PERTH (miningweekly.com) – Following a review of its Hillside copper project, in South Australia, ASX-listed Rex Minerals has reduced the capital cost of the proposed project, while increasing production expectations.

The prefeasibility study (PFS), which was completed last year, found that the Hillside project could deliver some 70 000 t/y of copper, over a 15-year mine life.

The PFS estimated that the Hillside project would require a capital investment of some A$900-million, with the bulk of the preproduction capital spent on the construction of a 15-million-ton-a-year processing plant, as well as various surface infrastructure.

Rex told shareholders on Wednesday that over the recent months, the company has focused on optimising the production profile and start-up capital costs for Hillside.

“The recent work has created substantial value to the Hillside project economics. The Hillside PFS created a solid base for the team at Rex to work from, and now we are starting to see important improvements to the mine plan as we progress the bankable feasibility study,” said MD Mark Parry.

The work completed as part of the mining schedule had focused on accessing some of the larger and more higher-grade sections at an earlier stage within the mine plan, allowing for higher-grade material to be delivered to the processing plant.

Based on this work, the average copper production during years three to ten was expected at some 80 000 t/y, with recovered gold of over 60 000 oz and 1.2-million ton of iron-ore concentrate.

This equated to an average copper equivalent production of over 115 000 t/y for the 15-year period.

Potential savings on the capital investment had also been identified from a number of sources compared with the PFS, and Parry said that the capital savings were expected to be “significant” and would reduce the amount of capital required to start production at Hillside.

“The extra revenue from higher grades and recoveries has substantially enhanced our ability to lock-in funding for Hillside, allowing us to progress meaningful discussions with a number of parties actively engaged in funding proposals for the project,” said Parry.

He added that there were few projects across the globe that could establish a large-scale and long-life openpit copper operation for less than A$1-billion.

“This is why Hillside is such a compelling investment option,” Parry said.

Based on achieving a complete finance package and all of the required approvals in 2013, Rex expected to start Hillside’s construction in 2014, with production start-up marked down for 2015.