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Spence Growth Option project, Chile

18th August 2017

By: Creamer Media Reporter

     

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Name of the Project
Spence Growth Option (SGO) project.

Location
Spence copper mine, in the Atacama desert, northern Chile.

Client
BHP

Project Description
The SGO project will extend the mine life of the Spence opencut copper mine by more than 50 years. The project will convert 1.3-billion tonnes of measured and indicated mineral resources to hypogene sulphide ore reserves.

The project includes the design, engineering and construction of a conventional large-scale sulphide concentrator for copper and molybdenum with a 95 000 t/d nominal ore throughput capacity.

In addition, SGO will require a new 1 000 ℓ a second desalination plant, located at Mejillones bay, and a 154 km water pipeline from the plant to the Spence mine site. These will be built and operated by a third party under a build, own, operate and transfer contract, which has been separately awarded, with nominal, undiscounted value of lease payment obligations over the 20-year contract term totalling $1.43-billion.

In the first ten years of operation, incremental production from SGO will be about 185 000 t/y of payable copper in concentrate and 4 000 t/y of payable molybdenum.

Jobs to be Created
5 000 during the construction phase.

Net Present Value/Internal Rate of Return
The project has an expected internal rate of return of 16% and an expected payback period of 4.5 years from first production.

Value
$2.46-billion.

Duration
First production is expected in the 2021 financial year.

Latest Developments
BHP approved the capital expenditure for the SGO project in August 2017. CEO Andrew Mackenzie said that the project supported BHP’s strategy of delivering near-term, valuable copper production.

The SGO project will draw on experience developed in the construction of the Organic Growth Project 1 concentrator and desalination plant at Escondida.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
BHP investor relations James Wear, tel: +1 713 993 3737, email: James.Wear@bhpbilliton.com.

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Edited by Creamer Media Reporter

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