PERTH (miningweekly.com) – ASX-listed Oz Minerals has earned a 51% interest in the West Musgrave nickel/copper project, in Western Australia, after spending A$22-million on the project area.
Oz and its joint venture (JV) partner Cassini Resources are now conducting a prefeasibility study, with OZ CEO Andrew Cole saying early results have been encouraging.
“Our confidence in the project’s potential has increased and supports reaching the 51% earn-in level earlier than originally anticipated.
“Recent early metallurgical testwork shows significant improvements over the results achieved during the scoping study, with a material improvement in copper and nickel recoveries. On results to date, we have also seen an increase in copper concentrate grade while nickel concentrate grade remains in line with the scoping study.”
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.
The prefeasibility study is scheduled for completion in the second quarter of 2019.
Meanwhile, the planned 2019 infill drilling programme will also be brought forward to start later this year, in order to enhance the potential feasibility study schedule.