JOHANNESBURG (miningweekly.com) – An 18% increase in the underground ore reserve at Prominent Hill could extend the mine’s life to 2029, copper/gold miner Oz Minerals reported on Tuesday.
The increase in underground ore reserves to 39-million tonnes at 1.7% copper equivalent has enabled an expected underground production rate of 3.5-million tonnes to 4-million tonnes a year from 2019 to continue through to 2029, according to the ‘Prominent Hill mineral resource and ore reserve estimate at 30 June 2017’ report.
The underground ore reserve for copper and gold metal increased by about 13% and 27% respectively, and was driven by increased confidence in the mineral resource estimate, improved design inputs and lateral (across and along strike) mining area expansions.
Stockpiles, meanwhile, grew by about 35% to 27-million tonnes, with proved copper stockpiles estimated at 12-million tonnes and gold stockpiles at 15-million tonnes.
The substantial growth in stockpiles was as a result of high-volume, low strip mining from the openpit.
Following the openpit closure in the first quarter of 2018, stockpile processing will maintain the plant at full capacity to mid-2023, generating significant cash flows without openpit mining costs or associated fixed overheads, according to the report.
About 255 000 oz of stockpiled gold has been hedged at an average price of A$1 735/oz, representing almost A$450-million of secured revenue.
Meanwhile, decreases in mineral resources of about 5% to 140-million tonnes, as well as ore reserves decreasing by about 1% to 74-million tonnes were as a result of the mining depletion from the Prominent Hill openpit and underground mines.
Oz Minerals MD and CEO Andrew Cole commented that Prominent Hill continued to develop its pedigree as a strongly performing, long-life asset, with underground reserve life extending as the openpit drew to a close.
“Our aim is to continue extending Prominent Hill underground mine life year-on-year. An estimated 80-million tonnes of underground resource has not been converted to reserve, so there is significant potential for further extensions as we move forward,” he noted.
Cole further explained that stockpile processing will maintain the plant at full capacity to 2023, and with openpit related costs already incurred Oz Minerals expected substantial value to be realised through this period.