Name and Location
Dugald River zinc/lead/silver project, Queensland, Australia.

Client
MMG Dugald River.

Project Description
The Dugald River project is known to be one of the world’s largest and highest-grade  undeveloped lead/zinc/silver deposits, with a resource of 53-million tonnes at 12.5% zinc, 1.9% lead and 36 g/t silver. It is located in north-west Queensland, about 65 km north-west of Cloncurry.

The project will involve the development of an underground mine accessed by two declines (North and South). Run-of-mine material will be hauled to the surface before treatment by an on-site concentrator using conventional crushing, fine grinding and flotation methods.

The mine is expected to process an average of two-million tonnes of ore to initially produce 200 000 t to 220 000 t of zinc in concentrate, 27 000 t to 30 000 t of lead in concentrate and 900 000 oz of silver in concentrate a year.

The zinc and lead concentrate will be transported by road to Cloncurry, at which a rail load-out facility will be constructed to transport the concentrate by rail to Townsville and shipped or sold to local smelters.

Dugald River has a mine life of more than 20 years, with the orebody open at depth.

Net Present Value/Internal Rate of Return
Not stated.

Value
$1.5-billion.

Duration
The project will be commissioned in 2015, with first ore feed expected in the third quarter. Based on current estimates, the first concentrate shipment is expected to take place in the fourth quarter of 2015.

Latest Developments
MMG is considering lower yearly throughput, over a longer mine life, for its Dugald River zinc/lead/silver project.

An updated development plan for the project is under consideration, following the 2014 trial stoping programme, as well as the value engineering and project studies.

MMG has said that it will continue to review all available options, with the objective of developing the project in a way that will maximise long-term shareholder value.

A decision on the Dugald River project is expected by the third quarter.

A batch of ore stockpiled during the 2014 trial stoping programme at Dugald will be processed at MMG’s Century mine following the completion of Century openpit production.

An estimated 450 000 t of ore, with an average grade of 13.3% zinc was produced during the trial stoping programme at Dugald River last year.

While MMG does not intend to truck ore between the two sites in the long term, processing this single batch of ore at Century will provide the company with a further opportunity to understand how Dugald River ore performs during processing.

It will take between four and six weeks to process the batch of Dugald River ore at the Century processing circuit.

Key Contracts and Suppliers
Forge Group Minerals and Resources (EPC).

On Budget and on Time?
Not stated.

Contact Details for Project Information
MMG, tel +61 3 9288 0888 or fax +61 3 9288 0800.
Forge Group Minerals and Resources, tel +61 8 6389 8500, fax +61 8 6389 8599 or email info@forgegroup.com.au.