining engineer. Mr Coetzee has worked primarily across Africa and Australia in various roles covering mine design and engineering, technical services, projects, studies and management. He is experienced in multiple minerals including platinum group elements, gold, copper, lead, zinc, silver and coal and has direct engineering experience across various mining methods, including open-cut, underground hard-rock and long-wall coal. Mr Coetzee has significant experience in senior management, operations, business improvement, strategic project studies and mine planning in long term design and planning of mining operations and, as a result, has acted previously as both Qualified Person under United States Securities and Exchange Commission regulation and Competent Person under Australia’s Joint Ore Reserves Committee (JORC) and the South African Code for the Reporting of Mineral Resources and Mineral Reserves (SAMREC). In addition to his diverse mining experience, Mr Coetzee has particular expertise in the CSA mine, having worked there as Senior Long Term Planning Engineer for over two years.

 

Company Address: 

 

Century House, Ground Floor Cricket Square, 

P.O. Box 2238 

Grand Cayman KY1-1107, Cayman Islands

 

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2.5Site Visits and Scope of Personal Inspection

 

Mr Mark Faul, General Manager of BDA (a Qualified Person) visited the CSA site in March 2022, held meetings with key mine operating management and received presentations on the mine’s recent performance and forecast production plans. A surface tour of the mine facilities and tailings storage facility and an underground tour of the mine infrastructure and lower mining levels was also undertaken.

 

Mr Jan Coetzee, officer of Metals Acquisition Corp Pty Ltd. and QP for the Mineral Reserve estimate, was employed at CSA mine for approximately two years (in 2020 and 2022) and has a thorough understanding of the mine and surrounding region.

 

2.6Information Sources

 

In addition to the site visit, BDA has reviewed technical data, management presentations and reports made available by the CSA mine in its virtual dataroom (“VDR”) and provided by MAC, Mr Mike Job of Cube Consulting (QP for the Mineral Resource) and Mr Jan Coetzee of MAC (QP for the Mineral Reserve).

 

The reports and documents listed in Section 24 of this Report were used to support the Report preparation.

 

All plans for mining operations, future plans, potential, forecasts, projections, and estimates of Mineral Resources, Mineral Reserves and LOM Mine Plans and Production Schedules are forward looking statements. BDA considers this report and its conclusions provide a fair and reasonable assessment of the CSA mine operations, future plans, and potential. BDA has used appropriately experienced consultants in the due diligence review. MAC has confirmed that the information supplied is complete and not misleading. However, any forecasts and projections cannot be assured and factors both within and beyond the control of MAC could cause the actual results to be materially different from BDA’s assessments and the projections contained in this report.

 

2.7Previous Reports on Project

 

This report with respect to the Project updates and supersedes the prior reports file by the Registrant (or its affiliates) with the United States Securities Exchange Commission on June 1, 2022 and December 23, 2022. 

 

Additional previous Mineral Resource and Mineral Reserve estimates are known to have been reported to other Non-US regulatory bodies by Glencore Plc. (LON: GLEN) under JORC Code 2012, however such works should not be considered in conformance with United States Securities and Exchange Commission’s (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601 (b)(96) Technical Report Summary.

 

All CSA Mineral Resource or Mineral Reserve statements developed or referred to in this report which are dated prior to the 31 December 2022 Mineral Resource Estimate or the Mineral Reserve Estimate presented in this Report, should not be considered as compliant with Subpart 229.1300 of Regulation S-K. For clarity, the 31 December 2022 Mineral Resource Estimate provided by Mr Mike Job (QP) and 31 December 2022 Mineral Reserve Estimate provided by Mr Jan Coetzee (QP) presented in this Report by BDA, are compliant with Subpart 229.1300 of Regulation S-K.

 

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3PROPERTY DESCRIPTION

 

3.1Property Location

 

The CSA Copper Mine (latitude 31° 24’ 32.42°S, longitude 145° 48’ 0.20°E) is located 11km northwest of the town of Cobar, in western New South Wales, Australia (Figure 1), approximately 600km west-northwest of Sydney.

 

Cobar Management Pty Ltd (CMPL) is the Australian legal entity and operator of CSA mine. CMPL is the registered owner of all key assets of the mine including property, mineral, fixed and mobile assets used in the operation. CMPL is ultimately owned by Glencore International AG who, on 17 March 2022, entered into a binding sale and purchase agreement to sell CMPL to MAC.

 

3.2Property and Title in Australia

 

The forms of Australian land title relevant to the CSA mine are listed below.

 

Crown Lands

 

Crown land is land that is owned and managed by the NSW Government. It accounts for approximately 42% of all land in New South Wales and carries special provisions. Crown land includes a range of land types, such as:

 

Crown lands held under lease, licence or permit

Community managed reserves

Lands retained in public ownership for environmental purposes

Lands within the Crown public roads network

Other unallocated lands.

 

Many non-tidal waterways across the state also comprise Crown land as do most tidal waterway land.

 

Western Lands Lease

 

Nearly all the land in the Western Division of NSW is held under Western Lands Leases granted under the Western Lands Act 1901. From 1 July 2018, this legislation was replaced by the Crown Land Management Act 2016 (“CLM Act”). The 6,600 Western Lands Leases include: 4,300 for grazing; 573 for agriculture; 1,593 for residence; 134 for mining and other specific purposes. Most leases are perpetual (ongoing) and can only be used for a designated purpose. The State charges an annual rent for leases in accordance with the CLM Act, grazing and agriculture lease rents are based on the total area of the property and on the environmental impact of the land use, including a credit for managed conservation. Rents for residential and business leases are 3% and 6% of the unimproved land value, respectively.

 

3.3Mineral Title in New South Wales

 

The types of NSW mineral titles relevant to the CSA mine are listed below.

 

Exploration in NSW is regulated under the Mining Act 1992. The aim is to encourage and help in the discovery and development of NSW’s mineral and coal resources and encourage ecologically sustainable development. Before exploring for minerals in NSW, an explorer must obtain an exploration licence.

 

Exploration Licence (“EL”)

 

This licence grants the title holder the exclusive rights to explore for a specific mineral or mineral group(s) within a designated area. ELs are typically granted and renewed for periods of 2–6 years. An EL does not permit mining, nor does it guarantee that a mining lease will be granted.

 

Exploration (Prospecting) Licence (“EPL”)

 

These licences were granted under the Mining Act 1973 to allow a title holder to explore for minerals (excluding coal) within a designated area. While EPLs are no longer granted, some remain active. Under the Mining Act 1992, EPLs are deemed to be exploration licences, however they do not permit mining, nor guarantee that a mining lease will be granted.

 

A mining (minerals) lease application is made when mining or production is economically, technically and environmentally feasible. At this stage companies must specify exactly what mineral(s) they intend to extract. Mining leases give the title holder the exclusive right to extract a specific resource over a selected area.

 

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To be granted a mining lease a development consent must be granted by the relevant consent authority, and an Environmental Protection Licence (EPL) must have been issued by the NSW Environmental Protection Agency under the Protection of the Environment Operations Act 1997.

 

Title holders must comply with all conditions of title and all relevant requirements of the Mining Act 1992 and associated regulations for the life of the lease.

 

Mining Lease (“ML”)

 

An ML gives the title holder the exclusive right to mine for a particular viable mineral resource within a selected area. To be granted a mining lease companies must prove that there is an economically mineable mineral resource within the area of the proposed mining lease, and that they have the financial and technical resources to carry out any mining in a responsible way.

 

Mining Purposes Lease (“MPL”)

 

These are leases granted for areas in mineral mining operations for purposes such as infrastructure where resource extraction does not take place. Hence, they will appear as ‘nil minerals’. MPLs were granted under the 1906 and 1973 Mining Acts. MPLs are no longer granted and leases for mining purposes are now categorised as MLs under the Mining Act 1992.

 

Consolidated Mining Lease (“CML”)

 

This is a mining lease which covers adjoining titles held by one title holder. On a CML, there is often a common border between where mining takes place or additional areas shown as ‘nil mineral’ areas, which is where production facilities and other infrastructure may be located.

 

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3.4Mineral Titles, Claims, Rights, Leases and Options

 

3.4.13.4.1 Mineral Titles

 

CMPL has an extensive mineral tenement holding located in the prospective Cobar Basin comprising one Mining Lease (CML5), two Mining Purposes Leases (MPL1093/1094), two wholly owned Exploration Licences (EL5693/5983), one Exploration Licence Application (ELA6565), two joint venture (“JV”) Exploration Licences (EL6223/6907) and three ELs in which CMPL’s interest has recently been converted to a royalty interest (EL6140/6501/6739) (Figures 2 and 4).

 

CML5 covers an area of approximately 24.7km2 (2,474 hectares (“ha”)), the MPLs total approximately 30ha, while the surrounding exploration tenements (EL5693 and 5983) cover approximately 366km2 and ELA6565 covers approximately 138km2. EL5693 and EL5983 are held by CMPL (through subsidiary Isokind Pty Ltd) and surround the CSA mine. In addition, CMPL has a joint venture with AuriCula Mines Pty Limited (“AuriCula”) covering the Shuttleton and Mt Hope Exploration Licence tenements south of Cobar (CMPL 90% interest). CMPL previously held joint venture interests with Oxley Exploration Pty Limited (“Oxley”) in the Restdown, Restdown South, and Horseshoe tenements southeast of Cobar, but these interests have recently been reduced to a royalty-only interest, being a 1% net smelter return interest on any mineral or metallic product.

 

Table 3.1

 

CMPL Tenement Holding (February 2023)

 

Tenement  Area  Granted  Expiry  Status  Details  Holder
CML5   2,474ha   01/12/1993   24/06/2028   Current   CSA Mine  Isokind Pty Ltd (CMPL)
MPL1093  16ha  05/02/1947  05/02/2029  Current  MPL for water harvesting  Isokind Pty Ltd (CMPL)
MPL1094  14ha  05/02/1947  05/02/2029  Current  MPL for water harvesting  Isokind Pty Ltd (CMPL)
EL5693  111 units  08/02/2000  07/02/2027  Current  EL (CSA Regional)  Isokind Pty Limited (CMPL)
EL5983  11 units  30/08/2002  30/06/2027  Current  EL wholly within EL5693  Isokind Pty Limited (CMPL)
EL6223  13 units  05/04/2004  05/04/2023  Current  EL (Shuttleton), JV with AuriCula  AuriCula Mines Pty Limited
EL6907  11 units  11/10/2007  11/10/2027  Current  EL (Mt Hope), JV with AuriCula  Actway Pty Limited (CMPL)
EL6140  24 units  22/10/2003  22/10/2023  Current  EL (Restdown) - royalty interest  Oxley Exploration Pty Ltd
EL6501  15 units  05/01/2006  01/01/2024  Current  EL (Restdown South) - royalty interest  Oxley Exploration Pty Ltd
EL6739  15 units  27/03/2007  27/03/2024  Current  EL (Horseshoe 2) - royalty interest  Oxley Exploration Pty Ltd
ELA6565  46 units  Pending  Pending  Pending  EL Application lodged 16/11/2022  CMPL

Notes: CML = Consolidated Mining Lease; MPL = Mining Purpose Lease; EL = Exploration Licence; ELA = Exploration Licence Application; ha = hectare; in NSW one EL map unit is one minute of latitude by one minute of longitude or approximately 3km2; both Isokind and Actway are wholly owned subsidiaries of Glencore and application has been made to transfer the Holder of these leases to CMPL

 

3.4.2Land Tenure

 

CML5 occupies portions of five Western Land Leases (Nos. 9565, 731, 13844, 3667, 13844) and Crown Land including parts of the Cobar Regeneration Belt. MPL1093 and MPL1094 occupy Crown Land.

 

3.4.3Native Title

 

The CSA mine lies within the traditional lands of the Ngemba/Ngiyampaa People. A Native Title claim by Ngemba, Ngiyampaa, Wangaaypuwan, and Wayilwan claimants was accepted for registration by the National Native Title Tribunal in April 2012 (NSD38/2019 and NC2012/001). This claim is relevant to the CSA mine operation in that it intersects exploration and mining tenements held by CMPL or its subsidiaries.

 

The claim has not yet been fully determined, but as of September 2021, it has been agreed by parties to the Federal Court proceedings that Native Title has been extinguished over some 89% of land parcels within the Native Title claim area, which includes Western Lands Lease areas. Native Title has been definitively extinguished over all land allotments lying within the boundary of CML5, but not the other EL’s, and once the Native Title claim has been determined, it is likely that that the several parties holding interests in the land (including the State of New South Wales and CMPL or its subsidiaries will enter into an Indigenous Land Use Agreement to guide the future use and management of land and water within the Native Title claim area that covers the EL’s.

 

3.4.4Joint Venture Interests

 

Joint Venture interests held by CSA are outlined for completeness, however, are not considered material for the purposes of this Report.

 

The ground within the Cobar Basin is tightly held with a number of active explorers. Operating and previously operating mines in the vicinity of CSA’s copper mine include the Endeavor lead-zinc mine (CBH Resources), Peak and Hera gold-copper mines (Aurelia Metals), and the Tritton copper mine (Aeris Resources) (Figure 2).

 

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As well as the tenements held directly by CSA (EL5693 and EL5983) which surround the CSA mine, CMPL has interests in tenements held in joint venture with AuriCula Mines Pty Limited (AuriCula). Until recently CMPL also had a joint venture interest in tenements held by Oxley Exploration Pty Limited (Oxley) (Figure 2), but these interests have now been converted to a royalty-only interest.

 

3.4.4.1AuriCula Joint Venture

 

3.4.4.2Shuttleton Joint Venture (EL6223)

 

The Shuttleton Joint Venture between CSA (90%) and AuriCula (10%), a wholly-owned subsidiary of International Base Metals Limited, covers EL6223 which is located approximately 75km south of Cobar and 30km west of Aurelia’s Hera Mine (Figure 2). The EL includes the historic workings of Crowl Creek and South Shuttleton which produced around 3,000t of copper in the 1900s at average grades of around 5% Cu. Recent exploration has included acquisition of airborne magnetic and radiometric data and completion of soil and auger geochemical sampling and reverse circulation (“RC”) and diamond drilling. Structural interpretations have identified NW trending structures intersecting N-S structures beneath shallow residual cover, with the intersections considered favourable for mineralisation. The geochemical surveys have also identified two anomalous zones coincident with favourable NW trending structures.

 

The Wirlong copper deposit lies just east of the Shuttleton tenement and is associated with the northwest oriented John Owen fault which also crosses the Shuttleton ground. The Mallee Bull copper-gold prospect lies 30km to the south. A systematic exploration programme to test the potential for base metal mineralisation is proposed for 2022.

 

Mt Hope Joint Venture (EL6907)

 

The Mt Hope JV tenements (Mt Hope North and Mt Hope South) lie approximately 130km south of Cobar (Figure 2) and include the historic Mt Hope and Great Central-Comet mines which produced around 10,600t of copper. Gold and silver mineralisation has been identified at Anomaly 3 south of the Great Central prospect. Limited drilling (4 RC holes and 9 diamond holes) has been undertaken. Electromagnetic and magnetic surveys and soil sampling have defined several anomalies warranting further follow up and an auger drilling campaign and further geochemical and geophysical surveys are proposed for 2022.

 

3.4.4.3Oxley Tenements (Former Joint Venture)

 

Restdown, Restdown South and Horseshoe Joint Venture (EL6140, EL6739 and EL6501)

 

The Restdown, Restdown South, and Horseshoe Oxley tenements comprise EL6140, EL6739 and EL6501 (Figure 2). Exploration activities are managed by Oxley, a wholly owned subsidiary of Helix Resources Limited (“Helix”) and Glencore has not been contributing to the exploration expenditure apart from annual rents and levies. The tenements contain a number of prospects with potential for low grade gold associated with the Restdown Anticline. Recent drill results indicate limited potential for economically mineable resources. CMPL has recently converted its former joint venture interest into a 1% NSR royalty-only interest.

 

3.4.5Water Rights

 

At present, CMPL holds an entitlement of 1,356 megalitres per annum (“MLpa”) of high security water under the Water Sharing Plan for the Macquarie and Cudgegong Regulated Rivers Water Source. These water licences are issued under the NSW Water Management Act 2000. However, during periods of serious drought, CMPL may not be able to access its full share of water under the water-sharing plan.

 

CMPL also holds groundwater entitlements. However, river water is preferred due to the levels of sulphates and the hardness of the ground water, which renders it unsuitable for use unless treated via reverse osmosis.

 

Two water storages that receive surface runoff from the catchments are located to the northwest of the mine; Old Mine Dam North and South under Mining Purpose Lease (MPL) MPL1093 and MPL1094 respectively.

 

A summary of CSA’s mine water licences is provided in Table 3.2

 

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Table 3.2

 

CSA Mine Water Licences

 

Licence Number  Source  Category  Allocation
WAL36335  Macquarie and Cudgegong Regulated Rivers Water Source  Regulated River – High Security  42.4 units
WAL36336  Macquarie and Cudgegong Regulated Rivers Water Source  Regulated River – High Security  813.6 units
WAL28539  Lachlan Fold Belt Groundwater Source  Aquifer  300 units
WAL28887  Lachlan Fold Belt Groundwater Source  Aquifer  210 units

 

3.4.6Royalties

 

3.4.6.1State Royalty

 

In NSW, most minerals are owned by the state. Under the Mining Act 1992, royalties are payable on extracted minerals and royalty payments jointly managed by Mining, Exploration and Geoscience within the Department of Regional NSW, and Revenue NSW. For copper and silver mined at the CSA mine, an ad valorem royalty is calculated as 4 per cent of the value of production less allowable deductions.

 

3.4.6.2Glencore 1.5% Cu NSR

 

As part of the sale consideration, MAC will enter into a copper Net Smelter Royalty (“NSR”) in favour of Glencore. This will be at rate of 1.5% for copper only based on the NSR received by CMPL for the life of the mine.

 

3.4.6.3Oxley Tenements (Former Joint Venture)

 

CMPL has recently converted its former Restdown, Restdown South and Horseshoe Joint Venture (EL6140, EL6739 and EL6501) interest into a 1% NSR royalty-only interest.

 

Please refer to 3.4.4.3 for further information.

 

3.4.7Encumbrances

 

The QPs are not aware of any material encumbrances that would impact the current resource or reserve disclosures as presented herein.

 

3.4.8Permitting and Development Consents

 

CSA operates under several authorisations including:

 

Development Consents authorised by the Cobar Shire Council (CSC), under referral from other government departments.

Landowner’s Consent authorised by NSW Department of Planning Infrastructure and Environment (“DPIE”)

Mine Tenements authorised by the NSW DPIE

Mine Operations Plan (“MOP”) authorised by the NSW Resources Regulator

Rehabilitation Management Plan (“RMP”) authorised by the NSW Resources Regulator

Environmental Protection Licence (EPL1864) authorised by the NSW Environmental Protection Agency (“EPA”)

Water Licences issued under the NSW Water Management Act 2000; responsibilities for authorising and managing water licences are shared between the Natural Resources Access Regulator (“NRAR”) and Water NSW; NRAR is responsible for compliance and enforcement of NSW Water Law including water access licence requirements.

NSW Western Lands Lease and Property Vegetation Plans authorised by the Western Catchment Authority under the NSW Crown Land Management Act 2016.

 

Mining projects in NSW (including expansions or modifications of existing projects) require development consent under the NSW Environmental Planning and Assessment Act 1979 (“EP&A Act”).

 

The earliest statutory development consent held by CMPL for the CSA mine is Local Development Consent No. 31/95 and Amendment 97/98:33 approved by CSC in 1995 and 1998 which permits use of the CSA mine site by CMPL. Subsequent expansions and amendments of mining development at CSA mine have all been assessed and administered by the CSC.

 

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3.4.8.1Mine Operations Plan (MOP)

 

Environmental aspects of mineral exploration and mining (including mine rehabilitation and closure) in New South Wales are administered under the NSW Mining Act 1992. A mine is required to prepare and implement a Mine Operations Plan (including a Mine Rehabilitation Plan) approved by the NSW Resources regulator. The most recent Mine Operations Plan for the CSA mine was submitted to the NSW government on 31 March 2021 and approved on 5 May 2021 and was valid to 31 December 2022.

 

Following the recent introduction of the Mining Amendment (Standard Conditions of Mining Leases – Rehabilitation) Regulation 2021, the MOP for large mines has been replaced by a targeted Rehabilitation Management Plan (“RMP”). The lease holder will provide annual reporting and scheduling of rehabilitation via an Annual Rehabilitation Report and forward programme. This will replace the current requirement for an Annual Environmental Management Report (“AEMR”).

 

The RMP has been submitted to the regulator and the mine continues to operate under the MOP while the regulator reviews the RMP application. The RMP is considered an improved process from the previous MOP though not expected to have any material change on CSA’s operations.

 

3.4.8.2Environmental Protection Licence

 

The Protection of the Environment Operations Act (“POEO Act”) is the statutory instrument through which certain specified activities are regulated by the NSW Environment Protection Authority (EPA). Activities are administered by means of Environment Protection Licences (“EPLs”) issued to operators of the premises on which the activities occur. CSA currently holds EPL1864 authorising mining of minerals to a maximum annual production capacity of 2Mtpa.

 

The most recent EPL was approved in 2017, with a new application lodged in August 2022. The Act requires licences to be reviewed at least every five years; accordingly, EPL1864 was due to be reviewed by the EPA by 30 June 2022, however this has not yet occurred and the onus is on the regulator to undertake the review. There are no required activities by CSA and given the historical operations of the mine and long-standing, regular interactions with the regulator, no material changes are expected to occur as a result of the review.

 

3.4.9Violations and Fines

 

The QP’s are not aware of any current material violations or fines imposed under the Regulations of the Mining Act 1992 that apply to the CSA mine.

 

3.5Significant Factors and Risks That May Affect Access, Title or Right to Perform Work

 

With relation to mining titles, the QP’s are not aware of any significant risks that may affect access, title, or the right or ability to perform work in relation to the CSA mine.

 

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4ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, PHYSIOGRAPHY

 

4.1Topography, Elevation and Vegetation

 

The CSA mine is approximately 260m above sea level and is located in an area of low undulating north-northwest (“NNW”) trending rises and is associated with a broad, prominent hill, Elouera Hill, which rises approximately 30m above the surrounding landscape. The mine lies close to the local drainage divide between the catchments of Sandy Creek in the southwest and Yanda Creek to the northeast.

 

The Cobar area has been impacted by mining and agricultural activities since the 1880s. The existing landscape surrounding the CSA mine is characterised by mining infrastructure, tailings storage facilities, shafts, disturbed grasslands and soil and rock stockpiles. The native vegetation of the area has been impacted by these activities with the historic removal of much of the native vegetation by clearing and over-grazing, resulting in erosion and extensive colonisation of the native vegetation. This has created a dense regrowth, referred to as ‘woody weeds’ or Invasive Native Species. The landscape has become highly modified and vulnerable to wind and water erosion, particularly those areas devoid of vegetation ground cover protection. The region surrounding the CSA mine is dominated by rangeland agriculture.

 

4.2Accessibility

 

The CSA mine is located 11km northwest of the town of Cobar, in western NSW, Australia (Figure 1), approximately 600km west-northwest of Sydney. The mine is accessed via sealed highways from Sydney to Cobar and sealed urban roads from Cobar to the mine site.

 

4.2.1Roads

 

Road access to the mine site from Sydney is via National Highway No. A32, the Barrier Highway, a high-quality rural highway to Cobar and from there to the mine site on sealed urban roads.

 

4.2.2Airstrip

 

Cobar is serviced by a sealed airstrip with commercial flights three times per week to and from Sydney.

 

4.2.3Rail

 

The site is serviced by a rail line (Figure 1) which allows transport of concentrate product to the Port of Newcastle for export. Concentrate is loaded into rail wagons at the site and railed to Newcastle along the NSW rail network. Railing to Port Kembla, south of Wollongong, is also an option.

 

4.3Climate

 

The climate of Cobar is semi-arid with evaporation typically exceeding rainfall by a ratio of 6:1. The mean annual rainfall for Cobar is approximately 400mm. During summer months, maximum temperatures typically range between 28-39ºC and during the winter months, maximum temperatures typically range between 13-20ºC. Minimum temperatures in the winter months typically range between 5-9ºC. Rainfall and temperature records have been recorded from May 1962 and evaporation from November 1967.

 

4.4Infrastructure

 

4.4.1Power Supply

 

Power supply to the site is via a 132kV transmission line from Essential Energy’s western NSW network. The Essential Energy network is supplied by a mix of conventional and renewable power generation, including the 102 megawatt (“MW”) and 132MW solar farms in the nearby towns of Nyngan and Nevertire. A 22kV line is also connected to the site from Cobar and is available for limited supply in emergencies. Further backup power is supplied by diesel power generators.

 

4.4.2Water Supply and Water Pipelines

 

The majority of water supply for the operation is provided by the Cobar Water Board from a weir on the Bogan River at Nyngan (Figure 1) through a network of pumps and pipelines. Additional water is available from tailings water recycling, surface water capture and a borefield installed in 2019. Water demand is around 3 megalitres per day (“ML/day”) in summer, with most water supplied by the Cobar Water Board system. The borefield has capacity for up to 1.3ML/day. The Cobar Water Board system is adequate to supply the operation up to around 1.2Mtpa; the borefield is only required during periods of drought or should a plant feed rate in excess of 1.2Mtpa be considered for extended periods.

 

Additional water can be secured by relacing the pipeline from the Cobar Water Board system to the mine site that currently has approximately 20% line losses.

 

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4.4.3Workforce Accommodation

 

The majority of the workforce is accommodated in Cobar with some senior staff employed on a fly in/fly out (“FIFO”) or drive in/drive out (“DIDO”) arrangement. No workforce accommodation is provided at the mine site.

 

4.4.4Site Buildings and Services

 

Site buildings comprise site offices, warehouses, and services buildings. Site services include power and water reticulation facilities, communications systems and fuel storage and dispensing facilities.

 

4.4.5Tailings Storage Facility

 

CSA mine currently operates one tailings storage facility, the South Tailings Storage Facility (“STSF”) (Figure 4), comprising the main STSF (approximately 63ha) and the STSF Extension (19ha). In 2010, the STSF was upgraded to alter the deposition method to a central depositional system. This method provides substantial water savings and will result in a final landform more amenable to rehabilitation. There will also be a reduction in the requirement for suitable material for tailings dam wall lifts and final capping; final topsoil requirements for rehabilitation will be lower than with the old multi-spigot perimeter depositional method and there will be an increase in tailings dam integrity as the resultant solids will contain less moisture.

 

After several lifts of the perimeter embankment, the current wall lift (Lift 9) is expected to have deposition capacity through to December 2024. One further wall lift (Lift 10) is scheduled and is expected to provide enough capacity for the Reserve life of mine.

 

To support potential mine life extension beyond the current Reserves, the existing STSF can support an additional lift (Lift 11) which would provide storage capacity until approximately 2032 (at a nominal 1.3 Mtpa production rate).

 

Tailings from the process plant flotation circuit are thickened in a high-rate thickener, and the underflow is sent to the paste fill plant or to the STSF. Supernatant water is collected in a dedicated decant dam for recycling to the process plant circuit.

 

The STSF appears to be well operated with no significant issues in relation to the facility’s integrity. CSA has commenced a study to install buttressing in specific areas on the STSF wall to improve the Factor of Safety (“FOS”) to the Post Seismic (Liquified Strength). The current early phase estimate to rectify the FOS is approximately A$5M and is expected to be completed in 2023.

 

The North Tailings Storage Facility (NTSF) (132.9ha) which lies adjacent to the northern boundary of the STSF, has been decommissioned and has been excised from the CSA Mine Lease (CML5); NTSF is owned by, and is the responsibility of, the New South Wales government.

 

BEHRE DOLBEAR

 

 

Metals Acquisition Corp. CSA Mine

 

Figure 4 MINE SITE LAYOUT PLAN
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SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
Behre Dolbear Australia Pty Ltd Page 35

 

5HISTORY

 

5.1Previous Operations

 

The CSA deposit was discovered in 1871 and named after the nationalities of its initial owners (a Cornishman, a Scotsman and an Australian). Development began in the early 1900s, but it was not until 1961 that a significant resource was proven up by Broken Hill South Pty Ltd. The site transitioned to an underground operation in 1965 with first underground production in 1967.

 

The mine was acquired by Conzinc Riotinto Australia Pty Ltd in 1980 and sold to Golden Shamrock Mines Pty Ltd (“GSM”) in 1993. GSM was subsequently acquired by Ashanti Gold Fields in the same year and the mine continued to operate until 1997, when the operation ran into financial difficulties and was placed in receivership.

 

The CSA mine was acquired by Glencore in 1999. Cobar Management Pty Limited (CMPL), a wholly owned Australian subsidiary of Glencore Operations Australia Pty Ltd, itself a wholly owned subsidiary of Glencore, is the direct owner and operator of the mine (and is the entity to be acquired by MAC). As part of its acquisition in 1999, Glencore received a number of concessions from the NSW government, whereby several components of the previous mining operations were excised from the mining lease such that no liability arising from these components transferred to CMPL. The excised components included the Northern Tailings Storage Facility (NTSF), a mine subsidence area and adjacent waste rock dumps.

 

Underground operations were resumed, and the mine has now operated under Glencore management for over 20 years.

 

5.2Recent Production History

 

CSA is one of Australia’s deepest underground mines, extending to 1.9km in depth and Australia’s highest grade copper operation. Mine production in 2022 totalled approximately 37kt of copper and 446ktoz of silver (“Ag”) in copper concentrates. Table 5.1 shows the historical production over the last six years.

 

Table 5.1

 

CSA Mine – Production History 2017-2022

 

Description  Unit  2017  2018  2019  2020  2021  2022 
Ore Mined
   

kt

   1,142   1,004   1,103   1,224   1,066   1,033 
Ore Grade   % Cu   4.98   4.57   4.01   3.78   3.70   3.68 
Waste Mined   kt   290   255   346   317   160   235 
Total Material Moved   kt   1,432   1,260   1,450   1,541   1,225   1,268 
Ore Milled   kt   1,100   1,002   1,105   1,224   1,062   1,033 
Milled Grade   % Cu   4.98   4.57   4.01   3.84   3.90   3.68 
Contained Copper   kt   54.8   49.5   44.2   46.9   41.4   38.0 
Copper Concentrate Tonnes   kt   211.4   171.6   162.9   172.2   157.3   144.4 
Copper Concentrate Grade   % Cu   25.3   26.1   26.7   26.8   25.8   25.8 
Copper Recovery to Conc.   % Cu   97.5   97.6   98.4   98.2   97.9   97.9 
Cu Production   kt   53.4   44.8   43.5   46.2   40.5   37.3 
Ag Production   ktoz   564   459   462   516   459   446 

 

5.3Historical Exploration

 

After the initial discovery in 1871 a further discovery of copper-rich ore occurred in 1905, however, a slump in metal prices and an underground fire led to the closure of the mine in 1920. Zinc Corp Ltd (through its subsidiary Enterprise Exploration) explored the area from 1947 to 1957 and commenced re-development work in 1952. Cobar Mines Pty Ltd was created in 1956, mining recommenced in 1962 and production commenced in 1965 from the Eastern (Cu-Zn) and Western (Pb-Zn-Ag) System lenses.

 

The QTS System was discovered in the mid-1970s with the QTS North lenses being main source of the copper ore at the time. Under the various owners of Conzinc Riotinto of Australia (CRA) in 1980, Golden Shamrock Mines (GSM) in 1993 and Glencore in 1999, ongoing periods of exploration occurred including geochemical and geophysical data acquisition, shallow RC drilling and deeper diamond drilling.

 

Extensive geochemical soil sampling was undertaken across CML5 in the mid-1970s, 1993 to 1995, and from 2006 to 2008. Pulps from these campaigns have been re-assayed for multi-elements with current laboratory methods in 2021.

 

 

BEHRE DOLBEAR

 

 

SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
Behre Dolbear Australia Pty Ltd Page 36

 

Geophysical surveys across CML5 include early two-dimensional induced polarisation (“2DIP,”,) ground magnetics and gravity, airborne electromagnetics (“EM”), and more recent Induced polarisation (“IP”) and resistivity; magnetotelluric (“MT”) data was acquired by Geophysical Resources and Services Pty Ltd (“GRS”) using the M.I.M Distributed Acquisition System (MIMDAS). Ongoing surveys include downhole electromagnetics (“DHEM”) of diamond drill holes and fixed loop EM (“FLEM”) surveys in 2021 and 2022. Refer to Section 7.3 for additional information on non-drilling related exploration.

 

The CSA deposit has been drilled using fully cored diamond drill holes drilled either from surface or underground, primarily using NQ size (47.6mm diameter core). The deposits have been defined by over 6,500 holes totalling approximately 900km of core, although data from many of the historical drill holes is not used for current resource estimation, being located in the upper mined out levels of the deposit. Drilling ranges from as far back as 1950 to the present; however, the bulk of the drilling contributing to resource estimation has been completed since 2000. The diamond holes for estimation prior to 2000 are located predominantly in the upper levels, and represent around 51% of drill metreage; diamond drilling post 2000 is focussed principally on the lower levels and represents approximately 49% of drill metres. The average drillhole depth is approximately 160m (surface and underground) with the maximum over 1,100m.

 

Relatively shallow RC drilling along strike of the mine to the north and south has delineated geochemically anomalous zones from prospects such as Spotted Leopard and Pink Panther south of the mine to prospects GSM and Kendi north of the mine, and Western Gossan and Block 19 immediately west of the mine.

 

Diamond drilling around the mine (such as at Western Gossan and QTS North), and at prospects such as Tailings Dam and Stoney Tank on the eastern side of CML5, has continued to intersect base metal mineralisation.

 

Table 5.2 summarizes the various types of surface and underground drilling conducted at CSA over the last ten years.

 

Table 5.2

 

Surface and Underground Drilling History

 

Drilling Type  2012    2013    2014    2015    2016    2017    2018    2019    2020    2021    2022    Total 
Diamond Drilling (Surface Exploration)  1,203   396   -   1,972   9,540   13,158   27,114   15,001   7,285   -   5,268   80,937 
RC Drilling (Surface Exploration)  705   -   -   -   -   19,533   13,343   2,188   1,935   -   -   37,704 
Infill/Extension/Upgrading (Underground)  13,602   18,439   15,020   9,991   12,864   17,592   23,706   13,023   23,832   22,151   26,645   196,863 
Exploration (Pure) (Underground)  896   -   578   -   -   -   692   -   300   -   -   2,466 
Geotechnical (UDT) (Underground)  4,944   -   1,654   3,470   617   2,867   625   1,475   1,723   253   -   17,628 
Infrastructure (UDS) (Underground)  452   1,085   265   597   -   1,130   -   -   37   889   761   5,217 
Total (Surface + Underground)  21,803   19,920   17,517   16,030   23,021   54,280   65,480   31,687   35,111   23,294   32,674   340,816 

 

 

BEHRE DOLBEAR

 

 

SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
Behre Dolbear Australia Pty Ltd Page 37

 

6GEOLOGICAL SETTING, MINERALISATION AND DEPOSIT

 

6.1Regional Geology and Mineral Deposits

 

The CSA mine has a long history of exploration and operations and the geology is well documented and generally well understood. The CSA deposit is located within the Cobar mineral field, in the Cobar Basin (Figure 5). Mineralisation is hosted in the Silurian-age CSA Siltstone, a member of the Amphitheatre Group of the Cobar Supergroup sequence of rocks and is associated with zones of deformation and shearing. The CSA Siltstone consists of a sequence of rhythmic bedded siltstones and sandstones. The rock sequence was structurally deformed during the development of the Cobar Basin in the early Devonian period.

 

The Cobar mineral field is a mineralised belt 80km north-south and up to 40km wide, containing copper, gold, and lead-zinc mineralisation along the eastern margin of the Cobar Basin, one of many north-south grabens that developed in the Lachlan Fold Belt (“LFB”) during the Siluro-Devonian period. The LFB is a complex orogenic belt which developed at the margins of an evolving tectonic plate. Regional crustal extension of the LFB in the late Silurian created a series of north-south trending deep water basins and troughs that, in the Cobar region, included the Cobar Basin and further south the Raast and Mt Hope Troughs. The Cobar Basin is fault bounded on all sides and studies indicate that reactivation of the faults played a significant role in providing fluid pathways for mineralising fluids and dilational zones for the formation of the mineral deposits.

 

Rocks of volcanic derivation are rare, and igneous intrusions are limited to a few small porphyritic bodies at the southern extremity of the field. Rocks in the Cobar Basin have undergone low grade regional metamorphism to lower greenschist facies.

 

The Cobar Basin is a well-endowed metalliferous province with a diverse range of, predominantly sediment- hosted, mineral deposits. Most of the known deposits are located adjacent to the eastern, fault-controlled, basin margin. Significant deposits from north to south include the Endeavor silver-lead-zinc deposit, the CSA copper deposit, The Peak, Perseverance, New Occidental and New Cobar gold-copper deposits, the Nymagee copper- lead-zinc deposit, the Hera gold-copper-lead-zinc deposit, and the Mineral Hill gold-copper deposit.

 

The known mineral deposits are all structurally controlled and typically occur as narrow, short strike length pipes, lenses and veins (ie. a small surface area) but are notable for their considerable vertical extent. The location of the deposits along or adjacent to the basin margin Rookery Fault and sub-parallel faults suggests migration of fluids from basement sources up the basin margin fault.

 

6.1.1Stratigraphy

 

The principal operating mines in the area are CSA (Cu with minor Pb/Zn), Endeavor (Pb/Zn/Ag), The Peak (Au/Cu), Hera (Au/Cu), and Tritton (Cu) (Figure 1 and Figure 2). The deposits of the Cobar field occur exclusively within the Nurri and Amphitheatre Groups of the Cobar Supergroup (see Table 6.1). The Nurri Group unconformably overlies, and is in faulted contact with, basement rocks of the Cambro-Ordovician Girilambone Group, along the eastern margin of the Cobar Basin. The Nurri Group comprises the basal Chesney Formation, consisting of a thick turbidite sequence with a coarse basal conglomerate, and the Great Cobar Slate, consisting predominantly of mudstones, siltstones, and fine-grained sandstones. South of Cobar, the contact between the Chesney Formation and the Great Cobar Slate is locally faulted, and this contact hosts a number of gold deposits in a series of en-echelon sub-vertical shears.

 

The Amphitheatre Group, a deeper water facies to the west, partially interfingers with, and partially overlies, the Nurri Group. At the base of the Amphitheatre Group is the CSA Siltstone, which consists of a thinly bedded turbiditic sequence of carbonaceous siltstones and mudstones with fine-grained sandstones. The CSA Siltstone is the only unit of known economic significance within the Amphitheatre Group and hosts the CSA and Endeavor mineralisation. 

 

 

BEHRE DOLBEAR

 

 

Metals Acquisition Corp. CSA Mine

 

Figure 5 COBAR REGIONAL GEOLOGY
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SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
Behre Dolbear Australia Pty Ltd Page 39

 

Table 6.1

 

Cobar Stratigraphic Column

 

Group   Formation   Age   Description

Cobar Supergroup 

 

 

 

Siluro-Devonian 

   
             
Winduck Group           Shallow marine shelf deposits
             
Amphitheatre Group  

Upper Amphitheatre Group

 

Biddibirra Formation 

 

CSA Siltstone

      Turbidites, shales, siltstones, sandstones; CSA Siltstone is host to base metal mineralisation at CSA mine and Endeavour mine
             
Nurri Group   Great Cobar Slate Chesney Formation       Turbidites, conglomerates, mudstone, siltstone, sandstone; host to gold mineralisation at The Peak, New Occidental and New Cobar
             
Kopyje Group           Shallow marine shelf deposits and minor volcanics, predominantly along the eastern margin of the Cobar trough
             
Girilambone Group       Cambro-Ordovician   Turbidite sequence with minor volcanics, deformed and metamorphosed; Silurian granitoid intrusions

Note: marked unconformity between Cambro-Ordovician and Silurian sediments

 

 

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6.2Local and Property Geology

 

The CSA mineralisation occurs in five known systems: Eastern, Western, QTS North (QTSN), QTS Central (QTSC) and QTS South (QTSS) (Figures 3 and 6). The mineralisation is structurally controlled, associated with fault/shear zones and arranged in an en-echelon pattern. The Cobar Fault and the Chesney Fault are the major controlling faults at the CSA mine. The mineralised systems occur at the intersections of two sets of steeply dipping (~85°) structures, a dominant north-northeast (“NNE”) trending set (S1) and a NNW trending set (S2). These two structural trends formed due to east-west compression leading to a complex fault/shear system with dilation zones (S3) at intersections. The NNE shears can be up to 100m wide and contain parallel quartz veining of variable intensity.

 

Within the five mineralised systems, multiple lenses of mineralisation occur; lenses typically are 5-30m wide, have short (<300m) strike lengths but long vertical continuity down plunge (>1,000m). The lenses are interpreted by CMPL as discrete parallel to sub-parallel stacked lenses (Figure 6).

 

The host rock for the mineralisation, the CSA Siltstone, contains thinly bedded siltstones and mudstones with fine to medium grained sandstones. Bedding strikes north-northwest and dips steeply west. Cleavage trends north and dips steeply east.

 

QTSN is developed from 600m below surface and is the main mineralised system at CSA, currently containing around 65% of the total copper metal in the estimated Mineral Resource and accounting for approximately 80% of current production tonnes. QTSN consists of around 30 separate lenses which trend north-south and extend down plunge from 600m to >2,000m. To date, the deepest mineralised intercept at QTSN is at around 8,050m Relative Level (“RL”), 2,200m below surface with surface at 10,250mRL. The main lenses consist of semi- massive to massive chalcopyrite bounded to the north and south by zones of chalcopyrite and quartz veining.

 

QTSC was discovered in 2014; it is located 300m south of QTSN and is developed from a depth of around 1,200m below surface (Figure 6). The system consists of two principal lenses with strike lengths of 150m and widths of 10m.

 

QTSS is located approximately 200m south of QTSC at a depth of around 700m below surface. QTSS is essentially mined out except for the QR1 lens which was discovered in 2005. This lens lies below and to the south of the mined-out area and has a down plunge extent in excess of 400m, a strike length of 90m and a maximum width of 15m. The mineralisation consists of a zone of quartz-chalcopyrite-chlorite veining.

 

The Eastern system is located 100m west of QTSN, starting at 250m below surface and consisting of two principal lenses with strike lengths of 50-80m and widths of 10m. Copper mineralisation occurs as quartz-sulphide veining in chlorite-altered siltstone, with occasional pods of massive sulphide.

 

The Western system outcrops at surface and approximately the upper 100m of the sulphide mineralisation has been oxidised. The system is hosted in pervasively silicified and chloritised siltstone. Mineralisation occurs as zones of quartz-sulphide veining with a number of small high-grade pods of copper or lead-zinc. The lead-zinc mineralisation is concentrated in the upper portion of the system with copper dominant at depth. There are four narrow, copper-rich lenses which have a strike length of around 45m, an average width of 7m and extend down plunge up to 200m.

 

6.2.1Mineralization and Alteration

 

Chalcopyrite (CuFeS2) is the dominant copper sulphide phase in all five systems. Copper mineralisation occurs in three distinct forms: as massive sulphide with dominant chalcopyrite and minor pyrrhotite (iron sulphide) and cubanite (CuFe2S3), as semi-massive sulphide with either quartz or chlorite alteration and associated with quartz- sulphide veining of variable intensity. Massive sulphide contacts can be sharp, but the majority of mineralised lenses have gradational contacts with a mineralisation envelope occurring around the more massive mineralisation.

 

Cubanite is present as a minor copper species, mainly in QTSC. Sphalerite (zinc sulphide) and galena (lead sulphide) are also present but principally only in the upper part of the Western system which is the only system of the five that is exposed at surface. There are no lead-zinc lenses included in the CSA resources or the Cube re- stated Mineral Resource. Silver (Ag), grading 10-50 grams per tonne (“g/t”) is present as acanthite (Ag2S) and shows a weak to moderate correlation with copper. Good metallurgical recoveries are achieved and a high-quality copper concentrate produced grading around 26-27% Cu with silver credits.

 

 

BEHRE DOLBEAR

 

 

Metals Acquisition Corp. CSA Mine

 

Figure 6 GEOLOGY SECTION PROJECTION - LOOKING NORTH
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SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
Behre Dolbear Australia Pty Ltd Page 42

 

7EXPLORATION

 

7.1Summary of Exploration

 

7.2Historical and Current Drilling

 

The CSA deposit was discovered in 1871 with a further discovery of copper-rich mineralization in 1905, however, a slump in metal prices and an underground fire led to the closure of the mine in 1920. Zinc Corp Ltd (through its subsidiary Enterprise Exploration) explored the area from 1947 to 1957 and commenced re-development work in 1952. Cobar Mines Pty Ltd was created in 1956, mining recommenced in 1962 and production commenced in 1965 from the Eastern (Cu-Zn) and Western (Pb-Zn-Ag) System lenses.

 

The QTS System was discovered in the mid-1970s with the QTS North lenses being main source of the copper ore. CMPL came under the ownership of Conzinc Riotinto of Australia (CRA) in 1980, Golden Shamrock Mines (GSM) in 1993 and Glencore in 1999. During this time, there have been ongoing periods of geochemical and geophysical data acquisition, shallow RC drilling and deeper diamond drilling.

 

Extensive geochemical soil sampling was undertaken across CML5 in the mid-1970s, 1993 to 1995, and from 2006 to 2008. Pulps from these campaigns have been re-assayed for multi-elements with current laboratory methods in 2021.

 

Geophysical surveys across CML5 include early 2DIP, ground magnetics and gravity, airborne EM, more recent IP/MT (MIMDAS), ongoing DHEM of diamond drill holes and fixed loop EM (FLEM) in 2021 and 2022.

 

Relatively shallow RC drilling along strike of the mine to the north and south has further delineated geochemically anomalous zones from prospects such as Spotted Leopard and Pink Panther south of the mine to prospects GSM and Kendi north of the mine, and Western Gossan and Block 19 immediately west of the mine. (Figure 7).

 

Diamond drilling around the mine (such as at Western Gossan and QTS North), and at prospects such as Tailings Dam and Stoney Tank on the eastern side of CML5, has continued to intersect base metal mineralisation.

 

The CSA deposit has been drilled using fully cored diamond drill holes drilled either from surface or underground, primarily using NQ size (47.6mm diameter core). The deposits have been defined by over 6,500 holes totalling approximately 900km of core, although data from many of the historical drill holes is not used for current resource estimation, being located in the upper mined out levels of the deposit; current resource estimates are based on approximately 3,900 drill holes and more than 39,000 samples. Underground diamond drilling over the last five years has averaged 22,000m per year, with rates of 24-25,000m per year achieved over the last two years.

 

7.3Exploration – Non-Drilling

 

7.3.1Geophysical Surveys

 

7.3.1.12001 Hoistem Survey

 

In 2001, the entire extent of CML5 was included within a much more extensive ‘HOISTEM’ survey, which covered ~70% of surrounding tenement EL5693, for a total of 1,874line-km; the survey was carried out under the direction of consultant geophysicist Steve Collins whose report on the results forms the basis of the comments below. The Normandy HOISTEM helicopter-borne electromagnetic (EM) system comprised a single wire 20m diameter transmitter loop with a centrally mounted receiver slung beneath a helicopter, as such the system is symmetric with respect to flight direction. Survey parameters comprised 100m spaced east-west lines flown with a nominal detector terrain clearance of 30m. The receiver recorded 112 channels of off-time decay signal each of which is 112.7 microseconds in duration. The measured decay signals were binned into 10 groups.

 

At the time of this survey, the Hoistem system was still in development. A change was made to the electronics of the system half-way through this survey, resulting in significantly lower noise levels which are apparent in images of the data for the later time groups. The contractor carried out standard processing to remove bird swing and system self-response, but grouped results were found to still contain some system noise which manifested itself as a corrugation in the presentation images. The data were passed through a decorrugation micro levelling process to produce shaded enhanced images for interpretation.

 

 

BEHRE DOLBEAR

 

 

Metals Acquisition Corp. CSA Mine

 

Figure 7 NEAR MINE EXPLORATION TARGETS
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SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
Behre Dolbear Australia Pty Ltd Page 44

 

In 2019, the Government of NSW and Geoscience Australia flew an Xcite Airborne Electromagnetic (“AEM”) survey at a height of 60m, with the sensor suspended 30m below, along 116 east–west lines. The lines were typically about 55km long and between 2.5km and 5km apart. A total of 9-lines of the 2019 Xcite AEM survey covered the area of the 2001 Hoistem; comparison showed the 2001 Hoistem and high quality 2019 AEM data agree well in the early EM channels (0.4-1.2ms). This upgraded the reliability and usefulness of the 2001 Hoistem AEM data and has been reliably used to identify and interpret geophysical signatures that might be associated with prospective structures and enhanced weathering due to sulphides at depth or lithological variations.

 

7.3.1.22005 Mopone IP-Resistivity Survey

 

The eastern section of CML5 covers part of an extensive offset pole-dipole IP-resistivity survey undertaken by Search Exploration Services Pty Ltd in March 2005 under the direction of consultant geophysicist Steve Collins. The offset pole-dipole array comprises a central line of 100m transmitter electrodes (each in turn connected to a single remote electrode) with a parallel line of receiver dipoles on either side. Line spacing for this survey was 200m; transmitter electrode spacing and receiver dipole size was 100m. The data was processed to 3D inversions on completion of the survey, but degraded by the effects of receiver cabling problems, not all of which could be resolved. The data were further processed to 2D IP and resistivity offset inversion sections in-house in 2020; some, but not all of the data problems were resolved. These inversions were converted to a format suitable for importation into a 3D LeapFrog geological model.

 

The Mopone magnetic anomaly coincides with a resistive zone at depth; no significant IP anomalism was noted. The configuration of the offset pole-dipole array means that the shallowest sections of the area could not be resolved in any detail.

 

7.3.1.32006 – 2007 MIMDAS Survey

 

Following a successful trial of 3D MIMDAS in early 2006, 2D MIMDAS surveys were conducted to the north and south of the CSA Mine; principally targeting the Cobar Fault. IP, resistivity and MT data were acquired by Geophysical Resources and Services Pty Ltd between the 4th of December 2006 and 14 November 2007 using the M.I.M Distributed Acquisition System (“MIMDAS”). Approximately 22 line km of these surveys were within CML5. A “standard” 2D MIMDAS pole-dipole/ dipole-pole IP configuration was used with dipole spacing 100m and line spacing 400m. Initial inversion modelling of data from the North Block has been completed with good indication of structure, although often poorly resolved.

 

MIMDAS IP and MT Data from the CSA Mine was inverted to return possible causative models. It is believed that the MIMDAS survey has detected the ore package with the DC Resistivity and MT methods. The technique as implemented at CSA would seem to be able to locate any similar deposit in a similar geological regime to approximately 500m depth. If the survey area was centred over the know system proper, it is anticipated that resolution of individual conductors might have been gleaned from the Inversion results. The data, particularly the chargeability data, although of very good quality in a repeatability sense, has proven difficult to interpret due to contamination from EM effects. The ore packages to the south of the survey area are most likely responsible for this contamination. However, with the EM signature being so unique, it may be able to be used in a comparative exploration sense. Less conductive deposits would lend themselves to detection by the induced polarisation method as EM effects would not dominate the secondary voltage decays as has been the case at CSA. A resistivity anomaly occurring on the south-eastern limits of the survey area has been detected and noted.

 

7.3.1.42012 – 2019 Ground Gravity

 

CMPL commissioned Precision Exploration Services between 2012 – 2019 to collect ground gravity data across CML5 and over the Cobar and Chesney Faults on EL5693. Gravity data was collected using a Lacoste & Romberg Model “G” gravity meter, on 100m x 100m grids, with 50m x 50m grid infills to the north and south of the CSA Mine and over the Mopone prospect on the eastern margin of CML5. The gravity data has proved useful for mapping structures, particularly NNE and NNW crosscutting structures, which have a controlling factor on mineralisation at the CSA Mine.

 

Between the 1970 – 1990 Cobar Mines and CRAE collected ground gravity data using a Lacoste and Romberg (L & R) Model G Land Gravity Meter with data collected every 30m-50m along east-west lines 300m-400m apart, plus infill stations across CML5 and surrounding tenement EL5983. MIM Geophysicist, Terry Harvey, reprocessed the 1970 – 1990 and recent CMPL gravity data to produce composite products,

 

 

BEHRE DOLBEAR

 

 

SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
Behre Dolbear Australia Pty Ltd Page 45

 

7.3.1.52020 Airborne Magnetics and Radiometrics

 

Thomson Aviation Pty Ltd were engaged to undertake an Airborne Magnetics and Radiometrics (“AMR”) survey covering EL5693, which encompasses CML5. The survey was completed on 50m spaced east-west orientated lines, with 500m spaced north-south tie lines, at a nominal survey height (terrain clearance) of 35m. Survey equipment specifications are summarised below:

 

The survey provided agreement with previously mapped regional structures, will deliver increased structural understanding of the region surrounding CML5 and will form a basis for future planning of exploration programs.

 

7.3.1.6       2021-2022 FLEM

 

Gap Geophysics Australia Pty Ltd (“GAP”) were commissioned to conduct a Fixed-Loop Electromagnetic Survey (“FLEM”) encompassing the CSA mine between May 2021 and February 2022. The survey employed one of GAP’s high-power EM systems which consisted of a GeoPak HPTX-70 or HPTX-80 transmitter and two setups of an EMIT SMARTem24 receiver coupled with a 3-component Supracon High-temperature Super-conducting Quantum Interference Device (“SQUID”) sensor. The survey consisted of 24 loops (~1200m x 900m), 50m east- west spaced stations on 100m north-south spaced lines, for approximately 11-lines per loop, in total the survey covered approximately 26km2 of highly prospective ground encompassing the CSA mine and along strike.

 

The survey was a technical success in its ability to detect previously known mineralisation at Pink Panther, located 1km to the south of CSA. Subtle FLEM anomalies have been detected north along strike of CSA that coincide with geochemical anomalism suggestive of QTS-style sulphide mineralisation at depth; these anomalies will be targeted in the 2023 Diamond Drilling Campaign.

 

7.3.2DHEM

 

Down-hole Electromagnetic surveys (DHEM) are a proven to be an effective method for detecting Cobar-style mineralisation, since 2016 DHEM surveys are conducted on completion of diamond drilling campaigns. DHEM surveys post 2000 have been undertaken by Outer Rim Exploration Services Pty Ltd, GEM Geophysical Surveys Pty Ltd and Gap Geophysics Australia Pty Ltd, all data is available and of moderate to very good quality. Summary of recent DHEM surveys follow.

 

7.3.2.12018 CSA Mine DHEM Survey

 

Downhole Electromagnetic (DHEM) surveys were completed in August 2018 by Gap Geophysics Australia Pty Limited (GAP), a total of 10,490m was logged on fourteen drillholes over five near-mine prospects (Kendi, Pink Panther, Spotted Leopard, QTS North and QTS South. The survey utilised a Digi Atlantis DHEM sensor, Smartem receiver and Gap Geopak HPTX-802 transmitter. The EM responses along three mutually orthogonal vectors (A, U, V) were measured by the down-hole probe.

 

The DHEM surveys have produced fair to good quality data. A total of fourteen holes were surveyed with DHEM with six holes containing anomalies, three of which being off-hole anomalies at the QTS North prospect that warranted drill testing. The conductors modelled at the QTS North prospect are being diamond drill tested in early 2023.

 

7.3.2.22020 QTS South DHEM Survey

 

Down-hole electromagnetic (DHEM) surveying of nineteen holes at the QTS South (upper) deposit and one historic hole (DDHSL7) at the Pink Panther prospect were carried out by Gem Geophysics in September 2020. The survey utilised a Digi Atlantis DHEM sensor, Smartem receiver and Geonics TT100 transmitter. The EM responses along three mutually orthogonal vectors (A, U, V) were measured by the down-hole probe. A total of 9,935m was surveyed at a station interval ranging from 2.5m-15m. The surveys were designed to test for off-hole conductive mineralisation and for extensions to the known chalcopyrite mineralisation.

 

The DHEM surveys have produced fair to good quality data. The DHEM data collected from within and close to the known mineralisation is consistent with the results from the 2018 DHEM surveys. A total of twenty holes were surveyed with DHEM and seven of these holes contained anomalies that warranted modelling. Data returned from seven holes contained anomalous electromagnetic (EM) responses that warranted modelling. Six of these EM responses were modelled at QTS South Upper deposit and provided small southern extensions to the mineralisation or occur in zones indicating greatest grade or thickest intervals, however current drilling closes these zones, no further drilling is currently warranted. Modelled conductors from drillhole QSDD040 returned a relatively high modelled conductance and could represent mineralisation immediately south and east of the QTS South ore body, these conductors will be drill tested in 2023.

 

 

BEHRE DOLBEAR

 

 

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7.3.3Geological Mapping

 

7.3.4Geochemistry

 

Throughout the early 1970s, , Rotary Air Blast (“RAB”) geochemical campaigns were conducted over CML5 and the surrounding tenement EL5693. The programs were typically conducted on 30m spaced east-west by 300m spaced north-south grids, with infill lines at 150m north-south spacing. The 1970 campaigns proved successful in identifying geochemically anomalous areas within CML5 such as the GSM, Stoney Tank, Falcon, Block 19 and QTS South to Spotted Leopard trend. Other than the QTS South to Spotted Leopard trend, the remaining prospects have received minimal attention and exploration since being identified.

 

Between 2003 – 2007, CMPL undertook power auger geochemical surveys on 50m x 50m sample grids in the near-mine area and 100m x 100m grids on regional prospects within CML5. In total 2,032 power auger samples were collected by CMPL and analysed by ME-MS43i (Three Acid Digest) for 21 elements, with eastern CML5 pulps having been re-assayed in 2021 -2022 by ME-MS61 (Four Acid Digest) for 48 elements plus Au by fire assay. The anomalies identified in the 1970s geochemical campaigns correlate well with early 2000 geochemical surveys; the multi-element data has proved useful in delineating new mineralization on CML5. Base metal mineralisation within the Cobar region typically has geochemical haloes that extend less than 100m in residual soils. Soil sampling conducted around the CSA Mine shows a weak and sporadic Cu anomaly 100ppm – 550ppm and a more consistent Pb anomaly 100ppm – 2960ppm, which extends to a maximum of 200-250m from mineralisation, most notably around the Western Gossan. The 2023 diamond drilling campaign has been designed to target high priority geochemical anomalies adjacent to regional scale structures and in zones of structural complexity highlighted from the 2020 AMR survey. Geochemical surveys have proved highly successful in the Cobar Basin at detecting blind ore bodies.

 

7.4Exploration – Drilling

 

The CSA deposit has been drilled using fully cored diamond drill holes drilled either from surface or underground, primarily using NQ size (47.6mm diameter core). The deposits have been defined by over 6,500 holes totalling approximately 900km of core, although data from many of the historical drill holes is not used for current resource estimation, being located in the upper mined out levels of the deposit; current resource estimates are based on approximately 3,900 drill holes and more than 39,000 samples (Figure 8). Underground diamond drilling over the last five years has averaged 22,000m per year, with rates of 24-25,000m per year achieved over the last two years. (Figure 9).

 

Resource definition drilling in active mining areas at QTSN is carried out with a drill hole spacing of around 20m north-south by 37.5m vertical. At QTSC, QTSS, Western and Eastern mineralised systems, drill hole spacing is nominally 20m north-south by 20m vertical due to the narrower mineralised lenses. Wider drill hole spacing is used in exploration areas.

 

The mineralised host rocks are generally very competent below the weathered zone and core recovery averages above 95%. All CSA drill holes are systematically surveyed (drill collars and down hole) and geologically and geotechnically logged and photographed. Drill hole logging includes recording lithology, structures, weathering, alteration, and rock quality designation (“RQD”). Drill core is nominally sampled at one metre intervals, while honouring lithological contacts. Half-core samples are sent for sample preparation and assaying.

 

7.4.1Surface Drilling

 

The current database of surface drilling lists some 412 RC drill holes totalling 52,818m with an average depth of around 128m. RC holes have generally been drilled to 120m to 150m depth, being just past the weathered zone and into fresh rock, although some RC holes have been drilled to as deep as 250m.

 

Historically, some 18 shallow RC holes were drilled in 1984 (under CRA ownership) into Block 19 which is a NNW base metal (Pb-dominant) trend from the CSA mine. A further 43 RC holes were drilled into Spotted Leopard (a southern prospect in CML5 along strike of mine) in 1990-91.

 

There are also records for some 255 surface exploration diamond drill holes within CML5 totalling around 150,960m for an average hole depth of 592m. These include historical (pre-Glencore) holes up to the current diamond drill program that commenced in mid-2022.

 

Diamond drill holes have been drilled on a range of prospects including Western Gossan and Block 19 (west of mine), GSM/Kendi (north of mine), Pink Panther and Spotted Leopard (south of mine) as well as targeting extensions to the QTS North, South and Central mine systems.

 

As the Mineral Resources and Mineral Reserves presented in this report lie within CML5, exploration activities on the remaining exploration tenements are largely excluded from this Report.

 

 

BEHRE DOLBEAR

 

 

Metals Acquisition Corp. CSA Mine

 

Figure 8 SURFACE EXPLORATION DRILL COLLAR LOCATIONS
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Metals Acquisition Corp. CSA Mine

 

Figure 9 HISTORICAL EXPLORATION DRILLING - LONG SECTION
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7.4.1.1Historical Drilling Campaigns 2000 – 2016

 

Surface diamond holes drilled within CML5 from 2000-2016 include:

 

2003 – 2 holes at Tailings Dam

 

2004 – 2 holes into the QTS System

 

2005 – 1 hole near mine northeast, 7 holes at Tailings Dam

 

2006 – 3 holes testing the QTS System, 3 holes at Tailings Dam

 

2007 – 1 hole near mine northeast, 1 hole at Pink Panther and 1hole at Tailings Dam

 

2008 – 1 hole testing 1993 holes at GSM anomaly, 1 hole near mine south

 

2009 - no holes identified as being drilled this year

 

2010 – 2 holes in Western Gossan

 

2011 – 2 holes testing mineralisation in CM30 at Western Gossan, 1 hole near mine south, 1 hole at Pink Panther

 

2012 – 1 hole near mine south

 

2015 – 3 holes at Pink Panther

 

2016 – Some 7,500 m at Pink Panther.

 

Surface exploration diamond drilling during this period was relatively minimal until copper intersections and DHEM anomalies at Pink Panther resulted in increased drilling in 2016.

 

7.4.1.22017 – 2020 Near-mine Reverse Circulation Drilling

 

A substantial amount of the total near-mine RC drilling occurred in the 2017 to 2018 period, with some additional holes in 2019 and 2020.

 

A small subset of RC drilling, including 17 holes in 2010, 6 holes in 2018 and 1 hole in 2020, have been drilled for the purpose of establishing water bores. A further nine holes are currently (February 2023) being drilled south and east of the tailings dam. The water bore holes are also sampled and assayed.

 

Over the course of 2017 to 2018 a significant number of holes were drilled including:

 

65 at Kendi (along strike of QTS North)

 

62 at Spotted Leopard

 

58 at Pink Panther (south of QTS South)

 

32 at QTS North

 

18 at QTS South

 

12 at Western Gossan.

 

In 2019, a further 17 holes were drilled at QTS South and 8 holes were drilled at QTS Central in 2020.

 

In general, the multi-element geochemistry from the RC drilling confirmed the strength of the geochemical anomaly along the eastern side of the mine corresponding to QTS-style (chalcopyrite) mineralisation. These results provide additional support for the plan to progress further exploration diamond drilling on the eastern side of the known QTS North lenses.

 

7.4.1.32017 – 2020 Diamond Drilling Campaigns

 

Interest in Pink Panther and QTS South continued with some 11,091m of diamond drilling in 2017.

 

In 2018, a total of 24,107m of diamond drilling tested mineralization at QTS South, QTS North, Kendi, Spotted Leopard and Western Gossan.

 

In 2019 some diamond drilling was undertaken at QTS North, however the major emphasis of the 2019 programme was the delineation of Inferred resources at QTS South (discussed below).

 

7.4.1.42022 – 2023 Diamond Drilling Campaign

 

The 2022 campaign, consisting of 11 holes, was based on modelling from the 2015 DHEM surveys of previous drill holes and targeted the QTS North, QTS South and Western Gossan areas. Drilling continued at QTS North from January 2023.

 

 

BEHRE DOLBEAR

 

 

SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
Behre Dolbear Australia Pty Ltd Page 50

 

Western Gossan lies immediately west of the historical Western System. DHEM data from holes CM50 (drilled in 1993 under Golden Shamrock Mines ownership) and SRDD11002 (drilled in 2011) produced two strong conductors that aligned with significant mineralisation in some historical drill holes (circa 1958).

 

Five holes drilled in 2022 (3,771m) intersected two zones of massive sulphide mineralisation with significant sphalerite and lesser galena and chalcopyrite. The zones matched the modelled conductors; these holes were surveyed in January 2023 by DHEM and assay results are currently awaited.

 

The QTS North and South drill targets were based on DHEM data from holes drilled in 2018-19. Two modelled conductors aligned with mineralisation in nearby holes. As of early February 2023, three holes had been completed and intersected chalcopyrite mineralisation within Fe-chlorite alteration near the modelled conductors. Assays have not yet been received. A fourth hole is due to commence drilled in February 2023.

 

Two holes at QTS South are due to be drilled in March-April 2023. Modelling from DHEM surveying in 2020 on some 19 DDHs indicated three potential conductors.

 

7.5Underground Drilling

 

Underground drilling is directed at extending and defining mineralisation below the current working levels in order to define reserves ahead of mining (Figure 10). During the year some holes may be drilled for purely exploration purposes and some of the resource definition holes may be extended to test nearby mineralization. The aim of these drilling programs is to replace, as a minimum, the Reserve material extracted each year.

 

As shown in Figure 10, in conjunction with continuous copper production over the past 10 years, CSA has successfully maintained replenishment of Mineral Resources each year.

 

In addition to resource and exploration drilling as described above, drilling is also completed for geotechnical purposes ahead of mine infrastructure programs (e.g. vent rises) and for other mine infrastructure such as paste fill, electrical and water supply. All holes are geologically logged and sampled as required. Selected holes are geotechnically logged as coverage requires.

 

At the end of 2022 there were approximately 3,500 diamond holes and 46,000 samples contributing to the CSA Mineral Resource with hole information dating as far back as 1950.

 

7.6Geotechnical Data

 

Geotechnical core logging of RQD and Q Prime parameters is undertaken for all drilling and has been collected for over 20 years; this together with the detailed geology mapping completed on all development levels forms an excellent basis for assessing the ground conditions at the mine.

 

All CSA diamond drill core is comprehensively logged including the recording of:

 

geology, mineralization and alteration

 

core recovery

 

RQD.

 

In addition, drill core logged specifically for geotechnical assessment is logged for:

 

rock strength

 

number of joint sets or fractures including:

 

type of structure

 

roughness

 

shape

 

infill minerals

 

alpha and beta angles (if core has been oriented)

 

Orientation quality (if core has been oriented).

 

 

BEHRE DOLBEAR

 

 

 

 

Metals Acquisition Corp. CSA Mine

 

Figure 10 LONG SECTION CSA LODES - POTENTIAL MINE LIFE EXTENSION
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Metals Acquisition Corp. CSA Mine

 

Figure 11 HISTORICAL RESOURCES vs PRODUCTION
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This geotechnical information is stored in the drillhole database. All core is photographed before being cut for sampling.

 

Underground development mapping (face and backs) is undertaken to delineate lithology, mineralisation, alteration, significant structures and geotechnical features of significance. The underground mapping allows for the preparation of detailed geological/geotechnical level plans, that are available for geotechnical analysis and stope planning.

 

The quantity and quality of the geological and geotechnical information collected is sufficient to describe the physical characteristics of the rock mass and major structures, and to classify the rock mass using industry standards for sublevel open stoping mines.

 

7.7Hydrological Data

 

The CSA mine is a dry mine with little water inflow other than that introduced by mine fill and service water. No hydrological drilling or ground water monitoring is required other than recording the pumped volumes from the mine dewatering system.

 

7.8Qualified Person’s Opinion on Exploration Interpretations

 

The QPs consider the drilling and exploration programmes completed at CSA to be appropriate for near-mine exploration and resource replacement. In-fill drilling is undertaken at an appropriate rate to allow the steady conversion of resources to reserves as required and to provide the necessary information for detailed mine planning.

 

Geotechnical parameters are collected in conjunction with underground diamond drilling and geotechnical data is captured within the drill database for consideration during the estimation of Mineral Reserves and Mineral Resources and in the detailed design of underground stopes and development. CSA maintains an extensive database of geotechnical data, has a solid understanding of the geotechnical characteristics of the mine and undertakes continuous improvement activities on a regular basis.

 

 

BEHRE DOLBEAR

 

 

SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
Behre Dolbear Australia Pty Ltd Page 54

 

8SAMPLE PREPARATION, ANALYSES, AND SECURITY

 

8.1Assay Sample Preparation and Analysis

 

Core processing follows the standard sequence of metre mark-up, quantification of recovery, RQD determination, geological logging, sample mark-up, core photography, bulk density determination and sampling.

 

The sampling procedure includes interval checks, cutting intervals, sampling intervals, inserting standards, sampling duplicates, weighing samples and dispatching samples. All parts of the core processing cycle are tracked and recorded electronically.

 

Core yard technicians review the core and check the sample intervals as identified on the sampling sheet, including checking to ensure that the sample intervals satisfy length requirements (0.4 – 1.1m for NQ core). The geologist corrects any errors or discrepancies.

 

Core is cut according to the core cutting procedure with a CoreWise diamond core saw.

 

Once the entire hole is cut, trays are laid out in order on the racks or on pallets. Sample intervals are marked onto the tray before sampling, allowing the correct sample intervals to be written onto the remaining half core. The core is cut in half with one half submitted to the laboratory for analysis and the other half returned to the tray. The half core to be analysed is sampled into pre-numbered calico bags with sample numbers from the bags written on the sample sheet before sampling. Sticks of half core longer than approximately 8cm are broken in order to reduce the risk of sample bags tearing during transport.

 

Sample preparation and assaying is carried out by independent laboratory, Australian Laboratory Services (“ALS”) in Orange, NSW, using an aqua regia digest and the Inductively Coupled Plasma Atomic Emission Spectrometry (“ICP-AES”) analytical method, with analysis for a standard suite of elements including copper, zinc, lead, and silver. Comprehensive Quality Assurance/Quality Control (“QA/QC”) protocols have been in place since 2004 and include insertion of standards (supplied by Ore Research and Exploration Pty Limited), blanks and duplicate samples at a frequency of approximately 1 in 30 samples. CSA monitors the QA/QC data reports; the sampling and assaying data for the main elements are considered reliable and without material bias and sample security arrangements are appropriate and satisfactory. CSA’s relational drillhole database is an AcQuire database which is a site-managed system.

 

Due primarily to Covid-19 impacts on CSA geological and core sampling staff during 2020-2022, a backlog of around 8,500m of un-logged and/or un-assayed drill core has developed. CSA has increased resourcing in this area in an effort to reduce the backlog as quickly as possible.

 

8.2Bulk Density Determinations

 

CSA has compiled a database of around 16,000 bulk density values by testing one sample from each core tray (approximately one sample per 6.5m of core) and determining density using the water immersion method. A regression formula based on the copper assay of the samples tested has been derived from this data. Since 2017, CSA has used ALS to carry out density measurements; CSA advises that the ALS data aligns well with the site- developed regression formula.

 

8.3Quality Assurance and Quality Control

 

Regular analysis of CSA mine standards, inserted with each batch sent to the laboratory, commenced in 2007. These are in addition to normal laboratory standards inserted in the process by ALS. All QA/QC data are stored in the CSA acQuire database.

 

Sample weights are measured both before the samples leave CSA Mine site, and before the samples are prepared for analysis at the ALS laboratory.

 

8.3.1Standards and Blanks

 

External standards and blanks are inserted into the sampling sequence for each drill hole assay submission. One blank and eleven standards derived from CSA mineralization were prepared, supplied and certified by Ore Research and Exploration Pty Ltd for use at CSA.

 

Standards to be inserted are specified by the logging geologist on the sampling sheet. The procedure requires a minimum of one standard for every 30 samples, with the selected standard representing a copper grade similar to the estimated copper grade in the surrounding samples. The core yard technician removes the label from the standard so that it cannot be identified by the laboratory. It is placed in the appropriately numbered sample bag and secured. Blanks are inserted periodically, principally following high grade samples to check for contamination in the laboratory processing stream.

 

 

BEHRE DOLBEAR

 

 

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8.3.2Field Duplicates

 

Duplicate intervals are specified by the geologist on the sampling sheet and are collected approximately every 30 samples. Duplicate samples are also inserted at the end of the hole. The core yard technician removes the remaining half of the core from the selected interval and places it in the appropriately numbered sample bag. For those intervals with duplicate samples, no core remains in the tray.

 

A separate dispatch is completed for each drill hole.

 

Comparison of original and duplicate (second half of drill core) assay results for the period 2002 to 2021 indicate good performance for copper, with a correlation coefficient of 0.98. Silver field duplicates are more variable than copper with a correlation coefficient of 0.79.

 

8.3.3Laboratory QA/QC

 

ALS inserts standards into the sample stream as part of its internal QA/QC procedure. Assay results for these standards are supplied with results for the samples submitted for analysis. Assay results for laboratory standards are also stored in the acQuire database. Again, laboratory standards are checked on receipt and incorporated in the QA/QC reports generated within the acQuire database and any issues are reported immediately to the laboratory for resolution.

 

8.4Security and Storage

 

Geological records and assay data are stored in an acQuire database. Drill hole information is stored as collar, down hole survey, assay, geology, specific gravity and geotechnical data.

 

Drill hole location data are entered manually, survey and assay data are uploaded from the survey tool and laboratory downloads respectively. Geology data is entered manually from paper logs or logged directly into acQuire via a laptop computer. A significant proportion of drill data in the database is derived from historic hardcopy drill logs.

 

All data entered is tracked via various registers, including Diamond Drill Hole Register, Diamond Drilling Spreadsheet, Core Processing Checklist and UG Sampling Register.

 

There are four levels of access to the database. ‘Read only’ access is permitted for “public” users, ‘restricted data entry’ access for “data entry” users and ‘write access’ to data tables for “acQuire user” users. This hierarchical security structure allows only the database manager full access to the data.

 

8.5Qualified Person’s Opinion on Sample Preparation, Security and Analytical Procedures

 

Cube has undertaken a review of historic (2020 and 2021) and current 2022 CMPL reports detailing the sample preparation, analysis and security. Cube is satisfied that the current practices undertaken by CMPL are to industry standard and provide assay data which are sufficient to support the estimation of a Mineral Resource.

 

 

BEHRE DOLBEAR

 

 

SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
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9DATA VERIFICATION

 

9.1Internal Data Verification

 

Basic database validation checks are carried out by CMPL personnel. These include sample from and to depths, geology depths, record duplication and missing collar duplication checks, as well as collar survey and down hole survey checks. Assay certificates are verified against acQuire dispatch and laboratory job numbers. Extensive random checks of the digital database are made against hardcopy/pdf format assay certificates and geology logs.

 

Core recovery data has only been collected consistently at CSA since 2004. Data from 2004 shows an average core recovery greater than 95%. Poor core recoveries are not considered to have a significant impact on the CSA resource.

 

9.2Review of CMPL’s QA/QC

 

Cube has undertaken a desktop review of historic (2020 and 2021) and current 2022 CMPL Mineral Resource reports containing control charts detailing the results of the CSA mine QA/QC. The process of systematic QA/QC monitoring has been in place since 2007. Cube’s review of standards and laboratory and field duplicate results has identified no material issues, indicating the assay data used by CMPL is without material bias due to laboratory processes and that results are repeatable with an appropriate level of precision and accuracy. Cube is satisfied that the current practices undertaken by CMPL are to industry standard and provide assay data which are sufficient to support the estimation of a Mineral Resource.

 

9.3Geological and Operation Reconciliation

 

Confidence in the geological interpretation and estimation at CSA is supported by a history of reconciliation of mined tonnage and grade compared with the stope tonnes and grade depleted, the latter being based on the resource and reserve estimates. CSA tracks the stope grades for the Undiluted Stope Design (resource grade), the Diluted Stope Design (the reserve grade) and the actual mined grades as reconciled to the mill. CSA uses a Cavity Monitoring System to obtain the final volume (tonnes) of each mined stope. The ore mined tonnes and grade are reconciled against the reported ore milled tonnes and grade, allowing for opening and closing stockpile figures.

 

Historically, CSA’s stope reconciliation reports show reasonably good agreement between the Reconciled Ore Mined figures and the Diluted Stope Design (reserve) figures. Over a ten-year period to December 2021, the annual stope production reconciliations showed tonnage reconciliations averaging 103%, copper grade reconciliation averaging 104% and copper metal reconciliation averaging 105%. Reconciliation data for the last three years covering the period 2019-2021 is shown in Table 9.1 and indicates a reconciliation of 97% for tonnes, 97% for grade and 94% for contained copper metal.

 

The high grade nature of the deposit means that any ore losses or excess dilution can have a meaningful impact on ore tonnes and grade. The higher dilution seen in recent years appears to have had a negative impact on reconciliation.

 

Table 9.1

 

CSA Stope Reconciliation - Ore Mined vs Reserve – 2019 to 2021

 

Year   Category    Tonnage
Mt
   Grade
% Cu
   Contained Copper
kt
 
2019   Reserve Depleted   0.844   4.34   36.8 
    Ore Mined (Mill Reconciled)   0.911   4.18   38.1 
    Mined vs Reserve   108%  96%  104%
2020   Reserve Depleted   1.108   4.06   45.0 
    Ore Mined (Mill Reconciled)   1.067   3.86   41.1 
    Mined vs Reserve   96%  95%  91%
2021   Reserve Depleted   0.816   3.94   32.2 
    Ore Mined (Mill Reconciled)   0.695   3.97   27.6 
    Mined vs Reserve   85%  101%  86%
Overall       97%  97%  94%

 

9.4Qualified Person’s Opinion on Data Adequacy

 

The QP is satisfied that the data on which the Mineral Resource has been based are of sufficient quality to support the estimation of a Mineral Resource.

 

 

BEHRE DOLBEAR

 

 

SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia - MAC February 2023
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10MINERAL PROCESSING AND METALLURGICAL TESTING

 

10.1Metallurgical Testwork

 

With 55-years of operating history (23-years under Glencore ownership), the CSA orebody mineralogy is well understood with the operating performance of the processing plant consistently achieving metallurgical recoveries in the order of 97-98% to produce a high-quality 26-27% Cu concentrate.

 

An overview of the standard metallurgical management activities performed during CSA operations along with a selection of historical metallurgical studies are summarised in the following sections. Some of these studies were investigative in nature and may not have resulted in significant modifications or adjustments to the processing facility.

 

10.1.1Overview of Metallurgical Testing Practices

 

Being an operating mine, particularly one with such extensive operating history, CSA has established standard operating procedures for metallurgical management of the processing facility.

 

The operation employs dedicated metallurgical staff and conducts regular operational test practices using a combination of onsite and offsite laboratory testing.

 

The most comprehensive test regime employed by the metallurgical team on a regular basis is the Flotation Plant Survey which takes multiple samples from across all key process streams throughout the plant to establish a detailed mass balance and provide input into ongoing data analysis. The following outlines the key procedures employed in the survey:

 

Sample collection follows the internally developed Safe Work Instruction - Flotation Survey Procedure, updated in November 2022, which is based on sample techniques reported in Wills’ Mineral Processing Technology book from JKMRC Australia 7th Edition.

 

Metallurgical samples from across 22 locations within the processing streams are taken in various set intervals and conducted in accordance with sample capture procedures.

 

Standard onsite sampling and testing includes flotation, settling tests, On-stream Analyzer (“OSA”) calibration samples, PSI flotation feed, Specific Gravity (SG) testing and moisture analysis.

 

X-ray fluorescence (“XRF”) analysis is conducted in the onsite laboratory to establish initial results used for short-term operational decisions and internal reporting.

 

A selection of samples is then sent offsite to independent ALS Ltd. laboratory Service for assay using Inductively Coupled Plasma Atomic Emission Spectroscopy (“ICP-AES”), an analytical method used to detect and measure elements to analyze chemical samples.

 

Samples requiring comminution analysis are typically sent to JKTech Pty Ltd. (“JK Tech” or “JK”) laboratories at the University of Queensland

 

Results received from onsite and offsite laboratories are then incorporate into a detailed data analysis and regression modelling process (outlined in Section 10.1.2)

 

Site samples for analysis are kept and stored in the onsite laboratory.

 

Offsite laboratory results are compared with onsite laboratory results to allow the metallurgical team to calibrate internal metallurgical models, onsite laboratory equipment and plant equipment.

 

Results are regularly validated through repeat sampling, and statistical analysis; activities commonly requiring validated results include those required for adjustments of SG gauges of the flotation feed and concentrate thickener; in such cases, four samples are taken from each sample point to establish the average and standard deviation of the results.

 

10.1.2Data Analysis and Regression Modelling

 

Testing procedures and results are supported by statistical analysis such as regression models, reproducibility tests, and variability mapping. During individual operational trials, test work is usually supported by statistical experimental design (t-tests) using the statistic computer package Minitab.

 

An End of Month Metal Reconciliation is based on a Matrix-mass balance approach, which involves data from several sources including:

 

Offsite ALS Laboratory assay results

 

Onsite laboratory XRF

 

 

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site and port stockpile information from Alfred H Knight (independent laboratory service), Qube Logistics (port operator), and Aurizon (rail operator)

 

internal mining data

 

The mass balance is established to identify actual from reconciled residuals through the adjustment of standard deviations and Monte Carlo simulations. If the mass balance identifies discrepancies, data and instrumentation are reviewed in detail for readjustments.

 

Key analysis within the mass balance process includes assays of feed, concentrate and tailings streams. Composite samples are sent to ALS and for XRF in-house analysis.

 

 

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10.1.3Planning and Forecasting

 

The Weekly, Monthly and Quarterly plans used in CSA’s operations employ in-house calculated regression models to establish appropriate assumptions and forecasts. The regression model incorporates geometallurgical results, elemental to mineral conversion calculations, back-calculations, and mining figures (haulage and stope grades).

 

Two main components of the processing forecasts and their associated drivers are:

 

Grinding Forecast

 

Mill Power Assessment - based on the Mine Future Ores Program conducted in 2020 by JKTech and based on comminution models reported by Napier Munn 1999, Mineral Comminution Circuits

 

Throughput Model - power regression models which incorporate CSA SAG and ball mill powers and parameters.

 

Flotation Forecast

 

Recovery and Concentrate Grade - regression models developed from geometallurgy, mineralogy and flotation testwork

 

Tailings Grade Prediction - back-calculated from the calculated feed grade, milled tonnes, and copper metal tonnes

 

Anticipated Feed Grade - calculated from the mining figures, haulage tonnage and stope copper grades.

 

As shown in Table 5.1, CSA has maintained excellent consistency in copper and silver recovery, due largely to the continual improvement on internal geometallurgical models. As CSA continues to develop existing orebodies at depth, extend existing orebodies laterally, discover new orebodies and, potentially, treat third-party ore sources, the metallurgical team will continue to undertake testwork and improve the accuracy of these models.

 

10.2Deleterious Elements

 

The influence of deleterious elements on CSA’s operations is low, however regular testing and analysis is performed to ensure any elevated levels are managed effectively. Close attention is given to stopes containing relatively high amounts of iron, zinc and lead (which may vary from 0.01 to 0.6%). Any elevated levels are immediately communicated to mine geologists. Laboratory batch flotation selectivity, and mineral liberation test work on future mineralization is conducted to prepare planning inputs and minimise any influence on product grades.

 

10.3Test Laboratories

 

CSA maintains an onsite laboratory which is capable of conducting flotation tests, settling tests, On-stream Analyser (OSA) calibration samples, flotation feed slurry testing, SG testing and moisture tests.

 

Offsite laboratories are used for independent validation and test work. ALS Laboratory Services in Orange, NSW and JK Tech at the University of Queensland are the offsite laboratories commonly used.

 

ALS Ltd. is a global company headquartered in Brisbane, Australia, which provides testing, inspection, certification, and verification services out of over 370 sites across 65 countries. With 18,000 staff, ALS operates throughout Australia, Asia, the Pacific, North America and South America, Europe, and Africa. ALS is ISO17025 and ISO9001 certified.

 

JKTech offers consultancy and laboratory services, specialist software and equipment, and professional development courses to mining companies, particularly centred around comminution, flotation and hydrocyclone and metallurgical assessment. JKTech is a subsidiary of the University of Queensland.

 

10.4Mine Metallurgical Test Work on Future Orebodies Study – JKTech 2020

 

JKTech was engaged to conduct metallurgical testing and a geometallurgical study program as part of continuous improvement practices at CSA. The objective of the study was to improve the forecasting of throughput, copper concentrate grade and concentrate recovery for QTSN and QTSC orebodies. The test program included 44 samples in total, consisting of 39 geometallurgical and 5 characterisation samples taken from a carefully selected array of drill hole samples.

 

Table 10.1 outlines the tests performed and the intended purpose of each test. 

 

 

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Table 10.1

 

2020 Future Orebody Metallurgical Testing Programme (JK Tech)

 

Test Purpose
   

Equotip

 

Equotip hardness measurements can be used as a comparative hardness ranking tool to identify domains of similar hardness in large rock volume. Determines if comminution hardness can be predicted using Lieb hardness measurements

JK Rotary Breakage Test Allows rapid testing of particle breakage under energy single point contact and low energy repetitive impact conditions. Provides indicative Axb for SAG mill assessment
SMC Used to predict comminution circuit throughput as well as rock mass characteristics and blasting properties. Provides a cost-effective means of profiling an orebody. Provide scale-up of the JK Rock Breakage Test Lite
Bond Ball Mill Work Index A standard test for determining the ‘Bond Ball Mill Work Index’ (grinding power requirement) of a sample of ore by measuring the resistance of the material to crushing and grinding. Provides input to ball mill design and optimization
Point Load Index Test (PLT) Used to simultaneously characterize rock for blastability and comminution processes. Determines if comminution hardness can be predicted using PLT measurements
Mineralogy and Assay Undertaken by a Mineral Liberation Analyser (MLA) particle mineral analysis. Used to identify mineral composition, deleterious elements, grain size, extent of liberation, particle size distributions and maximum flotation recoveries. QEMSCAN measurements taken, supported by Chemical assay (ME-OG62 four acid digest method). Determines modal mineralogy which can affect hardness – proxy input

 

On completion of the study, key internal geometallurgical, mass balance, grinding and processing regression models were updated to improve the statistical accuracy of predictions.

 

10.5Comminution

 

Design and range values for CSA’s primary comminution properties are outlined in Table 10.2. These values have been established through various testing campaigns conducted by CSA over the past 55 years of operation.

 

Table 10.2

 

Comminution Properties

 

Comminution Properties   Unit   Value

Abrasion Index - Range 

     

0.03 - 0.24 

Abrasion Index - Design       0.09
Bond Impact Crushing Work Index - Range   kWh/t    
Bond Impact Crushing Work Index - Design   kWh/t   19.0
SMC Drop Weight Index - Range   kWh/m3   2.35 - 7.28
SMC Drop Weight Index - Design   kWh/m³   4.77
Bond Rod Mill Work Index - Range   kWh/t   11.0 - 22.1
Bond Rod Mill Work Index - Design   kWh/t   16.7
Bond Ball Mill Work Index - Range   kWh/t   7.8 - 17.0
Bond Ball Mill Work Index - Design   kWh/t   15.3
Axb - Range       27 - 97
Axb - Design       40.3

 

10.6Recovery and Concentrate Estimates

 

Design and range values for CSA’s primary recovery properties are outlined in Table 10.3.

 

Table 10.3

 

Copper Flotation Results

 

Cu Flotation Concentrate   Units   Result

Cu Concentrate Grade (range) 

 

 

24.0 - 29.0 

Cu Concentrate Grade (design)   %   26.5
Cu Recovery (design)   %   98.0
Cu Recovery (for resource and reserve estimation)   %   97.5

 

 

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10.7Qualified Person’s Opinion on Mineral Processing and Metallurgical Testing

 

Over the long operating history of the CSA mine, the QP is satisfied that the many metallurgical testwork programmes undertaken have been comprehensive and extensive. Section 10 provides a snapshoot of some of this work. The mineralogical and metallurgical understanding developed from this testwork has resulted in the superior metallurgical recoveries and concentrate quality being consistently achieved from the process plant.

 

 

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11MINERAL RESOURCE ESTIMATE

 

This section contains forward-looking information related to tonnage and grade for the project. The material factors that could cause actual results to differ materially from the conclusions, estimates, designs, forecasts or projections in the forward-looking information include any significant differences from one or more of the material factors or assumptions that are set forth in this sub-section including actual in-situ characteristics that are different from the samples collected and tested to date, and equipment and operational performance that yield different results from current test work results.

 

11.1Introduction

 

CMPL undertakes Mineral Resource estimation in-house. As CSA is located in Australia and was previously owned and operated by GIAG, the Mineral Resource estimate (“MRE”) was historically reported in accordance with JORC 2012 guidelines. The CSA Mineral Resource estimate is updated annually and consists of Measured, Indicated and Inferred (“MII”) resources and is reported as at December of each year. Cube has reviewed CMPL’s December 2020, December 2021 and December 2022 resource reports and supporting documentation. CMPL did not re-estimate the resource block model in December 2021 but merely updated the 2020 estimate based on mining depletion during 2021. The December 2022 CMPL Mineral Resource estimate was undertaken using all available drilling, geological and assay data as at September 2022 and depleted with strings and wireframes (“Void Model”) as at 31 December 2022.

 

Resource estimation at CSA is based on long-standing procedures, mostly dating from the mid-2000s. CMPL closes off the drill hole database (new geological and assay data) at the end of September each year to allow time to re-model the resource before re-estimating resources for each system. In parallel, a Void Model is developed using the actual stope voids mined plus an estimate of the stopes to be mined to end December. The voids are deducted from the resource model to obtain an estimate of the remaining in-situ resource. The new MRE is used by the mining and technical services departments for mine planning of the following year and is used by the company for the end of year MRE statement. In April each year, the estimates are updated using actual voids mined to end December plus any additional drill data.

 

CMPL defines resource wireframes for each mineralised lens in the five systems – QTSN, QTSC, QTSS, Eastern and Western. Interpretation of the wireframes is based on geological mapping in the mine, drill core logging, and the structural model that has been developed over time. The wireframe contacts are interpolated between developed levels and then extrapolated beyond mine development at 5m section increments using drill hole data, core photography and assay data. CMPL uses a threshold value of 2.5% Cu from the assay database to guide the interpretation. An outer mineralisation envelope is defined for each model using the regional S1 shear interpretations as boundaries.

 

Separate block models are established for each of the five systems. The parent block size of 5mE x 5mN x 10mRL is used for all models. Assay data is composited to 1m; no grade cuts are applied to the copper data and only a few composite values are capped for silver. Variography is carried out for each mineralised lens if there is sufficient data available. Grade estimation for copper and silver is carried out using Ordinary Kriging (“OK”) in three passes with the first pass search ellipse based on the variogram range; the search ellipse dimensions are doubled for the second pass and quadrupled for the third pass. Interpreted wireframe boundaries are treated as hard boundaries for grade estimation. The density regression formula is applied using the estimated block copper grade to determine the block bulk density value.

 

Resource categorisation of Measured, Indicated and Inferred is initially assigned to the blocks informed in Pass 1, 2 and 3 respectively. This initial categorisation is manually modified based primarily on the drilling density. In general, areas with average drill hole spacing of 20 x 37.5m or less in QTSN and 20m x 20m for QTSC, QTSS, Eastern and Western, are categorised as Measured resources, with 40 x 70m or less as Indicated resources in QTSN and 40m x 40m in the other four systems. Inferred resources are categorised in areas with a spacing exceeding that of the upper limits on Indicated resources. CMPL separates Pass 3 blocks into Inferred resources and a fourth category ‘Unclassified’ for areas of low confidence with sparse drilling; the Unclassified material is not included in the reported MRE.

 

 

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11.2Available Data

 

In all, more than 46,000 samples from more than 3,500 diamond holes contribute to the CSA Mineral Resource. This drilling ranges from as far back as 1950 to the present; however, the bulk of the drilling contributing to the estimation has been completed since 2000. The diamond holes for estimation prior to 2000 are located predominantly in the upper levels, and represent 51% of the drill data; diamond drilling post 2000 has been focussed primarily on the lower levels and represents approximately 49% of the drill data. The average drillhole length (surface and underground) is approximately 160m with the maximum over 1,100m. In general, drill spacing increases with distance from development with nominal 20m north-south by 20m vertical spacing for 2 to 4 levels ahead of the mining front, expanding to 40m by 40m and greater below this. For QTS North, the bulk of drilling prior to 2017 was at the above described spacing, but during 2017, following an external analysis of the drill spacing, this was increased to 20m north-south by 37.5m vertical.

 

Diamond holes are planned using a standard procedure. Core sizes vary, however the bulk of drilling used for the current resource comprises NQ2 and NQ3 core sizes, with lesser contributions from HQ, NQ, BQ, LTK48 and LTK60. Hole collars are marked up by the mine surveyors and checked again by the mine surveyors on completion of drilling.

 

The database currently includes some underground drill collars without verifiable collar survey pickups. Of these and since 2000, 392 are relevant to the current CSA Mineral Resource, with 235 relating to QTS North, 77 to Western, 44 to Eastern, 35 to QTS South and one to QTS Central. These drill collar locations are based on planned coordinates.

 

A review of lens shape and the resource model revealed no obvious distortion that could be attributed to incorrect location of drill intersections. Based on this, it is considered unlikely that actual drill collar locations vary significantly from the planned locations.

 

The remaining unsurveyed holes in QTS North, QTS South, QTS Central, Eastern and Western have sufficient support from surveyed collars from the same drill pads, and a high enough density of adjacent drill holes with surveyed collars to be confident in their use in the resource models.

 

As a minimum standard, down hole directional surveys are carried out at 15m, 30m and every 30m following. Extra downhole surveys are conducted as deemed necessary. The azimuth of the 15m survey is at times affected by the proximity of the drill rig or ferrous ground support and therefore is monitored closely. Surveys that show significant deviation are checked and, if considered erroneous, are removed from the database. Since late 2016, multishot surveys, with surveys taken every 3m, are taken on completion of each hole.

 

11.3Geological Models

 

Mineralisation at CSA is largely controlled by major shears, and consists principally of massive, semi- massive, and vein sulphides, with the dominant sulphide being chalcopyrite. Mineralisation away from the lenses is narrow and discontinuous, occurring mainly in minor shears within barren altered sediments. Mapping and core logging are the main sources of information, and greatly assist in interpretation of mineralisation.

 

Interpretation of lenses at CSA is based on geological mapping and diamond drilling data. Mineralised boundaries are digitised from geological maps and the resulting strings are allocated to the appropriate RLs. These boundaries are then interpolated between developed levels and extrapolated beyond development at 5m intervals and adjusted using diamond drill hole records, core photography and assay data. Boundary strings are aligned to drill hole lithology/grade boundaries to ensure location accuracy. When the complete set of bounding strings for an individual lens has been generated and checked, the strings are linked to produce a solid lens wireframe.

 

Lens interpretations are completed using a threshold value of 2.5% Cu, maximum internal downhole waste of 3m and a minimum lens width of 3m.

 

No external dilution is added as lens block model margins are constrained by the geological interpretation while overall models are constrained by regional shears.

 

11.4Mineralised Domain Coding

 

CMPL applies a systematic domain code to each lens wireframed within the five shear systems. The CSA shear systems are Western, Eastern, QTS South, QTS Central and QTS North. The domain codes (“ROCKZO NE”) consist of three digit codes for mineralised domains and two digit codes for low grade/waste domains as presented in Table 11.1.

 

 

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Table 11.1

 

ROCKZONE CODES

 

Mine Area   ROCKZONE

Western – low grade/waste 

 

10 

Western – Mineralised   100, 101,110,120,121,130, 140, 150, 160, 170, 180, 190,200
Eastern – Low grade   30
Eastern Mineralised   700, 710, 720.to.810
QTS South – Low grade/waste   10
QTS South Mineralised   100, 200, 300, 400, 450, 500, 550,600, 650
QTS Central – Low grade/waste   40, 50, 60
QTS Central- Mineralised   850, 860, 870, 880, 890, 900, 910, 920
QTS North-Low grade/waste   20
QTS North-Mineralised   300, 310, 320.to.570

 

 

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11.5Composites

 

Within the ROCKZONE wireframe domains the majority of sample intervals are 1m in length. CMPL has determined that there is no correlation between sample length and copper grade. Sample intervals within individual ROCKZONE wireframe domains are composited to 1m lengths for use in estimation.

 

11.6Exploration Data Analysis and Grade Capping/Outlier Restrictions

 

CMPL undertakes a statistical review of each ROCKZONE domain within the five shear systems to confirm domain characteristics and identify outlier copper and silver grades. The copper statistics presented generally confirm that the domain distributions are appropriate for a linear interpolation method such as Ordinary Kriging. Silver distributions within ROCKZONE domains are shown to be more variable than copper indicating a need for controlling the influence of outliers when using a linear interpolation method.

 

Within the copper grade populations, high grades are a feature, indicating the presence of massive copper sulphide. Their occurrence is considered by CMPL to be acceptable in terms of geological continuity and location within sulphide lodes, hence no grade capping is applied to the copper grades. While extreme outliers are noted for silver, most are considered to be acceptable within the domain population. A small number of silver grade caps have been used at QTS South and QTS Central. Grade capping replaces the original grade with a selected maximum for interpolation.

 

11.7Variography

 

Three-dimensional continuity analyses were conducted using Snowden Supervisor software. Traditional variogram models were generated by ROCKZONE for copper and silver using the 1m composite data files. The variograms models were updated for QTS North, QTS Central, Eastern and Western systems, where copper and silver variables were transformed to normal distribution (normal scores) before variogram calculation and back- transformed for estimation purposes.

 

The downhole variogram was viewed for each ROCKZONE domain to determine the nugget effect as this direction is the most informed to understand inherent variance. The nugget effect for copper and silver was generally 10% to 35% of the total variability.

 

The copper and silver variogram models are often different. This is expected given the moderate correlation between the data sets. Magnitudes and directions of the continuity ellipses match the steep plunge and sub-vertical dip of the interpreted domains. The maximum copper ranges are generally longer than the silver equivalents indicating the lower variance of the copper data.

 

11.8Block Model Definition

 

CMPL defines a three-dimensional block model for each of the five shear systems using Datamine Studio RM software. Block sub-division is not used.

 

11.9Estimation/Interpolation Methods

 

Ordinary kriged grade estimation was performed using Datamine Studio RM software. The Datamine Dynamic Anisotropy option was used for the first time in 2014 (Hosken, 2014), resulting in improved search paths proximal to lens boundaries where a curved search is more appropriate.

 

Hard boundaries are applied using the ROCKZONE field and grade-capped composited data.

 

Copper and silver grades are estimated using a three-pass search process. The first pass search is based on an optimal search derived from Kriging Neighbourhood Analysis (“KNA”) studies completed for QTS North, QTS South, Eastern, Western and QTS Central. The first pass uses a search distance equal to, or greater than variogram maximum ranges. The second pass typically uses double the primary search range. A third pass is used to ensure each domain is fully populated with an estimated grade using a search radius up to four and a half times the range of the primary search. The same minimum and maximum number of samples is applied to the three stages, with a maximum of four sample per borehole.

 

The KNA studies determined optimal block size, sample search radii, number of samples and discretisation. Block size and discretisation parameters have been maintained for models produced since the KNA studies were completed. Search sizes are updated each year based on updated variography.

 

11.9.1Block size

 

A 5mE by 5mN by 10mRL block size is used for all mineralization systems.

 

 

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The 2005 KNA study (Eastern System) resolved that a block configuration of 5mE by 10mN by 10mRL was appropriate, but did not consider 5mE by 5mN by 10mRL block size as an option. Inspection of the block size vs kriging efficiency and regression slope plot used in 2005 reveals that there is very little change in either kriging efficiency or slope for smaller block sizes, up to the chosen configuration while both efficiency and slope begin to deteriorate immediately past the chosen configuration. Given the proximity of this deterioration to the chosen configuration, and the stability of smaller block sizes, it is considered that a configuration of 5mE by 5mN by 10mRL would be a more suitable configuration for Eastern than that chosen in 2005.

 

11.9.2Discretisation

 

The 2006 KNA study determined an optimal discretisation for QTS North and QTS South of 4 by 4 by 4. Similarly, the 2005 KNA study determined an optimal discretisation grid for Eastern of 2 by 4 by 4. These values are considered still appropriate and were retained for the current estimation.

 

The Western estimation uses a 4 by 4 by 4 discretisation grid and QTS Central 3 by 3 by 3.

 

11.9.3Number of Samples

 

The minimum and maximum numbers of informing samples used for the current estimation vary according to lens, with an overall minimum of 5 and overall maximum of 30. These numbers are based on the KNA studies.

 

11.10Density Assignment

 

Insitu bulk density data consists of 16,000 records, collected at a frequency of one determination per core tray (~6.5m for NQ).

 

A regression equation is applied for block model density determinations. Block model in-situ density is calculated using the estimated copper grade and the regression formula presented below, for all systems except the Western System:

 

Insitu bulk density = 2.816 + 0.0406 x estimated copper grade (Cu %)

 

For the Western system, insitu bulk density is determined by:

 

Insitu bulk density = 2.780 + 0.0400 x estimated copper grade (Cu%)

 

11.11Validation

 

11.11.1Visual Validation

 

Block models are validated visually by comparing the input data with the block estimates. Copper grade, kriging efficiency and search pass are viewed in detail with drillhole data density to assess estimation quality. In each case, there is a good correlation between data density and estimation quality (kriging efficiency).

 

11.11.2Grade versus Elevation Plots

 

Grade versus elevation plots for each lens are reviewed. Each plot shows a good correlation between block and sample grades where the number of drillhole samples is high. In all cases, the plots show that the block grades represent a smoothed version of the sample grades, indicating the Ordinary Kriging ‘smoothing’ process has performed as expected. Modelled lens are also reviewed against detail underground face mapping (Figure 12).

 

11.11.3Model versus Composite Statistics

 

Model and 1m composite grades for each system are compared against wireframes and block model volumes. The sample and block grades are mostly within 10% of each other. In some cases, the sample grades are higher than the model grades, which often indicate the drilling is clustered on high grade zones. Ordinary kriging, by principal, is a least variance estimator and de-clusters the grades during the estimation process.

 

The wireframe and block model volumes compare well in all cases, with the difference in most cases <1%.

 

11.12Confidence Classification of the Mineral Resource Estimate

 

Table 11.1 summarises the CSA Mineral Resource classification criteria with respect to kriging efficiency and drill data density for 300 lens and 850 lens respectively.

 

Eastern System above 9,070mRL is classified as Inferred due to the incorporation of historical assays with unknown analytical method.

 

 

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Metals Acquisition Corp. CSA Mine

  

Figure 12 WIRE FRAME MODELLING MATCHING GEOLOGICAL MAPPING
BDA - 0230-01-April 2022 Behre Dolbear Australia Pty Ltd

 

 

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Table 11.1

 

CSA Mineral Resource Classification Criteria

 

Resource
Category
General Description Geostatistical Parameters
Measured

Majority mineralization developed and mapped. 

Sufficient diamond drill data to define contacts, continuity, grade and density with a high level of confidence. 

Diamond drill spacing of approximately ≤ 20m north-south by 37.5m vertical for QTS North and 20m north-south by 20m vertical for other systems. 

Majority search pass 1. Copper kriging efficiency > 40 RESCON=1
     
Indicated

Drill intersections too widely spaced to ensure continuity, but adequate to assume continuity. 

Features as for Measured can be estimated with a reasonable level of confidence. Diamond drill spacing of approximately ≤ 40m north-south by 70m vertical (QTS North) and 40m north-south by 40m vertical (all other systems). 

Majority search pass 1 and 2 Copper kriging efficiency > 20 < 40 where 1st pass is used. 

RESCON=2 

     
Inferred

Not enough data to reliably predict contacts and grade continuity. Features as for Indicated can be estimated with a low level of confidence. 

Diamond drill spacing of approximately ≥ 40m north-south by 70m vertical (QTS North) and 40m north-south by 40m vertical (all other systems). Drill density is sufficient to give confidence that the lens persists down plunge/ dip

Majority search pass 2 and 3 

Copper kriging efficiency < 20 where 1st pass is used. 

RESCON=3 

 

11.13Reasonable Prospects of Economic Extraction

 

The CMPL method of defining mineralised lodes is by location within shear structures and geologically mapped structures and the application of a 2.5% Cu threshold with a maximum of 3m of sub-grade over a minimum length of 3m. Based on the assumed stope break even cut-off of 2.2% Cu for underground stope mining applied in the reserve definition process, the defined Mineral Resource lodes have reasonable prospects of economic extraction.

 

The calculation of the stope break even cut-off grade used in the assessment of economic viability of Mineral Resources uses a mining cost of A$98/t moved, a processing cost of A$20/t milled, G&A costs of A$19/t milled and other offsite costs of A$50/t milled.

 

Further discussion is presented below in Section 12.6.

 

11.13.1QP Commodity Price

 

The calculation of the stope break even cut-off grade is based on a copper price of US$7,400/tonne. This price aligns with the price used at CMPL for mine planning and is an approximate 9% discount to the longterm Consensus copper pricing on February 1, 2023.

 

11.13.2Depletion

 

The reported Mineral Resources have been depleted using surveyed wireframe volumes to flag blocks within each lode system (Figure 13). The QTS North, QTS Central, Eastern and Western block models were depleted with both 3D shapes related to development and depletion strings (“As-builts”). QTS South block model was depleted with strings only. The 3D shapes and depletion strings are supplied by on-site mining engineers. The resultant Mineral Resource is then assessed lens by lens, level by level, in conjunction with the mining engineers. Non- mineable components are excluded in spreadsheet format and the final resource tabulated.

 

11.13.3Mineral Resource Reporting Cut-Off

 

The Mineral Resource estimate is based on lode definition using geologically defined structures and application of copper grade constraints (2.5% Cu threshold over a minimum length of 3m) in combination with an underground stope mining method requirement of reasonable prospects of economic extraction.

 

11.14Mineral Resource Estimate

 

The Mineral Resource estimate for the CSA Mine is reported here in accordance with the SEC S-K 1300 regulations. and are considered to have reasonable prospects of economic extraction. The Mineral Resources presented in this section are not Mineral Reserves and do not reflect demonstrated economic viability. The reported Inferred Mineral Resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that all or any part of this Mineral Resource will be converted into Mineral Reserve. All figures are rounded to reflect the relative accuracy of the estimates and totals may not add correctly. Mineral Resource estimates exclusive of Mineral Reserves are summarized in Table 11.2. on a 100% ownership basis.

 

The effective date of the Mineral Resource estimate is December 31, 2022.

 

 

 BEHRE DOLBEAR

 

 

 

 

Metals Acquisition Corp. CSA Mine

 

Figure 13 CUBE DECEMBER 2022 RESOURCE LONG SECTION
BDA - 0230-02-Feb. 2023 Behre Dolbear Australia Pty Ltd

 

 

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Table 11.2

 

Copper and Silver Mineral Resources Exclusive of Mineral Reserves as of 31 December 2022 - Based on a
Copper Price of US$7,400/t

 

System   Resource
Category
  Tonnes
Mt
 

Cu 

% 

  Cu Metal
Kt
  Ag
g/t
  Ag Metal
Mtoz

All Systems 

 

Measured 

 

0.0

 

0.0

 

0.0

 

0.0

 

0.0

    Indicated   0.0   0.0   0.0   0.0   0.0
    Meas + Ind   0.0   0.0   0.0   0.0   0.0
    Inferred   3.5   5.6   193   20   2.2
    Total   3.5   5.6   193   20   2.2

Notes: 

Mineral Resources are reported as of 31 December 2022 and are reported using the definitions in Item 1300 of Regulation S-K (17 CFR Part 229)(SK1300);

Mineral Resources are reported Excluding Mineral Reserves;

The Qualified Person for the estimate is Mike Job, of Cube Consulting Pty Ltd;

Price assumptions used in the estimation include US$7,400/tonne of copper and US$21.70/troy ounce of silver; the copper price is an approximate 9% discount to Consensus copper pricing as at Feb 1, 2023;

Geological mineralisation boundaries defined at a nominal 2.5% Cu cut off;

Metallurgical recovery assumptions used in the estimation were 97.5% copper recovery and 80% silver recovery;
Costs assumptions during cut-off grade calculation are A$98/t ore mined, A$20/t ore milled and A$19/t G&A;
Mineral Resources reported as dry, raw, undiluted, in-situ tonnes;

Figures are subject to rounding.

 

11.15Factors that May Affect the Mineral Resource Estimate

 

Areas of uncertainty that may materially impact the Mineral Resource estimates include:

 

Movement in long-term metal price and exchange rate assumptions based on market dynamics outside the control of the Company

 

As CSA continues to conduct exploration drilling, changes in the local interpretations of mineralization geometry may occur based on the results of such drilling. Changes could include the presence of mineralization extensions, off-shoots, faults, dikes and other structures as well as changes to the continuity of shear geology, the continuity of mineralized zones and grade continuity assumptions

 

Changes to metallurgical recovery assumptions which may be driven by changes in mineralogy or processing plant operation

 

Changes to the grade threshold values applied to the lode definitions

 

Changes to environmental, permitting and approvals for the ongoing operation of CSA.

 

11.16Qualified Person’s Opinion

 

The QP is of the opinion that the Mineral Resource estimate is well-constrained by three-dimensional wireframes representing geologically realistic volumes of mineralisation. Exploratory data analysis conducted on assays and composites shows that the wireframes represent suitable domains for Mineral Resource estimation. Grade estimation has been performed using an interpolation plan designed to minimise bias in the estimated grade models.

 

Mineral Resources are constrained and reported using economic and technical criteria (geologically and grade defined thresholds and close proximity to mine infrastructure) such that the Mineral Resource has a reasonable prospect of economic extraction.

 

Mike Job of Cube Consulting Pty Ltd. is the Qualified Person responsible for the estimation of the Mineral Resources as of 31 December 2022. The QP believes that this Mineral Resource estimate for CSA mine is an accurate estimation of the in-situ resource based on the data available, has been prepared using industry standard accepted practice and conforms to the requirements of Subpart 229.1300 of Regulation S-K. The QP also believes that the available data and the resource model are sufficient and appropriate for mine design and planning.

 

 

BEHRE DOLBEAR 

 

 

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12MINERAL RESERVE ESTIMATE

 

This section contains forward-looking information related to tonnage and grade for the project. The material factors that could cause actual results to differ materially from the conclusions, estimates, designs, forecasts or projections in the forward-looking information include any significant differences from one or more of the material factors or assumptions that are set forth in this sub-section including actual in-situ characteristics that are different from the samples collected and tested to date, equipment and operational performance that yield different results from current test work results.

 

12.1Introduction

 

CMPL estimates Mineral Reserves annually in December using the updated Mineral Resource estimate and Void Model to allow for mining depletion.

 

The mining method used at CSA is a combination of sublevel long-hole open stoping and Avoca stoping (for narrow mineralized lenses) with either paste or rock fill (discussed in more detail in Section 11). CSA uses Deswik® software (stope design and scheduling) for mine planning. The Mineral Reserve is the economically mineable part of the Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Feasibility level, or greater, as appropriate, to facilitate application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified and considered economically viable.

 

The principal parameters used in the Mineral Reserve Estimate for stope design and economic evaluation of the are as follows:

 

•           the stope cut-off grade used for the 2022 and 2021 Mineral Reserve was 2.2% Cu (2.1% Cu in 2020) based on the site cost per tonne of ore mined (operating costs from stoping and development to mine gate including relevant sustaining capital costs) and the net smelter return per tonne of copper metal produced calculated using applicable commodity price assumptions and calculated revenue factors

 

•           dilution and recovery factors include allowance for overbreak dilution, fill dilution, and ore losses; the factors are applied are based on historical stope performance; waste dilution is assumed to have zero copper and silver grade

 

•           for stopes classified as Proved (>95% Measured resource), any Indicated or Inferred material included in the stopes is treated as waste at zero copper and silver grade; for stopes classified as Probable (>95% Measured and Indicated resource), any Inferred material included in the stopes is treated as waste

 

•           development, which must be mined to access the stopes, is treated as ore if >1% Cu

 

•           economic evaluation of each mining area or level requires that all stopes on that level or area must cover the access costs (ie. the operating and capital costs for vertical and lateral development); if the mining area or level does not have a positive operating margin, all the stopes and development are assigned ‘Not Economic’ in the Deswik scheduler.

 

BDA considers that the CSA reserve estimation procedures are generally appropriate. Estimating mine dilution at zero grade is a conservative assumption, given that much of the diluting material will carry some copper mineralisation.

 

12.2Development of the Mining Case

 

Mineral Reserve estimation at CSA is carried out using computer generated geological block models. All Mineral Reserve design work and tonnes and grade evaluations has been completed using Deswik’s planning and stope optimiser software (Deswik.CAD and Deswik.SO respectively). Deswik.SO (SO) allows the user to define numerous stoping properties including:

 

Stope shapes and orientation

 

Cut-off grades

 

Stope dimensions and pillar sizes

 

Dilution

 

Mining limits and waste ratios.

 

12.3Design Guidelines

 

CSA utilises a combination of mining methods including transverse longhole open stoping, longitudinal open stoping, Avoca stoping and blind uphole stoping. The predominant mining sequence for the transverse stoping areas is towards the centre access. Cemented paste fill (CPF) is employed in these areas.

 

 

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The longitudinal mining areas can be mined either underhand or overhand, depending on existing (and planned) development access, backfill methodology and economics. In narrower areas of the mine, the mining sequence is overhand, utilising waste rock fill (WRF). When economically justified these areas are fully extracted with no pillars. For the remaining overhand areas, crown, sill and rib pillars are included in the design and are not planned for extraction.

 

The Mineral Reserve has been estimated assuming these mining methods will continue to be applied in the future.

 

12.3.1General Design Guidelines - QTSN

 

The historical level interval for QTSN was 30m vertically (floor to floor). Two levels, the 8540 and 8500, were developed at 40m, whilst all levels below 8500 have a reduced interval of 35m. Floor strings were created in Deswik to ensure the correct elevations were followed during the stope creation process.

 

Stope strike lengths were limited to 20m as dictated by the geotechnical recommendations. Stope widths ranged from 5m to 25m, depending on the width of the mineralized lens, or lenses being mined in the stope. A minimum pillar of 5m between parallel stopes has been assumed.

 

Whilst the above geometries have been applied at CSA with good results, continued suitability will require monitoring to ensure satisfactory stope performance. The stope design process does not consider local structures that may adversely affect stope performance. This process is completed during the detailed stope design prior to excavation.

 

12.3.2General Design Guidelines – QTSC, East, West and QTSS

 

The QTSC, East, West and QTSS systems are generally narrower, singular lenses with little opportunity for transverse stoping. Longitudinal and Avoca stoping have been successfully used in these areas.

 

Deswik.SO stope dimensions include a 15m strike length with a minimum mining width of 5m. Level intervals are generally 30m but vary based on existing development. The level interval below 8721 level in QTSC has been reduced to 25m to enable blind uphole stoping to be undertaken as the primary mining method.

 

Stopes in the QTSS and West are planned to be filled with rock fill. Paste fill reticulation is currently underway for both the East and QTSC, although a combination of paste fill and rockfill is expected. QTSC Lower will be paste fill, with paste delivered to the stope via inclined boreholes delivered from the production level.

 

A major change to the mine design for QTSC has been adjustments to the stoping sequence, level interval, level access and backfill method. The level accesses have been moved from the existing central access to a northern access with the stoping front changing to a south to north front. The orebody has been split into two zones, QTSC Lower and QTSC Upper. QTSC Lower will consist of 25m level intervals utilising blind uphole stoping with cemented paste fill. QTSC Upper extraction will be based on 30m level intervals utilising a mix of uphole and downhole stoping, with a mix of paste fill and rockfill.

 

Similar to the redesign of QTSC, development of East, West and QTSS mining zones will be configured for longitudinal retreat, with end access, where necessary.

 

Where required, rib and island pillars have been included in the design to provide both localised support as well as to reduce dilution associated with rockfill. Rib pillar dimension are 5m along strike whilst island pillars are assumed to be 50% of rib pillars. All four zones (QTSC, East, West and QTSS) are predominantly based on a bottom-up (overhand) mining method, although as mentioned, in some cases like the QTSC Lower section will be top-down (underhand)

 

Crown pillars have also been included where mining under existing stopes with rock backfill or where the backfill type is unknown. In these instances, a 10m high crown pillar has been assumed.

 

12.3.3Depletion Guidelines

 

During the stope design work, stope As-builts were used to ensure that previously mined material was not included in the stope shape.

 

Stopes forecasted to be mined prior to the end of the reporting deadline (31 December 2022) for which As-built data did not exist, were depleted from the resource models, and were therefore excluded from the reportable 2022 Mineral Reserve.

 

Stopes have also been depleted against the development design to eliminate the potential for double accounting ore.

 

 

BEHRE DOLBEAR 

 

 

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12.4Modifying Factors

 

Modifying factors have been based on the historical stoping performance as captured in the CSA reconciliation database. A production reconciliation process is maintained at CSA, the results of which has been used to analyse stoping performance and to determine usable modifying factors for the 2022 Mineral Reserve.

 

The key modifying factors included in the estimation of the 2022 Mineral Reserve are outlined here and summarized in Table 12.1

 

•           Dilution – includes overbreak waste or low-grade mineralization from the hangingwall, footwall and crown. Overbreak from waste backfill has also been included. Dilution has been assumed at zero grade.

 

•           Ore Loss – includes underbreak from all walls, floor and the crown as well as loss due to operational reasons (ie: unable to bog, covered over by rilling backfill, etc).

 

•           An adjustment factor for both Dilution and Ore Loss was also included to account for high level design modifications. An adjustment factor has been included to convert the transverse stopes cuboidal shape into a stope shape with shoulders.

 

Table 12.1

 

CSA – 31 December 2022 Mineral Reserve Modifying Factors

 

Zone   Mining Method   Lens   Dilution   Underbreak   Adjustment   Ore Loss
QTSN   TRANSVERSE   JS and SN   13.7%   0.2%   4.4%   4.6%
QTSN   TRANSVERSE   K and F   17.4%   2.3%   4.4%   6.7%
QTSN   TRANSVERSE   O and S   15.5%   0.0%   4.4%   4.4%
QTSN   TRANSVERSE   Other   21.6%   1.6%   4.4%   6.0%
QTSN   LONGITUDINAL   All   17.7%   0.5%   4.0%   4.5%
QTSN   AVOCA   All   21.4%   10.8%       10.8%
QTSC   LONGITUDINAL   All   28.7%   4.5%       4.5%
QTSC   AVOCA   All   21.4%   10.8%       10.8%
EAST   LONGITUDINAL   All   28.7%   4.5%       4.5%
EAST   AVOCA   All   21.4%   10.8%       10.8%
WEST   LONGITUDINAL   All   28.7%   4.5%       4.5%
WEST   AVOCA   All   21.4%   10.8%       10.8%
QTSS   LONGITUDINAL   All   28.7%   4.5%       4.5%
QTSS   AVOCA   All   21.4%   10.8%       10.8%
ALL   DEVELOPMENT   All   0.0%   0.0%       0.0%
Notes                        

- Adjustment factors of 4.4% included as ore loss to account for transverse stope shoulders that remain insitu;

- Adjustment factor applied to QTSN Longitudinal stoping to allow for additional underbreak;

- Development overbreak and dilution have been applied to the design solids;

 

 

BEHRE DOLBEAR

 

 

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12.5Block Model

 

Separate block models were generated in Datamine for each of the systems. Models are constrained by S1 regional shear interpretations with all lenses and interpreted S1 structures filled with cells. Parent cell sizes reflect the KNA results. Model parameters are presented in Table 12.2.

 

Table 12.2

 

Block Model Dimensions by Ore System

 

Model   Dimension   Origin   Parent Block Size (m)   Sub-Block Size (m)   Number of Parent Blocks

QTS North

 

Easting 

 

5,630

 

5

 

1.25

 

117

    Northing   3,500   5   2.50   171
    Elevation   8,000   10   2.50   140
QTS South   Easting   6,100   5   1.25   52
    Northern   2,800   5   2.50   120
    Elevation   8,750   10   2.50   85
Eastern   Easting   5,800   5   1.25   70
    Northern   3,500   5   2.50   103
    Elevation   8,550   10   2.50   100
Western   Easting   5,630   5   1.25   38
    Northern   3,500   5   2.50   115
    Elevation   8,450   10   2.50   112
QTS Central   Easting   5,800   5   1.25   120
    Northern   3,200   5   2.50   140
    Elevation   8,000   10   2.50   125

 

12.6Cut-off Grade and Input Assumptions

 

The cut-off grade used was based on the economic evaluation of historical data, operating and capital costs assumptions and global Company macroeconomics, including revenue factors and price assumptions. The cut-off grade used is the grade above which the Mineral Reserves can be mined profitably.

 

12.6.1Revenue Factors and Price Assumptions

 

Price assumptions used in the Mineral Reserve estimate are applied as at 31 December 2022 and summarised as follows:

 

Copper Price - US$7,400/t (US$3.18/lb) - The Company elected to take a conservative approach to the estimation of the 2022 Mineral Reserve and has applied a 9% discount to the long-term, real, Broker Consensus copper price outlined in Section 16.3.

Silver Price – US$21.7/toz - The Company elected to adopt the long-term, real, Broker Consensus silver price outlined in Section 16.3.

A$/US$ Exchange Rate – 0.75 - The Company elected to take a conservative approach to the estimation of the 2022 Mineral Reserve and has applied a 4% discount to the long-term, real, Broker Consensus exchange rate outlined in Section 16.3.

 

12.6.2Input Parameters

 

The cost inputs for the December 2022 Mineral Reserve are based on the CSA’s internal budgeting process. With its long operating history, CSA has a thorough understanding of the mining, processing, G&A and other costs associated with the operation.

 

Key input parameters used in the calculation of cut-off grade and estimation of the Mineral Reserve are summarized in Table 12.3.

 

 

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Table 12.3

 

Summary of Mineral Reserve Input Parameters

 

Parameter  Unit  Value 
Copper Price  US$/t Cu   7,400 
Copper Revenue Factor  %   89 
Copper Recovery  %   97.5 
Silver Price  US$/toz   21.7 
Silver Revenue Factor  %   100 
Silver Recovery  %   80 
Mining Cost (excl. Capex)  A$/t milled   98 
Processing Cost  A$/t milled   20 
G&A Costs  A$/t milled   19 
Discount rate  %   8 
Inflation rate  %   2.1-2.5 

*Revenue factor accounts for all costs from mine gate (incl. freight, realization charges and offtake costs)

 

 

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12.6.3Metallurgical Recoveries

 

The metallurgical performance of the CSA plant is well understood and has generally remained very stable each year for the past 10 years, a selection of which is shown in Table 5.1. Copper recovery to concentrates from 2017 to 2021 averaged 98%, though this dropped to 92% in 2021 before returning to 98% in 2022. Recovery of silver, the only by-product, averages about 80%. Concentrate Cu grades averaged 26.1% Cu and approximately 80g/t Ag.

 

Ore has been processed at an onsite conventional flotation concentrator since circa 1965. This produces a concentrate which is sent off-site for smelting and refining to produce copper cathode.

 

The metallurgical process employed is based on well-tested technology.

 

Copper processing recoveries at the CSA concentrator are expected to average 97.5% over the life of the reserve. Silver recoveries are forecast at 80% over the same period.

 

12.6.4Stoping Cut-off Grade

 

The 2022 Mineral Reserve has been completed using Deswik.SO to derive the stopes using a design cut-off grade of 2.5% Cu (pre modifying factors). The design cut-off grade of 2.5% Cu has been partially driven by the geological wireframing process which has used a similar value.

 

Post modifying factors, a break-even cut-off grade of 2.2% Cu has been used to determine if stopes are economic and therefore included in the Mineral Reserve.

 

Silver revenue is excluded from the cut-off grade calculation. In general, the Ag revenue contributes approximately 2%-4% of the revenue each year so its exclusion does not have a material impact on the cut-off grade. If it were included, then the cut-off grade would be slightly lower but technically would then be a Cu equivalent cut-off. Mine planning practices at CSA are not set-up to operate with a Cu equivalent grade and due to the immaterial impact of the Ag revenue it was decided to keep the processes simple and exclude the Ag revenue. The exclusion of the Ag revenue does provide a small margin on the break-even cut-off grade to allow for inaccuracies in calculation inputs.

 

12.6.5Development Cut-off Grade

 

Both development designs and stope designs were evaluated against the various resource models. The calculated economic cut-off grade for development was estimated at 0.6% Cu although a minimum value of 1.0% Cu has been used as it is deemed to be the minimum grade that a geologist can reliably identify the ore visually.

 

12.7Mineral Reserve Estimate

 

The Mineral Reserve estimate for the CSA Mine is reported here in accordance with the SEC S-K 1300 regulations and are considered to be the economically mineable component of CSA’s Measure and Indicated Resources. The reported Inferred Mineral Resources are considered too speculative geologically to have the economic considerations applied to the