PERTH (miningweekly.com) – Copper/gold miner Oz Minerals on Friday announced that it would accelerate planning for its Carrapateena project, in South Australia, after a scoping study proved positive.
Over the past four months, Oz has been evaluating a number of development options for its Carrapateena project, with the miner concluding that a sub-level caving option would generate the strongest returns.
A scoping study considering a 2.8-million-tonne-a-year mine was considered, and resulted in a net present value estimate of over A$600-million and an internal rate of return of at least 20%.
The project would require an estimated capital injection of about A$770-million and would have a mine life of more than 20-years, delivering some 55 000 t of copper and 58 000 o z of gold within the first three full years of production, and a life-of-mine production of 40 000 t/y of copper and 38 000 oz/y of gold.
C1 cash costs have been estimated at $1/lb over the life of the mine, while average yearly cash flows were expected to reach over A$150-million.
“Our plan for Carrapateena to become a world-class project that generates strong returns has taken a big step forward,” said Oz MD and CEO Andrew Cole.
“Whatever lens you look through, whether its value, rate of return, grade, cost mine life, production profile, jobs or scalability, we believe Carrapateena will be an outstanding project.”
Oz would now launch a prefeasibility study into the Carrapateena project, which would evaluate opportunities to increase throughput rates from 2.8-million tonnes a year to a maximum of 4.8-million tonnes a year, through cut-off grade optimisation and the addition of an alternate ore handling system by mid-2016.
New drilling would also be conducted with the aim of upgrading the mineral resource to a measured status and for metallurgical testing, while the scoping, costing and supplier selection would also be finalised to allow for decline construction to start in mid-2016.
Oz has committed some A$20-million over the remainder of 2016 to complete activities at the Carrapateena mine.
Cole said on Friday that by fast-tracking the design and decision making process, by leveraging off the work already undertaken, Oz hoped to start building the project at a low point in the commodity cycle, when it was less expensive to develop and when the typical risks of schedule and capital overturns were lower.
A final decision to mine was expected in the first quarter of 2017.