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

Client
MMG.

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 about $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
The Queensland state government has granted MMG’s Dugald River project special status to reduce red tape and assist in job creation in the region.

State Development and Natural Resources and Mines Minister Dr Anthony Lynham has said that projects like Dugald River are critical to economic development and job creation in the north-west during the tough times caused by ongoing resource commodity price lows.

“Granting it prescribed project status will allow the coordinator-general to assist MMG to navigate processes and timely approvals through government. This is tangible evidence of the government’s commitment to winning jobs and infrastructure in the north-west.

“This is more action for the north-west, on top of our accelerated works programme in Mount Isa and the North West Minerals Province Taskforce.”

In April last year, MMG flagged a new mine plan for the Dugald River zinc/lead/silver project, based on a lower yearly throughput rate, which would allow for a longer mine life.

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 manager of corporate affairs Andrea Atell, tel +61 3 9288 0888 fax +61 3 9288 0800 or email Andrea.Atell@MMG.COM
Forge Group Minerals and Resources, tel +61 8 6389 8500, fax +61 8 6389 8599 or email info@forgegroup.com.au.