PERTH (miningweekly.com) – ASX-listed Oz Minerals has committed A$19-million to proceed to the next stage of earn-in at the West Musgrave nickel/copper project, in Western Australia.
To earn a 51% interest from fellow-listed Cassini Resources, Oz Minerals will proceed to a prefeasibility study (PFS) following a positive scoping study at the project area.
The scoping study estimated that a ten-million-tonne-a-year operation could deliver between 20 000 t/y and 25 000 t/y of nickel metal, between 25 000 t/y and 30 000 t/y of copper metal and a further 700 t/y to 1 000 t/y of cobalt metal over an initial mine life of eight years.
The project is estimated to require a capital investment of between A$730-million and A$800-million, with pre-tax average cash flows expected to reach between A$150-million and A$200-million during the first eight years of operation.
Oz Minerals CEO Andrew Cole said on Tuesday that the scoping study had confirmed the economic viability of the Nebo-Babel project, and had increased confidence in the potential of the project.
“This is an exciting new mineral province with attractive near-mine and district opportunities. Investment will be made during the prefeasibility to focus on inferred to indicated resource conversion for inclusion into the mining inventory, thereby extending mine life within the current preproduction capital profile.”
Cole said that the PFS would also focus on further improving the metallurgical recoveries at the project area.
Meanwhile, Cassini MD Richard Bevan told shareholders that the increase in scale of the West Musgrave project has opened up a range of possibilities beyond what the company had originally contemplated, with potential for further upside to be realised in the upcoming PFS.
“We have an initial eight years of mine life with a clear view on increasing this to beyond 15 years. The exploration programme will expand our understanding of the mineralisation at One Tree Hill and the Succoth copper deposit, as we pursue our goal of establishing a multi-decade mining operation.”