PERTH (miningweekly.com) – A prefeasibility study (PFS) into the West Musgrave/ Nebo-Babel base metals project, in Western Australia, has demonstrated that the project could have a mine life of some 26 years, producing at an annual rate of 28 000 t of copper and some 22 000 t of nickel in concentrates.
“The PFS is now complete and has confirmed the project can be a low carbon, low cost, long life mine producing copper and nickel, both in-demand minerals for the renewable and electrification industries,” said Oz Minerals CEO Andrew Cole.
Based on a processing capacity of ten-million tonnes a year, the project is expected to require a capital investment of some A$995-million, and will deliver average net cash flows of A$190-million a year.
The PFS estimated a post-tax net present value of A$800-million for the project and an internal rate of return of 20%.
Oz Minerals on Wednesday reported a maiden ore reserve of 220-million tonnes at West Musgrave, grading 0.36% copper and 0.33% nickel, representing 22 of the 26-year mine life.
Cole told shareholders that during the PFS, the company partnered with traditional owners, government agencies and industry experts to design a project to meet its low carbon emissions target.
“Building a viable asset in a remote part of Australia is challenging, but through our collaborative approach, we have developed innovative off-grid renewable power and processing solutions, increased stakeholder awareness and involvement in the project, and we have built confidence in the mineral resource itself.
“Furthermore, we have been able to reduce and eliminate a number of potential project risks,” Cole said.
He noted that 70% to 80% of the power needs at the West Musgrave project could be met by renewable sources, supplemented by battery storage and by diesel, or trucked gas-fired generation.
The study assumed that the power solution would be outsourced to a third party and the power purchased back over the life of the asset, however, Cole noted that further work was required to maximise the project’s power position, with a gas pipeline remaining a secondary option to be further investigated during the next phase.
Fellow listed Cassini Resources, which holds a 30% stake in the project, has welcomed the release of the PFS, with MD Richard Bevan saying the study clearly demonstrated the strategic value of the project.
“Completion of the PFS is a significant milestone for the West Musgrave project and all its stakeholders. The high quality of the PFS demonstrates the strategic value of the project by confirming robust economics on a long life, low operating cost copper and nickel mine at the Nebo-Babel deposits. The province offers the potential to add value to the project over time with continued exploration and development activities.”
Oz Minerals will continue to sole fund development studies until the feasibility study and a decision to mine has been made.