PERTH (miningweekly.com) – An extended feasibility study into the Hillside copper project, in South Australia, has materially reduced the project’s capital costs while improving fundamentals, owner Rex Minerals said on Monday.
The extended feasibility study estimated that the project would require a capital investment of A$480-million to support a six-million-tonne-a-year operation, with a 13-year mine life.
The average yearly production over the first 12 years of operation was expected to be 129 000 t of copper concentrate, containing 30 000 t/y of copper and 24 000 t/y of gold.
The feasibility study results compared with an initial 2011 study which estimated a capital cost of between A$650-million and A$800-million, and a mine life of 12 years.
The initial study had also considered a two-stage development, with Stage 1 production projected at 40 000 t/y of copper, 35 000 oz/y of gold and 700 000 t/y of iron concentrate, and production in Stage 2 ramping up to more than 70 000 t/y of copper, 50 000 oz/y of gold and 1.3-million tons a year of iron.
The extended feasibility study simplified and streamlined the mine plan, incorporating a smaller start-up footprint, a simpler process flowsheet and material handling complexity, and significantly higher equipment productivity.
The new plan focused on selective mining of narrower ore zones to reduce dilution and improve ore recovery.
Based on the extended feasibility study, the Hillside mine was expected to have a net present value of A$188-million and an internal rate of return of 14%.
Rex MD Richard Laufmann said that the Hillside extended feasibility study had delivered a development strategy that sat within the previous design footprint, was technically robust, and required lower capital investment.
“The revised Hillside project is commercial and realistic, and it fits comfortably with current market expectations and conditions. In short, the Hillside project now delivers lower risk, lower capital, lower operating costs and more attractive economics.”