Project / Tender - Complete Information

Development of Al Hadeetha Copper-Gold project, located in Dakhiliyah Governorate of Oman. It is being implemented by Al Hadeetha Resources LLC, locally incorporated company that is 70% owned by Alara Oman Operations Pty Ltd (a wholly owned subsidiary of Australian-based international mineral exploration company Alara Resources) and local Al Hadeetha Investments LLC. The joint venture (JV) is aiming to explore copper deposits and associated gold ore in three exploration licenses - Washihi, Mullaq and Al Ajal - covering a total surface area of around 105 square kilometers. Targeted for initial exploitation is the Washihi license, which is estimated to hold 14 million tons of potential resources. According to the JV, steady progress has been made in its application for the crucial mining license from Public Authority of Mining. Approvals for the venture have already been provided by Ministry of Housing and Public Authority for Electricity & Water. The JV is also in the process of selecting a major project financing arrangement - this includes consideration of both Sharia-compliant and conventional banking products. The project is targeted for launch in third quarter of 2017. 

The project has secured an additional ~USD15 million loan finance from existing lender Sohar Bank International, an amount previously intended to be raised via an offtake prepayment facility. 
The new finance will fund both the acquisition of Project-related consumables and other working capital requirements ahead of mine output revenue generation.
Civil construction at the Project’s 1MTPA1 copper processing plant is approximately three quarters complete, while mechanical, electrical, and plumbing (MEP) works have made substantial progress.
All construction works related to 33KV Substation works are complete. Internal testing is ongoing before final testing by MAZOON Electricity Co. for approval to energize.
The Project continues to maintain an excellent work-place safety record, with a total of 883,530 person-hours worked free of lost time injury.
The Project cold and hot commissioning phase is expected to commence from August 2023. The projected commercial production commencement date is 27 September 2023.

A host of major Project milestones have been achieved to date, including:
Primary crusher retaining wall steel erection and concreting (up to last lift)
Stockpile tunnel
Reagent storage building foundation and block work
Power substation
Grinding and flotation electrical room foundation, slabs and roof 
Concentrate and tailing thickener tank area (grade slab is ongoing).

 

Client has announced the completion of access road connecting the Al Wash-hi–Majaza copper-gold joint venture project (Project) site to the Izki-Sinaw Highway.

 

Construction of the Wash-hi Majaza Project’s high-tech, onsite geochemistry testing laboratory is complete, with the facility fully operational. The new geochemistry testing laboratory serves as a multifunctional testing facility. It houses stateof-art machinery and a team of highly competent and experienced technical staff which will together produce mineral samples that meet precise form, size and weight requirements. The equipment in place includes a wide range of cutting-edge technology and sophisticated analysis equipment, such as inductively coupled plasma optical emission spectroscopy (ICP-OES), energy dispersive X-ray fluorescence (EDXRF) spectrometry and wavelength dispersive X-ray fluorescence (WDXRF) spectroscopy. This equipment will deliver enhanced performance and test result reliability metrics, and ensure that appropriate, homogenised samples are available for required analysis work. The laboratory will undertake a range of activities such as:
Sample preparation, a necessary prerequisite before any tests can be performed
Sample storage 
Chemical and physical testing, including shatter index, density, water absorption, reactivity Index and miscellaneous physical properties analysis.
Sample preparation tasks undertaken in the laboratory will comprise a range of processes such as crushing, pulverization and grinding.

 

The Omani-Australian joint venture has announced the start of mining of high-grade copper sulphide ore at their Wash-hi Majaza mine in the Wilayat of Mudhaibi in North Al Sharqiyah Governorate. The development of Wash-hi Majaza mine is progressing well with stripping of overburden and oxide/gossan ore continuing in Wash-hi pit, at a current depth of 25 metres below surface. High-grade copper sulphide ore exposed at 430 SRL in the pit. Samples from blast holes between 433 SRL and 427 SRL analysed at an onsite laboratory indicated the presence of high-grade copper sulphide ore at shallow levels in the pit.

 

Construction activities commence at the existing sewage treatment plant located at the Haya Water site in the Al Mudhaibi township to supply Wash-hi Majaza Project with 1,200 cubic metres of water per day. The work, expected to be completed in the March 2023, is being undertaken as part of a public-private partnership which incorporates a water supply agreement. The works are being carried out in fulfillment of an agreement executed earlier this year between AHRL and Oman Water & Wastewater Services Company SAOC (OWWSC) to secure the critical process water supply for the duration of the Al Wash-hi Majaza Copper-Gold Project. Key highlights of the agreement are:
OWWSC will provide daily water supply to AHRL’s copper concentrator plant via its sewage treatment plants (STPs) located near the Project site.
The water will be priced at a fixed rate for the first five (5) years of the agreement. AHRL will upgrade the capacity of an STP near the Al Mudhaibi township to 1800 cubic metres per day.
AHRL’s investment in the STP upgrade will be recovered over the life of the agreement via water charge discounts.
Ownership of the upgraded STP will ultimately be transferred to OWWSC.
AHRL will transport the water from the STP to the Al Wash-hi Majaza Copper-Gold Project site.
The engineering, procurement and construction contract has been awarded to Khimji Ramdas Construction LLC. Design and drawing requirements were settled with Haya, major equipment approvals obtained and all process equipment ordered, with construction activities now underway.

 

Alara Resources Limited has announced that a range of construction building activities have substantially progressed at this project site. Work remains on track for completion in the June 2023. Key activities underway include electrical work currently being undertaken at the primary substation. The handover date for this integral part of the mine’s infrastructure is on December 25, 2022.

 

Alara has announced that key CITIC consignments have now arrived at site comprising the Project’s ball mill, LRS ball mill, SAG mill and crusher. As a package, they represent a major milestone in the Project’s development. The commissioning of the Al Wash-hi Majaza Copper-Gold Project is still expected to be completed in April 2023. Other project-critical equipment consignments from India, Turkey and the UAE are expected to arrive on site over coming weeks.

 

New construction fronts recently initiated include: Grinding electrical room • Flotation bay • Concentrate and tailing thickener foundations • Bulk reagents building.
New construction fronts to commence in the current week include: Flotation electrical room • Reagents bay • Regrind mill foundation.
Work in progress recently accelerated includes: • ROM pad grading to enable retaining wall works (critical path) • Grinding and classification tasks (critical path) • Stockpile foundation.
Electricity substation and key reinforced cement concrete (RCC) pours in progress. A number of the 50 equipment packages critical to Project delivery have recently arrived on site. The Mining Plan for the Year 0 area is currently being executed. Pre stripping mining started on 1 February 2022 in this area. Key mine development work including the haul road, drainage channels, settling ponds, topsoil stacking, waste dump and ROM pad have already been completed. Presently, the Mine workings of between 450 mRL and 440 mRL is in progress. The ultimate floor level at the end of the pre-stripping period is proposed at 410 mRL. The ramp designing to reach up to 410 mRL is now in progress. A topographic survey is being carried out by Gulf Testing Solutions. A volumetric calculation for excavated areas is conducted each month. The excavation quantities are reported monthly on a per-trip basis. These quantities are reconciled each quarter with the topographic survey excavated volume.Until 25 June 2022, a total of 1,431,393.00 tonnes of material had been removed, which included 24,625.00 tonnes of gossan material/oxidized ore for processing when infrastructure is complete. The gossan/oxidized ore and topsoil are stacked separately.

 

Further excellent progress has been made in this development with; Plant site civil works on track and bulk earth work nearing completion. Primary power sub-station and powerline contractor completing mobilisation; excavation for the capacitor bank foundation completed. Plant equipment procurement and delivery programme progressed. Omani Government exempted the Project from customs duty on imported equipment and components, reducing capital costs and saving time. Additional resourcing measures implemented to support Project schedule.

 

The Omani-Australian joint venture behind the development of a key copper-gold project in North Al Sharqiyah Governorate has announced a five-month delay in the scheduled completion of the venture to April 2023 from the original target date of around November 2022. In light of logistical challenges associated with the constrained shipping availability and delayed project engineering a project schedule review was conducted by the AHRL Project Management Consultant. The review determined that previously reported project completion in November 2022 is no longer achievable. The revised completion date determined by the Schedule Review is April 25, 2023, with mechanical completion of plant to occur by February 25, 2023. On the ground, however, key works linked to the development of the mine site are making headway.  Some of the equipment packages have already arrived at site Work is also progressing on the removal of the overburden to allow for the actual mining of the copper ore, located below ground, to be extracted.

Key factors impacting the previously reported project timeline are stated below:
An update to the estimated times of arrival of 19 equipment packages, now due between September and December 2022. 
The Construction contractor revising the start date for concrete works for grinding and classification area from 30 May to 30 June 2022.
The construction activity sequence contains overlapping activities between various disciplines and contractors, representing a schedule risk due to potential clashes and safety issues in co-ordinating changeovers

Bulk earth works well underway:
The bulk earth works (BEW) central to the Project’s initial plant and infrastructure construction activities are well underway and tracking to schedule. These works have three components: 
Crusher and stockpile area 
Processing plant area 
Water reservoir. In addition to these BEW activities, run-of-mine (ROM) pad levelling and associated padding work has also commenced and are almost complete. 

Plant and equipment has begun arriving at the Project site. Equipment which has arrived or is expected to reach at the Project site by July end 2022 includes: 
Mining workshop material from Kirby UAE (delivered) 
Regrinding Mill Liner Arrangement from Metso Outotec (delivered) 
Magnetic separator from Electrozavod, India (delivered)
ABB Electrical packages, first lot of 10 containers (delivered)
Flotation cells from Innovator, Poland (on vessel)
Filters from Matec (on vessel)
Semi-autogenous grinding (SAG) and ball mill from CITIC China (ETA July)
Crusher from CITIC China (ETA July) Prefabricated steel for the mining workshop and washing bay has arrived and construction of those facilities has commenced.
Development of the Wash-hi Majaza pit has been significantly advanced, with removal of overburden and oxide ore and developments of benches. Significantly, the Wash-hi Majaza copper deposit has been evaluated to hold over 16 million tonnes of copper resources and 10 million tonnes of mineable reserves. When operational, the project has the potential to generate cash flows of RO 200 million for a period of 10 years.

 

Al Hadeetha Resources LLC, a partnership of Al Hadeetha Investment of the Sultanate of Oman and Alara Resources Limited, an Australian mining firm, has reported continued progress in its construction and procurement activities at the Wash-hi Majaza copper-gold project in Al Mudhaibi Wilayat in North Al Sharqiyah Governorate. Alara owns a 51 per cent equity interest in the joint venture developing the project. After formal commissioning of pre-stripping of Wash-hi Majaza pit in February 2022, pre-production activities at mine site during the month continued to focus on the following: Topsoil over the first cut area of pit stockpiled and stored for post mine rehabilitation; First blast carried out under the supervision of Royal Oman Police; Excavation and transport of overburden and construction of waste rock dump platforms; Extraction of top copper oxide ore and separate storage; Excavation of 1200m long water diversion channel; and Construction of haul roads from the pit to waste dumping areas. Total cumulative capex stands at $53.6 million in February 2022 which accounts for about 70 per cent of total procurement packages. Manufacturing of all major items has commenced and inspections have been completed for many key electrical components, such as crushers and several more which are in the pipeline in March 2022. Additionally, general construction contracts have now been awarded and site preparatory works have begun.

 

Sohar International has signed an agreement with Al Hadeetha Resources LLC to provide financing to the tune of RO 19 million for its Wash-hi Majazah copper mining project. Oman Water and Wastewater Services Company (OWWSC) has also signed an agreement with Al Hadeetha Resources Company to supply treated water over the next 10 years. As part of the pact, Al Hadeetha Resources will invest in upgrading the capacity of Al Mudhaibi Sewage Treatment Plant (STP) to 1800 cubic metre per day. In the first phase, the Oman Water and Wastewater Services Company will supply the mining project with 300 cubic metres per day of treated water from Al Mudhaibi STP. After increasing the plant capacity, the volume of treated water supply will increase to 1200 cubic metres per day.

 

Planned engineering was progressed rapidly by Debisikha Associates and Progesys, with 63% of planned detailed engineering work completed.
The table below provides details of equipment already ordered: 
Package/Equipment details                              Supplier/Contractor
25 Air Blower                                                 Continental Industrie France
26 Plant Control System                                 CAS India
27a Workshop – Material (Prefab Building)       Kirby Kuwait
27b Workshop – Civil and MEP Design              DSA India
27c Workshop – Erection                                 Emmar Oman
28 Cooling Tower                                            BEC Oman

Camp construction: Construction of accommodation village is nearing completion. Catering and facility management contracts are also being awarded to make the camp liveable by mid-January 2022.

 

Alara has awarded Oman National Engineering & Investment Co. (S.A.O.G) (ONEIC) an engineering procurement and construction (EPC) contract to design and install powerlines, transformers and a primary substation required to supply and distribute requisite power to the project. The scope of work includes complete design, detailed engineering, sizing calculations, relay settings calculations, fault level calculations, manufacturing, shop testing, inspection and packing for seaworthy exports. In addition, ONEIC will be responsible for making shipments, insurance, delivery to the site, loading and unloading, erection, testing, pre-commissioning, initial operation, and commissioning for commercial operation as well as a maintenance guarantee for a period of 10-months from hand-over on an EPC turnkey basis as per Oman Electrical Standards. Mobilization and completion of the work is due within 10 months from the date of issue of a Letter of Authorization or the supplier being given site access, whichever is later. Specifications of the proposed powerline slave system (PSS) and powerlines are as follows:
Connection Load: 11.741 MW 
Substation Specs: 3x6 MVA, 33/11 kV Substation to be constructed inside MOH provided 2500 m2 plot 
Powerline Specs: 2No. X 33 kV feeders tapping from the existing feeders (Lizq 5L5) and (Al Khadhra 13L5) sourced from Mudhaibi Grid Powerline Length 2,400m total length each feeder (1,000 m underground cable + 700 m concrete pole overhead line + 700 m wooden pole overhead line). 
Control Specs: 5 x 33 kV and 11 x 11 kV SCADA controlled Auto-Reclosers to comply with Distribution System Security Standers (DSSS) as per SLD (Figure 1, below) 2 x 33 kV ABS at the tapping points 
* Prefabricated camp structures have arrived at the village accommodation site.

 

The placement of major plant and equipment procurement orders and the ready availability of key OEM equipment specifications has enabled the detailed engineering phase of the Project to be fast-tracked. The Company’s engineering consultants Debisikha Associates and Progesys are geared up for rapid progress in delivering on their work program. Al Hadeetha Resources LLC has released the tender document for the project construction contract to potential bidders in Oman.
Package/Equipment details                                                 Supplier/Contractor
18 Dust Collector                                                                    Stratgem Projects India
19 Powerlines                                                                         ONEIC Oman
20 Agitator                                                                             Afromix SA
21 Sampling and Analizing System                                           Metso Outotec USA
22 Air Compressor                                                                  Bin Salim Oman
23 Froth, Slurry and Sump Pumps                                            Metso Outotec Turkey
24 Floatation Cells                                                                   Innovator Polland

After a recent cyclone caused a temporary setback to planned construction, foundation work activities for the accommodation village are now nearing completion. Prefabricated camp structures are expected to arrive in next few days. The ground survey and initial ground levelling for the Project access road, connecting the site with nearby highways, has now also been completed.

 

Client has announced the formal commencement of construction work on a major copper-gold project in the Washihi-Majazza area of Al Mudhaibi Wilayat in the Sultanate. The project, which heralds a new era in copper ore exploration and processing in the Sultanate, involves the construction of an open pit mine, the installation of a one million tons per annum (MTPA) copper concentrator plant and other associated infrastructure. The project will offer several socioeconomic benefits in the Sultanate such as direct employment, local skill development, opportunities for local supplier/vendors, infrastructural development like electricity and roads in the region. Following the receipt of approvals from the local municipality, the contractor began mobilising its team and equipment at the mine site. A makeshift village is being constructed to house the project’s 325- strong workforce representing construction, mining and plant operation crews. In addition, contracts for equipment purchases and other support infrastructure totaling $17.8 million have been awarded.

Package/Equipment details                              Supplier/Contractor
1 Ball Mill, SAG Mill, Crusher                            CITIC China
2 Rock Breaker                                               Metso-OT Finland
3 Apron Feeder                                               L&T India
4 Pan Feeders                                                 Metso-OT India
5 Magnetic Separators                                     Electro Zavod India
6 Accommodation Cabins Refurbished               Al Tasnim Oman
7 Accommodation Camp Construction               Al Naba Infrastructure Oman
8 New Cabins - Dining, Offices etc.                   Al Rehwan Oman
9 Fencing                                                        Al Naba Infrastructure Oman
10 Conveyors                                                  Al Tasnim Oman
11 Belt Weigher and Vibrating Screens              Schenck India
12 Hydro cyclones                                           Weir UAE
13 Conveyor safety switches                            Smart SAA India
14 Construction of Access Road                        C & C Oman
15 Pressure Filters                                           Matec Italy
16 Regrinding Mill                                            Metso Outotec USA
17 Electrical Packages - Transformers, Panels, Motors, Telecom ABB India
The project construction period is estimated to be 18 months with production of copper concentrates commencing by the last quarter of 2022.

 

The front-end engineering design has been completed for the planned copper plant. The copper plant package is estimated to be worth $50m and is one of the three main packages for the planned mine development across the Al-Ajal, Washihi and Mullaq licenses. Alara Resources is yet to issue the main contract tender for the copper plant package. The main contract bids for sewage treatment plant are currently under evaluation.

 

A ground-breaking ceremony was held under COVID-19 protocols at the project site for the accommodation village in preparation for the construction of mine site infrastructure is the most important milestone. The prefabricated accommodation village (Village) is designed to house 325 personnel from the construction, mining and plant operation crews, facilities at which include:
The Village is designed for a minimum life of 12 years.
Dining halls to serve different cuisines and categories of staff, including nationals and expats.
Two recreation halls and two gymnasiums.
Prayer hall (Mosque)
First-aid facilities staffed with a qualified nurse, supported by a standby ambulance.
A field for football, cricket and other sports.
Parking, firefighting arrangements, water supply, sewage handling, general store and other amenities required to support Village life.
Offices for mining consultants, mining contractors and AHRL staff, with the capacity for approx.100 staff.
Fully equipped laboratory for in-house testing of all mining products.
The Village was planned with all due regard to Sharia Law, the religious law of Islam, reflected principally in the provision of suitable facilities for prayer, as well as for the appropriate preparation and quality of food.
The forecast construction schedule has a build period of three months, with final completion – with the full complement of staff housed and all facilities operating – within twelve months of commencement.
Alara looks forward to updating investors on ongoing progress to completion of the copper-gold mining-processing facility at the Al Wash-hi Majaza project scheduled for third quarter calendar 2022.

 

The Omani Ministry of Housing (MoH) approved the grant of additional land around the Wash-hi Majaza Mining Licence and permission to construct the processing plant within the license area. Executed lease agreements with MoH provide access to 71,145 sq m of land within and adjacent to 3 sq km Mining Licence. These agreements pave the way to kick start the construction of project facilities such as the accommodation camp, project construction offices and other utility structures supporting the copper processing plant to be constructed at the project site. The land-holding certificates also permit initiating the process of establishing communication towers and power substations necessary for project construction.

 

Engineering progress was 2.5% and AHRL procurement progress, which covers commercial evaluation and award completions for the period, is 18.3%
Negotiations are continuing with Haya Water to reach an agreement to meet Project water requirements through their sewage treatment plants located in Al Mudhaibi and Ibra. Planning to construct a pipeline from Mudhaibi is currently on hold and water supply via tankers owned by local communities is being contemplated. 
Approvals from Mazoon Electricity Company (MZEC) and Government departments, including the Ministry of Housing (MOH), are in progress after finalising the route. Tendering has started and more than seven bidders confirmed their interest to bid for the line and PSS construction, with seven of them having inspected the site and preparing to send their technical and financial quotations after receiving the required information about the Al Mudhaibi grid from MZEC. In parallel, Monenco started discussions with MZEC to prepare the connection and supply agreements where the required information is being prepared currently.
All approvals have been granted including MTC and ROP and the Project is ready for construction commencement after contract award. Tender documents have been completed and floated and CS shared for approval from stockholders.
The required area for Project facilities has been decreased from 2.4M m2 to 71,000 m2. The application to MOH has been submitted, and the request from MOH in Muscat to MOH in Al Mudhaibi has been sent to start the process of issuing the contracts. The Al Mudhaibi MOH has completed area verifications and sent the approval back to Muscat MOH on 9 March 2021. The application file has been reviewed and is proceeding in MOH in Muscat and being raised to the Minister’s Secretary for approval and a contract issue permit to Mudhaibi MOH. Approval is expected to be sent to Mudhaibi by 27 April 2021. After paying the land lease fee, the land use contracts are expected to be ready by 13 May 2021.

 

Al Tasnim Infrastructure LLC became a substantial shareholder in the Company after executing an agreement to acquire 70,542,924 ordinary shares in November 2020. Al Tasnim Infrastructure is one of Alara’s two joint venture partners the Al Hadeetha Copper-Gold Project.  Project Engineering by Debishikha Associates (DSA) under supervision of PMC (Progesys) continued during the quarter. Cumulative engineering progress was 27.8%.
RFQs prepared & floated to various vendors for the following packages –
• SAG & BALL Mills
• Jaw Crushers
• Conveyor package
• Rock Breaker
• Apron feeder
• Pan Feeder
• Magnetic Separators
• Belt Weigher
• Hydro – cyclones
• Screens
• 11 KV Cables
• Camp Facilities, Admin Offices, Security Offices & Laboratory Building
• Approach Road Works
• Site Sampling Facilities
LOI Placed –
• SAG & BALL Mills
• Jaw Crushers
The balance of the required equipment is currently under commercial finalization. Testing was ongoing at Wardell Armstrong International during the 4th Quarter. This test work is basically to revalidate the earlier test work carried out by ALS Ammtec (ALS) and to reconfirm the equipment sizes and selection criteria and most importantly to configure the flotation circuit.

 

Following a short pandemic-related hiatus, the Project Management Consultancy Agreement with Progesys has been reactivated. Progesys will work with the Al Hadeetha Project team to oversee and direct the engineering, procurement and construction (EPC) of a 1Mtpa copper concentrator on the project site.  The project development agreement with Progesys is based on the FIDIC Model Services. Agreement and covers the entire project period through to commissioning. The contract value is within the amount budgeted and includes payments in cash and shares. Under the agreement, any shares issued to Progesys will be held in escrow until the contract is completed. Debisikha Associates, India (Debisikha) have been engaged for:
Review of the existing and new metallurgical test reports
Completion of FEED and preparation of technical specifications for all bought out items
Technical review of vendor bids and recommendations
Review of final vendor drawings submitted
Completion of detailed engineering for plant and infrastructure facilities (excluding geo-technical studies)
Preparation of technical bid documents for the onsite construction work
Technical bid analysis for the construction works
Expediting the vendor manufacturing process and delivery schedule
Inspection and co-ordination of any items to be sourced from India
Commissioning assistance for 3 months.
The planned drilling program performed by Alara Resources LLC is now complete. Over 3400m was drilled in 22 diamond core holes to generate sufficient drill core from the Wash-hi deposit for metallurgical test work and other project-related requirements.
Previous metallurgical test work carried out as a part of the Feasibility Study produced positive results. It was also planned at the time that additional test work would be conducted at a later date, to revalidate the earlier findings and to provide additional inputs for the detailed engineering design phase.
Mr. Gary Patrick, MAusIMM, CP (Met) has been appointed to oversee the metallurgical test work program, to be carried out by Wardell Armstrong International, UK. ALS Labs has been engaged to conduct the assays on the core intervals to enable selection and preparation of the metallurgical composites. Results of the test work program are expected to be available by next quarter, in time to be utilised by the engineering consultant Debisikha for detailed plant engineering design, and for preparing the procurement bid packages for the major equipment packages; including crushing, grinding and flotation equipment.
Al Hadeetha Resources LLC has executed a mine operation and ore grade management service agreement with Bedrock Mineral Resources Consulting (BMRC). BMRC will provide key resources and software required for all day to day mine management activities related to ore and waste production, mine planning, grade control and statutory JORC reporting.

 

Alara JV company Al Hadeetha Resources LLC (AHRL) halted work with CGM as project EPC contractor due to the impacts of Covid-19, including airport closure, domestic travel restrictions, shipping and other related concerns. The Company has since investigated having the engineering outsourced, procurement ownermanaged and the construction contractor managed by an AHRL team, together with Project Management Consultant, Progesys. AHRL is in discussions with Progesys to extend its contract by four months. Following the entry of a preliminary commercial agreement in the previous quarter, AHRL and Alara Resources LLC (ARL) agreed terms for a ten-year mining contract by way of a letter of intent (LOI). Execution of this mining contract is expected to follow short. Drilling has continued at the project site to obtain metallurgical samples for processing plant design work. Drilling progress has continued throughout the period with 2000m of HQ/NQ samples collected with 98% core recovery. Potential for further optimisation of copper recoveries may also be investigated. ALS Global has been engaged to conduct the geochemical analysis and Wardell Armstrong Lab in UK will conduct the metallurgical test work.  Project financials remaining strong and first production scheduled for Q1 2022.

 

Alara Resources Limited announced that Al Hadeetha Resources LLC (Al Hadeetha) 1 has accepted a club finance offer from Bank Nizwa for OMR 20 million. Key terms of the finance agreement are: Bank Nizwa will invest OMR 10m into Al Hadeetha for development of the Washihi Copper Project (the Project) along with Alizz Bank’s OMR 10m investment. The investment will be applied principally to support construction of mine-site infrastructure for a 1mtpa copper processing plant3 at the Project. The profit rate is a minimum of 6.75% per annum4 , reviewable annually. The finance amount is repayable in 28 quarterly instalments with a three-year grace period applying to principal payments (total ten-year term). The investment will be secured over Al Hadeetha’s mining licence and related assets, along with guarantees from shareholders of Al Hadeetha.

 

Al Hadeetha Resources LLC (Al Hadeetha) has accepted an offer from Alizz Islamic Bank (Alizz) for finance of OMR 10 million. The funds will be used to procure major equipment for the copper processing plant at Wash-hi which remains on track to become the next producer of copper concentrate in the Gulf. The copper-gold project is expected to come into operation by Q1 of 2021.

 

Client has announced that McNally Bharat Engineering Company Limited (MBE) experienced delays in completing basic and detailed engineering for a 1 MTPA copper concentration plant and associated infrastructure. While waiting for MBE to complete the work, the Company has entered an MOU with another experienced service provider for project execution under a full EPC contract - China National Geological & Mining Corporation. Management is pursuing both options to avoid further project delays and achieve targeted production by end of Q1 2021.

 

Construction works are currently in progress on this scheme.

 

The engineering contract awarded to McNally Bharat Engineering Company Limited (MBE) is progressing largely as per schedule. 78% of process designs had been prepared at the end of Q2 and Progesys2 confirmed the overall FEED schedule would be met. MBE has also provided deliverables for the construction package on time. Earlier this month, the Board of Al Hadeetha Resources LLC approved the issuance of purchase orders for major equipment and long-lead items. Alara Resources LLC (ARL) has been awarded a services contract by Al Hadeetha Resources LLC (AHRL) in connection with the construction of the 1mtpa copper processing plant at the Washihi - Mazzaza project site. The contract includes drilling and geotechnical services and is valued at US$600,000. ARL has also submitted a proposal for mining services to AHRL.

 

Client has secured RO 26 million (€60 million) in in investment from SAMA Global Investment, headquartered in Doha, Qatar. The funds would be used for the development of the Washihi-Mazzaza copper project located in North Al Sharqiyah Governorate in Oman.The investment will be applied principally to fund construction of mine-site infrastructure for a 1 million tonne per annum processing plant at the project. It also utilise the funds to develop other projects as mutually agreed. Under the terms of the agreement, the investment will be secured over Al Hadeetha’s mining licence and related assets. Following a 24-month grace period, Al Hadeetha will pay in quarterly instalments a fee equal to 1.5 per cent per annum of the total investment amount over a six-year term, making a total of eight-year term agreement. 

Al Hadeetha Resources has selected India’s McNally Bharat Engineering Company Limited (MBE) in a competitive tender for the contract. The scope of work for MBE is progressing with front-end project engineering, Geo-technical drilling and preparation of detailed designs for plant and other site infrastructure. Finalized plant layout, process flow diagram, single-line diagram and the piping and instrumentation diagram (P&ID) are due for completion in Q2, 2019, with detailed engineering due in early Q3. The appointment also provides for an extended work scope including procurement for the proposed Al Hadeetha 1 Mtpa copper concentrator plant and related infrastructure. 

The main contract has not yet been awarded on this development. 

The EPC contract is expected to be awarded in Q4, 2018. 

A contract for the construction and operation of this plant is due to be awarded shortly. A number of specialist mining contractors are competing for the EPC contract. The EPC contractor will also operate the plant over the 10-year life of the copper mine. Canadian-based industrial consultancy Progesys has been appointed as the Project Management Consultant for the overall integrated development. Progesys will also oversee the functions of the Mining Contractor, who will be responsible for the mining fleet, as well as a host of other consultants tasked with ensuring compliance with environmental and regulatory requirements. Output of copper concentrate from the concentrator plant is estimated at 30,000 tonnes per annum. 

The Public Authority for Mining (PAM) has announced the start of this project following the formal award of a mining license to Al Hadeetha Resources. The mining is slated to cost OMR25 million, providing a cash flow of up to OMR200 million for an initial ten years. 

Client has received approvals for the mining activities from Royal Oman Police (ROP), as well as the ministries of Defence, Heritage and Culture, Tourism, Environment and Climate Affairs, Regional Municipalities & Water Resources, Interior, and Housing. A final mining licence is now awaited from the Public Authority for Mining (PAM) before mining activities can commence in earnest at the site. Output of copper concentrate from the Washihi deposits is projected at around 350,000 tonnes over 10 years, yielding approximately 80,000 tonnes of copper metal if smelting is also undertaken locally. The Washihi copper resource is large enough to support the construction of a one million-tonnes per annum capacity copper concentrator. Pending the receipt of the mining licence, Al Hadeetha Resources has commenced preliminary activities, which include the construction of a new core yard and storage facilities near the site. Additionally, the joint venture has shortlisted two bidders for the Engineering — Procurement — Construction (EPC) phase of the project. Al Hadeetha Resources is ready to issue the EPC contract as soon as final agreement is reached. The company and its joint venture partner are also finalizing financing terms based on LOIs renewed last year. 

Client announced that its local joint venture company, Al Hadeetha Resources, has been issued an ‘Economic Activities License’ authorizing the mining of non-ferrous metal ores, including copper, which brings it a step closer in its longstanding quest to commence commercial mining activities in Oman. It will work with the Public Authority for Mining (PAM) to secure the all-important license to formally launch work on the Washihi project. It is also looking to finalise project financing terms on the back of this important licensing milestone. To this end, it has progressed the preparation of, among other things, a detailed waste management plan and water management plan. 

Client plans to start construction of the copper concentrate plant by end of this year. This is subject to the company getting a mining license from the Public Authority for Mining. 

Al Hadeetha Resources is considering a potential public private partnership with Haya Water for setting up a sewage treatment plant (STP). Haya Water indicated it had land adjoining an existing STP that could be used to construct an additional STP to supply the necessary amount of water to the Al Hadeetha project. The firm has received three quotations for the construction of the new STP and a 25-km pipeline. Two of the quotations fall within the existing pipeline capex budget, inclusive of the STP. The third is above budget, but came with a financing option attached. The STP will be based around the Washihi copper-gold deposit, which contains a JORC resource of 14.1 million tonnes at 80% copper and 18 gm per tonne gold. All necessary details for MECA approval have been submitted. These included the environment impact assessment reports for the Washihi exploration license, Block 7 exploration license. The Undersecretary has sought assistance of the PAM for environmental clearance. 

Client is understood to have received no-objections from the Ministry of Tourism and Ministry of Environment & Climate Affairs with regard to mining license application. Letters to this effect have been forwarded to the Public Authority for Mining (PAM), which has acknowledged the park enhancement plan submitted early last month, with no further queries being raised on this issue. The Company is also advised that the Ministry of Environment has sent a letter of no-objection to PAM and the Company anticipates receiving confirmation of the same from PAM this week. In parallel with licensing activities, enhancements to Al Hadeetha Copper Project are continuing. The Company is discussing a potential Public Private Partnership (PPP) with Haya Water for the sourcing of waste water, as well as the lease of land for construction of a sewage treatment plant 25 kilometers from Al Hadeetha project site. This PPP offers the following benefits: 1) reduced construction time for the water pipeline; 2) trucking water becomes a more attractive contingency option; and 3) positive Corporate Social Responsibility impact. 

Client has announced that its local subsidiary, Alara Oman Operations Pty Ltd, has signed an off-take agreement with Statdrome Pte Ltd for the supply of copper concentrate from this project. This deal marks further step-up for the client as it prepares to kick-off mining operations in the Sultanate, once a mining license is issued by the Public Authority for Mining. Under the agreement, annual concentrate production of approximately 35,000 wmt (wet metric tons) will be shipped at regular intervals from Sohar Port. There is also a possibility of supplying the material to Omani smelter in case it restarts. According to the client, the agreement also includes a pre-payment of $6 million to assist in funding project construction costs and mine start-up, and will be drawn down in installments during the project construction phase, starting once the mining license is issued. The agreement forms an important part in financing and development of the mine and processing plant, and has been completed in discussion with bank representatives. 

Client has signed a memorandum of understanding (MoU) with Mining Development Oman (MDO) for this scheme. MDO is a new holding company established to invest in large-scale commercial mining and downstream processing schemes, as well as transport and logistics infrastructure. 

The Public Authority for Mining has completed a review of the feasibility study and recommenced licensing for this project. The client and other authorities held a meeting recently to discuss the advancement of this development and expedite the issuance of project mining license. The meeting considered the project's socioeconomic and environmental impact on the surrounding community, including employment, proximity to housing and a small park area located near the project site. It has been agreed that the client will promptly generate a park enhancement plan and submit it to the Ministry of Tourism. 

Client has finalized terms to appoint a project management company to supervise and administer the development of this project. The proposed agreement covers the entire project period through to commissioning and contract execution is expected to occur this week. Client is also currently finalizing terms for a 10-year off-take agreement, including pre-payments, which may be drawn down during construction and commissioning. Issuing of the pending mining license remains a significant milestone and catalyst for the client. 

Client is in the process of appointing a project management company that will be engaged for supervision and administration of the EPC contract on this scheme. The proposed agreement is based on FIDIC Model Services Agreement and covers the entire project through to commissioning. The contract value is within the amount budgeted and includes payments in cash and shares. A benefit of incorporating shares into the payment plan is that the interests of the client and the project management company will remain closely aligned throughout the construction and commissioning period. The share issue price shall be no less than the average trading value over (30) days following announcement of the mining license issue. Under the agreement, any shares issued to the project management company will be held in escrow until the contract is completed. The contract execution is expected to occur this week. Client is also currently finalizing terms for a 10-year, off-take agreement, including prepayments, which may be drawn down during construction and commissioning. 

Client plans to start commercial production of copper concentrate from this mine by the first quarter of 2018. A contract for developing the mine and building a copper concentration plant is expected to be awarded after getting the license. Construction of the copper concentration plant will take (12) months after awarding the contract. Client anticipates a copper concentration production to the tune of 30,000 tons per annum, from as much as 1 million ore. 

Construction of the copper concentrator and other site infrastructure is planned to commence during 1st quarter of 2017. Client has also identified project financing options in excess of the forecast capex, having already invested $9 million with its joint venture partner. Financing is subject to the issuance of a mining license and the client is not aware of any reason why the license could not be issued in order to meet first production, scheduled for 2018. Recent infill drill results are currently being incorporated into a revised resource model, with an update expected this week. 

Client is to have a meeting with Public Authority of Mining in late August 2016. This is a key step towards the award of Washihi mining license. The copper-gold project management proposals to being Washihi into operation are currently being assessed with contract awards expected in the last quarter of this year. 

Client has concluded the drilling program at Washihi where there is high grade copper, gold and silver mineralization. Six boreholes of between depths of 80 and 244 meters have been drilled in targeted regions. Multi-element analysis of samples from the drilling program has been completed and the results are being incorporated into the Washihi resource model to be announced next week. A total of (581) samples were submitted to ALS Jeddah for chemical analysis. Results of 75 samples were reported on earlier and were positive. The drill hole primary mineralized intersections have a 0.2% of copper cut-off grade, which is also a reasonable economic cut-off to delineate potential mineralization. Client has submitted a mining license application covering the Washihi deposit, which has passed a number of approval stages. It has already received approvals from the Ministry of Housing and Ministry of Water & Electricity. 

Client is in the process of raising up to $1.45 million in order to advance the execution of this project. The rights issue trading ends on July 26, 2016 and new shares are to be issued on August 09, 2016. According to the company's prospects, funds raised from the rights issue will be used primarily to help secure a mining license for by providing bridge finance to meet pre-operating expenses prior to commencement of mine and plant construction. 

Client is expecting final assays and analysis from two in-fill holes by the end of this month. Initial results from the in-fill drilling has discovered more high-grade copper and gold mineralization, including 5 meters at 3.29% copper, 5.04gm per tonne (g/t) gold, 0.22% zinc and 21.72 g/t silver. These drill holes have confirmed the expected continuity of copper mineralization and a new massive sulphide intersection within the Washihi deposit. A 3-hole in-fill drill program is currently on at the site to increase the size of the resource. 

Client is planning to start commercial development/construction of this project by the end of 2016. However, this will be subject to the company getting a mining license and it will take a year to start commercial production. Al Hadeetha Resources has invested over $9 million in the development of this scheme so far. 

Client has announced the discovery of additional high-grade copper and gold mineralization from the first three in-fill holes drilled outside the current resource envelope in this project. The drilling aims, among other things, to bring more of Al Hadeetha's inferred resource at Washihi into an indicated category as well as expand the resource. The current Washihi resource contains 14.1 million tons at 0.80% copper and 0.18 g/t gold. The drill results provide further impetus to the recently completed feasibility study, which estimates a free cash flow of $109.5 million over 10 years in a conservative base case scenario.