PERTH (miningweekly.com) – The board of copper/gold miner Oz Minerals has approved a A$47-million investment to progress a shaft expansion study at its Prominent Hill operation, in South Australia, after an updated expansion study indicated that an installation of a vertical hoisting shaft was technically and economically feasible.

The 1 360 m, 7.5-m-diameter vertical hoisting shaft will replace truck haulage.

Oz Minerals told shareholders on Monday that the robustness of the investment into the shaft was tested by examining the feasibility of mining the existing ore reserves, with a production target based on some six-million tonnes a year from 2025, comprising less than 30% inferred mineral resource.

The interim case showed that converting to a vertical shaft would lower the operational risk of mining at depth, and would be net present value and cashflow positive over the current truck haulage mining operation.

The study showed that a shaft haulage expansion would require a capital investment of some A$450-million over a four-year period, from 2021, and would result in improved safety and productivity, lower site operating costs of between A$10/t and A$15/t, the potential to extend the mine life upon the further conversion of mineral resources to reserves, and improved greenhouse gas emission intensity.

“The positive findings of the Prominent Hill expansion study on a relatively small case increases our confidence in Prominent Hill’s longevity and ongoing performance,’ said Oz Minerals MD and CEO Andrew Cole.

“While examining only a portion of the mineral resource, the study showed significant cash flow uplift, improved safety and lower mining costs and emissions intensity. It provides a strong foundation from which to consider the potential of the remaining two-thirds of the inferred resource as the study and infill drilling progresses to inform an investment decision mid-2021.”

Cole pointed out that underground mining rates averaged around four-million tonnes a year, and Oz Minerals was expecting to achieve rates of between four-million and five-million tonnes a year from 2022, when the company is able to mine simultaneously from the bottom of the mine plan and from the current mining levels.

“The mine has consistently operated in the lowest quartile of the cost curve for many years. We look forward to the results of the study and further infill drilling in mid-2021,” Cole said.

The largest portion of the A$47-million investment will be directed towards further infill drilling to potentially convert inferred resource to reserves, to inform the final investment decision.

Meanwhile, Oz Minerals on Monday also reported that the current mine life at Prominent Hill had been reduced from 2021 to 2030, owing to increased mining rates from 2022.

The miner said that the increased mining rates and the inclusion of existing marginal-grade stockpiles would maintain the plant at full capacity to the end of 2024, some 18 months longer than originally planned.

Cole noted that some 90-million tonnes of mineral resource still remained outside of the Prominent Hill mine plan, with exploration results demonstrating further potential beyond the limit of the currently defined resource.

Meanwhile, copper tonnes at the Carrapateena project have increased by some 4%, while mineral resource tonnes have decreased by around 2%, with the project estimated to host 950-million tonnes, at 0.57% copper and 0.25 g/t gold for 5.4-million tonnes of contained copper and 7.6-million ounces of gold.

Ore reserves at Carrapateena are estimated at 220-million tonnes, grading 1.1% copper and 0.45 g/t gold for 2.3-million tonnes of contained copper and 3.1-million ounces of gold.

“It is pleasing to see an increase to metal in the Carrapateena mineral resource as we continue to improve our knowledge of the orebody during the early stages of production. This provides further confidence in the potential for a multidecade mining province through an expansion beyond the current sub-level cave,” said Cole.