According to Havilah, this production would generate an annual operating surplus of $90 million, translating to a net present value of $237 million at a 10% discount rate.

Capital and operating cost estimates will be undertaken in the coming months. Chairman Bob Johnson told MiningNews.net Havilah had received initial cost estimates but would not make these public because they were apt to change with an increase in the resource size.

Havilah has outlined a measured resource of 80 million tonnes grading 0.9% copper equivalent with 56Mt at 1.04% copper equivalent contained within the proposed open pit.

Costs are expected to be favourable partly because the overburden is soft and doesn’t require blasting, and due to a low waste to ore ratio (1:4). Part of the strike, about 2km of the total 10km, can also mined using coal methods of dumping the waste into the open pit behind the advancing mine face.

Johnson said Havilah would consider a joint venture to bring the project online and had already been approached by majors. Havilah would not make a decision on whether it would develop Kalkaroo alone until it had completed further studies.

Further resource drilling at proposed satellite prospect, North Portia, is due to start in a month and would be conducted in conjunction with studies on the main Kalkaroo prospect.

Construction of the project would take about 18-24 months to complete, including all relevant permitting.

Cashflow from the Kalkaroo project would be used to fund further exploration in the area, Johnson said.

Havilah shares were at $1.66 in early afternoon trade.