PERTH (miningweekly.com) – Australia-based miner Oz Minerals on Thursday announced a hub strategy for its Brazilian assets, with copper and gold processing facilities serving multiple small and mid-sized mines in Carajás and the Gurupi provinces.
A nine-month review and concurrent drilling programme at Oz Minerals’ Brazilian assets have now been completed, following the A$430-million acquisition of Avanco Resources, which was completed in the third quarter of last year.
“The Avanco acquisition gave Oz Minerals a strategic foothold in Brazil’s world-class Carajás copper province and the highly prospective Gurupi greenstone belt,” said Oz Minerals CEO Andrew Cole on Thursday.
He told shareholders that the review completed over the last nine months focused on increasing the company’s understanding of each asset, and on how value could be optimised within the existing risk framework and in line with Oz Minerals’ devolved operating model, where assets operate autonomously within a strong company-wide governance framework.
The Carajas province hosts Oz Mineral’s Antas mine, where pit closure is planned for 2021, as well as the Pedra Branca and Pantera development projects, while the Gurupi province hosts the CenteroGold development project.
The Antas processing plant is positioned to continue beyond 2021, and will act as the first hub in Carajás, taking ore trucked from Pedra Branca, where a decline development decision is expected by the third quarter of this year.
“We did not purchase Avanco for the small Antas operating mine. However, it has provided us with a strong entry point into Brazil in terms of mining and process expertise. While the mine will not deliver for an extended period in its own right, Antas’ quality processing facility, incumbent workforce and established presence with regulators can enable rapid value realisation through the Pedra Branca project.
“Antas is the foothold into the Carajás we sought as part of the acquisition,” Cole said.
“We are currently working on a new Pedra Branca base case which sees a potential capacity of circa 1-million to 1.2-million-tonne-a-year underground mine with ore processing taking place at the Antas Carajás processing hub.
“A decision is expected in the third quarter of 2019 on starting development of the Pedra Branca decline. Further studies associated with the new base case, including transport options, will be completed before a final investment decision is considered.
“Depending on the positive and timely outcomes of further studies and various decision points, Pedra Branca run-of-mine ore trucking could begin mid-2021,” Cole added.
For the full 2019, however, Antas is expected to add between 6 000 t and 6 500 t of payable copper, and between 4 200 oz and 4 600 oz of payable gold to the Oz Minerals portfolio.
Meanwhile, Oz Minerals on Thursday also released a prefeasibiilty study (PFS) for the CentroGold project, in the Gurupi province, which demonstrated a minimum ten-year operation with an average annual gold production of between 100 000 oz and 120 000 oz, with between 190 000 oz and 210 000 oz in the first two years of production.
The PFS estimated that the project could be developed at a capital cost of around $155-million, and could be operated at an all-in sustaining cost of around $640/oz.
“The potential of Gurupi province has strengthened on completion of the CentroGold PFS,” Cole said.
Importantly, CentroGold also had the potential to become a Gurupi processing hub servicing nearby deposits such as Chega Tudo, 8 km to the west.
“With current activities focused on permitting and village relocation planning, the feasibility study and further regional exploration will begin following removal of the injunction. It is important to note that the injunction applies only to the CentroGold tenements within the province,” Cole said.
The injunction at the CentroGold project was granted in 2013 by a Federal Court judge against an Avanco subsidiary, citing irregularities in the grant of the environmental licence.
Cole added that upon the removal of the injunction, Oz Minerals was expecting a two-and-a-half-year startup period, which would incorporate infill drilling and study completion, resettlement activities, procurement, mine preparation and plant construction.
“Our confidence has grown in the CentroGold project and we will continue to advance our province strategy to further increase value for a moderate capital outlay.”
Furthermore, Oz Minerals has recently also acquired the Jiboia exploration tenements to the north of CentroGold, expanding the company’s presence in Gurupi.
The total land package in the Gurupi province covers some 2 300 km, with CentroGold comprising less than 3% of this.