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.

MMG has approved the updated development plan for the Dugald River project, bringing the project on line at a time when global zinc supply is expected to dissipate with the closure of several mines.

In April this year, MMG flagged that it was considering lower yearly throughputs at the Dugald River mine, allowing for a longer mine life.

The updated plan includes a mine production rate of 1.5-million tonnes a year, the construction of a concentrator, production of about 160 000 t/y of zinc in concentrate and by-products, over an estimated 28-year mine life.

This was compared with initial plans of the mine’s processing an average of two-million tonnes a year of ore to produce between 200 000 t/y and 220 000 t/y of zinc concentrate, between 27 000 t/y and 30 000 t/y of lead in concentrate and about 900 000 oz/y of silver.

Net Present Value/Internal Rate of Return
Not stated.

Value
According to the new mine plan, MMG will spend some $750-million on project costs to achieve first concentrate shipment, compared with $1.5-billion initially.

Duration
First production from the project’s concentrator is expected in 2018.

Latest Developments
Discussions to amend funding arrangements have started with MMG’s existing lenders, and agreements with key energy, logistics and service providers will be revised, based on the updated project plan.

Following the remaining conditions being met, construction of remaining surface infrastructure facilities will start in 2016, with first production from a Dugald River concentrator expected in the first half of 2018.

Contracts and Suppliers
Forge Group Minerals and Resources (engineering, procurement and construction).

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.