JOHANNESBURG (miningweekly.com) – The Century zinc mine could be back in production by July next year, New Century said on Tuesday, announcing the outcomes of a feasibility study into the restart of operations at the mine near Mt Isa, which once was one of the world’s top producers of the metal.
The study estimates that the ASX-listed company will have to invest an initial A$50-million to get the mine to resume production at an initial throughput rate of eight-million tonnes a year.
Once in production, further ramp-up capital of A$63-million will be invested over a 15-month period to bring the operation into full production at 15-million tonnes a year.
The study states that the mine will have steady state production of 507 000 t/y of zinc concentrate at 52% zinc over an initial 6.3-year mine life from the Century tailings deposit.
The proposed production profile will allow Century to be once again among the top ten producers globally.
Based on the operating cost estimates, operations from the Century tailings deposit will be one of the lowest cost primary zinc operations in the world, with life-of-mine C1 costs at $0.38/lb and C3 costs at $0.50/lb.
The restart of the Century mine, based on tailings operations, has “outstanding commercial fundamentals”, and is estimated to generate more than A$1.76-billion in free cash flow over the initial tailings operation of 6.3 years.
The project has a projected net present value of A$1.31-billion and an internal rate of rate of 270%, which New Century MD Patrick Walta said was unmatched in the mining industry.
“It shows New Century is a significant investment opportunity,” he added.
The feasibility study is based on a newly declared proven ore reserve of 77.3-million tonnes at 3.1% zinc equivalent for the Century tailings deposit. This represents a 98% conversion from the previous measured resource.
New Century has defined two other in-situ deposits and has confirmed mineralisation at other areas, which it plans to include in an expansion feasibility study next year. The study will assess the potential for blending these resources into the tailings operations outlined under the feasibility study, potentially paving the way for increased metal production rates and mine life extension
Based on the positive outcome of the feasibility study, the New Century board has approved the immediate progression to the construction, refurbishment and re-commissioning phase, with the company to be fully funded to operations including working capital, through its current cash position and conditional debt facility.
The project has all the necessary permits and approvals in place to restart operations. New Century said an early works programme was under way and that formal plant refurbishment and recommissioning activities would start in January.
Concentrate offtake negotiations are also under way and are said to be on “highly favourable terms”.
New Century’s share price advanced by as much as 12% on Tuesday to an intraday high of A$1.48 a share, before retreating to A$1.43 a share in the late afternoon.