PERTH (miningweekly.com) – Copper/gold miner Oz Minerals has approved the development of the $916-million Carrapateena mine, in South Australia.

“The board’s decision represents the next stage in the company’s development. This is an exciting time for Oz Minerals,” said chairperson Rebecca McGrath, adding that the project would be a robust, cash generating asset with expansion potential that would set Oz Minerals up for further growth.

“This decision is an enabling step in realising our strategy to become a low-cost multi-asset copper miner delivering value for all stakeholders,” she said.

An updated prefeasibility study (PFS) has estimated that the project would mine at a rate of 4.25-million tonnes a year, producing an average of 65 000 t/y of copper and 67 000 oz/y of gold over a 20-year mine life.

All-in sustaining costs have been estimated at around $0.99/lb, while C1 cash costs have been estimated at $0.62/lb.

The project was expected to have a net present value (NPV) of about A$910-million and an internal rate of return of 20%.

“Our confidence in the economics, constructability and operability of the Carrapateena project as a long-life, low-cost mine has been further reinforced through the feasibility study phase,” said Oz Minerals CEO Andrew Cole.

“Carrapateena is now firmly established as a high-quality project in its own right with opportunities identified including expanding the existing cave footprint and accessing satellite deposits. It also serves as base for potential district development of nearby Fremantle Doctor and Khamsin. These future expansion options have been enabled by the improved mine design, but remain an upside to the current valuation.”

Cole noted that since the initial PFS, the project’s NPV had increased by 18%, to around A$910-million, owing to increased metal production, higher consensus commodity prices and the removal of the concentrate treatment plant costs.

“Over the past 12 months, additional testwork, including a continuous flotation pilot plant, has improved confidence in a consistent and predictable downgrade of impurities from ore to concentrate. We are confident from early discussions that Carrapateena concentrate will be a sought after product in the international concentrate market.”

Construction of Carrapateena will be progressed in two phases, with Phase 1 scheduled to start next month with the construction of enabling infrastructure, including the accommodation village and airstrip, and the continuing development of the dual access decline.

“The second phase, subject to mining lease approval, is scheduled to start in the second quarter of 2018. This phase includes construction of the processing plant and other above-ground infrastructure, installation of the underground materials handling system, construction of the tailings storage facility, western access road and power line,” Cole said.

He noted that the mining lease approvals process was continuing, and Oz Minerals was hoping to have the lease granted within the next six months.

The Carrapateena project is currently scheduled for commissioning in the fourth quarter of 2019.