PERTH (miningweekly.com) – Copper/gold miner Oz Minerals is on track to meet its full year production guidance, with both gold and copper production up in the third quarter.

Oz Minerals on Monday reported that copper production for the three months to September reached 30 012 t, up from the 27 423 t produced in the previous quarter, while gold production in the same period increased from 51 184 oz to 56 334 oz.

“The third quarter has seen steady improvement in our operational performance and a major growth milestone has been achieved with a positive investment decision for the West Musgrave project which will commence on ground construction next month,” said CEO and MD Andrew Cole.

“Our major operations, Carrapateena and Prominent Hill, are seeing the results of improvement programmes implemented to address a disrupted first half following Covid absenteeism, underground conveyor breakdown and supply chain interruptions which impacted site operations and production. Carajás East continues to deliver production to plan as it has done throughout the year.

“A return to better production performance has seen month-on-month improvements at Carrapateena. Mining performance continues to improve, driven by our focus on continuous material flow and equipment availability. Processing remains unconstrained for the ongoing throughput uplift in the fourth quarter,” said Cole.

“At Prominent Hill, performance improvement and operational consistency returned late in the quarter, with September recording the highest underground ore movement month on record after Covid-related operator and maintainer shortages persisted in July and into August.

“Mining rates and development improvements experienced in September have continued into the fourth quarter. With continued improvement to underground operations, higher copper grade stopes coming online in the fourth quarter and reduced mill feed to improve plant performance, a material improvement to copper metal production is expected. This strategy will, however, result in lower gold production with a lower portion of gold stockpile feed to be milled during the quarter and we now expect full year gold production to be within the lowered gold guidance range.

“In Carajás East, record metal production was achieved in September. Multiple stopes are now consistently in production, the capability of our underground operators is growing, and plant optimisation works have increased recoveries.”

During the quarter under review, Oz Minerals announced a final investment decision into the A$1.7-billion West Musgrave copper/nickel project.

The West Musgrave project is expected to have a mine life of 24 years currently, producing an average of 35 000 t/y of nickel and 41 000 t/y of copper in the first five years of operations, and 27 000 t/y of  nickel and 33 000 t/y of copper in the remaining mine life.

Operating costs for the project are estimated at A$34/t of ore.

The project’s post-tax net present value has been estimated at between A$1.5-billion and A$2.2-billion, and its internal rate of return at between 15% and 19%, while the project pay-back is estimated at 6.5 to 7.5 years.

“West Musgrave will be our fourth mine and will be one of the world’s largest, lowest cost, lowest emissions copper/nickel projects. We are in the enviable position of being able to apply the experience of the many team members who were involved in Carrapateena’s development, along with solid relationships with key suppliers, to drive West Musgrave towards its objectives of achieving completion on schedule and to budget,” said Cole.

“Average annual production of 35 000 t/y nickel and 41 000 t/y copper is expected in the first five years and 28 000 t/y nickel and 35 000 t/y copper is expected over its 24-year operating life. First concentrate is targeted for the second half of 2025 aligned with the beginning of the forecast nickel market deficit.

“West Musgrave will be one of the largest fully off-grid, hybrid renewable powered mines in the world with an initial 80% renewable penetration. It’s an exciting project, underpinned by robust project metrics. Site mobilisation is expected to begin later this month.”

Looking ahead at the full year, Oz Minerals has maintained its production guidance at between 120 000 oz and 135 000 t of copper and between 203 000 oz and 220 000 oz of gold, at an all-in sustaining cost of between 175c/lb and 195c/lb.