The bankable feasibility study (“BFS”) focusing on the second stage expansion at Marampa is now considering the expansion of the existing Phase 1 processing facility instead of development of new processing and power plants previously outlined as Phase 2a in the April 2011 prefeasibility study. The BFS, which is expected to be completed in Q3 2012, will consider reconfiguration of the Phase 1 processing plant to incorporate additional crushing, grinding and gravity circuits in series with two stage WHIMS processing. This is expected to allow expansion of production at Marampa to 9Mtpa of 65% sinter concentrate. A second bankable feasibility study will consider a further expansion to 17Mtpa.
Phase 2 of the project as considered in the April 2011 prefeasibility study was a three stage process outlined below.
Phase 2a : low capex expansion
Initial expansion of 8Mtpa for an estimated capital cost of USD659m. The utilisation of softer weathered material and use of expanded existing haul road and barging capacity produces a low capital intensity of USD82/t of capacity. The low capital cost of Phase 2a provides London Mining with a number of options to finance the expansion.
Phase 2b : hard rock expansion
A further expansion of up to 8Mtpa of pellet feed, to a total of 16Mtpa, based on the mining and processing of the unweathered portion of the Marampa ore body for an estimated capital cost of USD1,187m. The higher capital intensity of USD148/t of capacity reflects the processing of harder ore as well as the construction of a pipeline, a coal fired power station and a new port.
Phase 2c : reconfiguration of Phase 2a to allow processing of hard rock
Addition of regrinding and flotation capacity to the sinter concentrate circuit to allow for processing of unweathered ore once soft weathered ore has been depleted. The estimated capital cost of 2c is USD523m, equivalent to USD65/t of capacity. Phase 2c will utilise Phase 2b logistics but require an expansion of the new port and power facilities.
The new production plan extends the life of Marampa until 2036. The production plan generates a post-tax NPV10 for the Marampa expansion of USD 2.2 billion with an IRR of 28.8%. This is based the assumption that 100% of product will be sold to China with price forecasts provided by AME Mineral Economics. Tax assumptions, including development incentives for the 10 year period effective January 2011 are based on recent discussions with the Government of Sierra Leone, which will be effective once ratified by Parliament.
Capital costs are reported below and have an accuracy range of - 25%/+30%
| USDm unless specified | Phase 2a | Phase 2b | Phase 2c |
| Mining | 101.4 | 71.3 | 0.0 |
| Process Plant | 229.7 | 374.1 | 115.7 |
| Site Infrastructure | 57.6 | 25.9 | 2.7 |
| Port Facilities | 10.4 | 129.9 | 100.8 |
| Power Infrastructure | 46.8 | 149.3 | 94.4 |
| Thofeyim Port | 23.3 | 0.0 | 0.0 |
| First Fills, Spares, Mobile Equip. | 17.8 | 48.9 | 8.6 |
| Indirects | 78.0 | 223.7 | 128.1 |
| Owner's costs and Contingencies | 93.9 | 163.7 | 73.1 |
| Total | 658.8 | 1186.7 | 523.4 |
| Capital Intensity (USD/t capacity) | 82 | 148 | 65 |
Operating costs have been produced with an accuracy of +/- 30% and are as follows:
Mining
| Expected Opex | Phase 2a | Phases 2a and 2b | Phases 2b and 2c | LOM |
| Mining | 7.3 | 6.3 | 8.1 | 7.6 |
| Processing (including pipeline) | 8.9 | 9.9 | 12.0 | 11.5 |
| Truck haulage | 3.3 | 1.7 | - | 0.5 |
| Port | 0.2 | 1.4 | 1.7 | 1.6 |
| Barges and transhipment | 5.4 | 5.9 | 5.4 | 5.5 |
| G&A | 2.9 | 1.9 | 1.9 | 1.9 |
| Total (USD/t) | 28.0 | 27.1 | 29.1 | 28.6 |
Mining will take place using a conventional open pit, mined by an owner operator fleet with mine scheduling planned to smooth annual variations of ROM ore content and stripping ratio. The pit is to be divided into six sectors or individual pits designated Masaboin North, Masaboin Central, Masaboin South, Campbelltown Ridge, Hospital Ridge and Ghafal. Waste rock will be hauled and dumped into different waste dumps near the pit perimeters within the existing mining licence. The Phase 2 production profile has been optimised to mine weathered ore first and create backfilling opportunities to accommodate waste and tailings. The strip ratio for Phase 2a will be 0.7 but this will increase to 1.4 in Phases 2b and 2c.
| Phase | Phase 1 | 2a | 2b | 2c | |
| First development | 2010 | 2012 | 2013 | 2017 | |
| First production | 2011 | 2014 | 2015 | 2021 | |
| Last production | 2018 | 2020 | 2036 | ||
| Ore type | Tailings Weathered | Weathered | Unweathered | ||
| Total ore | Mt | 59.0 | 102.6 | 665.1 | |
| Total waste | Mt | 15.3 | 69.2 | 930.6 | |
| LOM strip ratio | Waste/ore | 0.26 | 0.7 | 1.4 | |
| Mine life | Years | 7 | 7 | 21 | |
| Fe | % | 26.5 | 33.5 | 30.6 | |
| Mass recovery | % | 36 | 45.6 | 41.4 | |
| Concentrate | Mt | 21.1 | 46.8 | 275.5 | |
| Target production rate | Mtpa | 3.6 | 8 | 8 | 8 |
| Product type | Sinter concentrate | Sinter concentrate | Pellet feed | ||
Processing
The processing for the ore will use a combination of two stage grinding (SAG and ball), two stage (rougher and cleaner) wet high intensity magnetic separation ("WHIMS") and flotation.
Recent testwork completed by Ammtec and Outotec has shown that it is possible to produce a sinter concentrate from weathered ore using a simplified processing circuit. This will eliminate initial installation of several significant capital items that will be installed as part of Phase 2b to process unweathered ores. The required equipment will be retrofitted to the Phase 2a circuit as part of Phase 2c when the weathered ore is exhausted.
Pellet feed specifications from unweathered Marampa ore are unchanged, but the Phase 2a circuit is expected to produce a sinter concentrate with a similar specification to the Phase 1 concentrate.
Power
The power requirement for Phase 2a is 32MW, with power of 40MW to be provided by heavy fuel generators to be installed at the new port location. Power will be transmitted to Marampa via an overland transmission line following the pipeline route.
The power requirement for Phases 2b and 2c is 159MW. The heavy fuel oil station will be phased out and replaced with a lower cost coal fired power station with two 100MW turbines. Coal will be transported to the new port from ocean going transports by barge and to a dedicated coal unloading wharf and coal stockpile. The coal fired power station is the critical lead time item for Phase 2b.
Transport
Transport of the Phase 2a sinter concentrate will employ an expanded version of the logistics route planned for Phase 1, with an upgraded paved haul road to accommodate 200t road trains. Barge loading capacity will be increased by the use of a capesize floating storage vessel which will be moored at the transhipment location. Simulations have been run by Sandwell and show the viability of an expanded barging facility at Thofeyim.
A 42km overland pipeline will be constructed from the Marampa mine to the new port as part of Phase 2b and will be sized to accommodate the pellet feed production from Phases 2b and 2c.
Tailings
A number of options are being considered for the tailings storage facility. Backfilling into mined out areas is applied where possible with the remainder currently assumed to be disposed of outside the licence. A paste-fill storage facility within the confines of the existing licence will be considered as a trade-off study in the BFS.