Anax Metals eyes road base products revenue generated from Whim Creek waste

Anax Metals eyes potential for near-term revenue by processing existing Whim Creek waste rock into road base/aggregates
Company working with civil contractor Castle Civil on commercial-scale trial to produce material suitable for blending into road base products
Work will run parallel with company’s efforts to develop Whim Creek into a regional copper and base metals processing hub

Special Report: Whim Creek project might be central to Anax Metals’ plans to develop a copper and base metals hub in WA’s Pilbara region, but it could also deliver a near-term revenue opportunity.

The company is working with Castle Civil to pursue an opportunity to generate near-term revenue through the production of road base / aggregates from existing waste rock at the historical mine.

Anax Metals (ASX:ANX) is currently conducting a commercial-scale trial to produce material suitable for blending to road base products, leveraging the advantage of the project being fully permitted for mining and processing activities and its central location in the region.

The company added that this business would be complementary to its planned regional copper and base metals hub, which remains its primary focus.

Whim Creek itself is expected to deliver attractive economics under a definitive feasibility study released in April 2023, which outlined $340m in free cash-flow along with pre-tax NPV7 and IRR of $224m and 54%.

Pre-production capex is a modest $71m thanks to the existing infrastructure including the fully permitted heap leach facility that is expected to produce copper cathode and zinc sulphate from the second year out using mined low-grade ore.

However, the company is keen to really fill its processing capacity and is studying the potential for the project to build a 20,000tpa copper equivalent hub by treating its neighbours’ ore.

The first stage of this is a scoping study with 20% JV partner Develop Global (ASX:DVP) into the feasibility of transporting oxide ores from DVP’s 100%-owned Sulphur Springs deposit to Whim Creek for heap leaching into saleable copper and zinc products.

The commercial scale waste rock to road base product trial. Pic: Anax Metals

Maximising value

“Anax is pleased to be pursuing an early-stage revenue opportunity for Whim Creek, while we advance growth initiatives to establish the project as a production hub for the sustainable development of copper and base metals projects in the Pilbara,” managing director Geoff Laing said.

“This innovative approach to repurposing waste materials underlines our commitment to maximise shareholder value through diversified revenue streams from the project.

“Since acquiring Whim Creek, the Anax team has committed significant resources to improving the site, including key upgrade works, resulting in revoking the Environmental Protection Notice and securing operating permits for the planned mining operation.

“Repurposing the existing waste rock dumps is another positive initiative that can potentially deliver economic and environmental benefits for us and the region.”

Repurposing waste rock

ANX is now investigating the potential to efficiently produce road base, fill and aggregate materials using the readily available mined and stacked waste rock and existing site infrastructure, which includes the process plant, water and power systems, offices, roads, and a camp.

It has made applications to the Department of Energy, Mines and Industrial Regulation and Safety (DMIRS) and the Department of Water and Environment Regulations (DWER) for relevant amendments to the existing permits to facilitate the repurposing of existing waste rock.

Should this opportunity proceed, the company will distribute potential products via the northwest highway, which runs directly past the Whim Creek site.

Some 4 million tonnes of waste rock from historical Whim Creek mining, which ceased in 2009, was placed into a waste rock landform (WRL).

The company is currently selecting a small volume of accessible material from the WRL with processing undertaken via mobile crushing and screening plant.

Crushed and screened products have been sampled and blended to prepare material suitable for subbase construction activities.

The rock processing, preparation sampling and blending have been undertaken by Castle Civil, a specialist civil contractor with extensive knowledge of road construction requirements and aggregate preparation under a trial agreement that ends on October 31, 2024.

Should this be successful, the two companies may then negotiate the commercial terms for an agreement, which will require securing final approvals for the waste rock crushing, screening, and associated activities.

Contract arrangements for extracting and processing the waste rock and hauling the product will also need to be completed along with securing product sales contracts.

This article was developed in collaboration with Anax Metals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.