Oz Minerals ticks production boxes for 2021

27th January 2022 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) – Copper/gold miner Oz Minerals has hit its production targets for the 2021 financial year, following a strong December quarter.

The miner on Thursday revealed that 125 486 t of copper was produced in the full year, in line with the guidance of between 120 000 t and 145 000 t of copper, while gold production for the full year amounted to 237 263 oz, in line with the guidance of between 220 000 oz and 243 000 oz.

During the three months to December, copper production reached 32 169 t, slightly below the 33 794 t delivered in the September quarter, while gold production in the same period reduced from 65 932 oz to 58 306 oz.

Oz Minerals reported record revenues of A$2.1-billion for the full year.

“2021 saw Oz Minerals deliver operationally, despite a challenging environment, again achieving group production and cost guidance, as well as advancing our growth projects at Carrapateena and Prominent Hill and the West Musgrave study. We also commenced production at Pedra Branca and declared a maiden mineral resource estimate for Santa Lúcia, potentially the next satellite mine at our Carajás East hub,” said MD and CEO Andrew Cole.

“However, these achievements were marred by the tragic death of one of our team in September, a Byrnecut underground workforce member at Prominent Hill. We again extend our condolences to his family and friends.

“Covid-related workforce and supply challenges persisted during the year but elevated during the last quarter as most Australian state borders reopened. We expect these challenges to continue into 2022 as we transition to “living with Covid” across the community. Temporary, short production interruptions are expected, particularly during the first half,” Cole said.

Cole noted that in its second year of operation Carrapateena continued to optimise and debottleneck the processing facility with 4.6-million tonnes of ore processed during the year while recording the highest production month on record in December, with 493 000 t of ore treated.

This performance provides further confidence that the sub-level cave production rates can increase to circa 4.7-million tonnes a year to 5-million tonnes a year once the cave propagates to surface later this year and the second crusher is commissioned in early 2023.

“The proximity of our two South Australian mines and a common mining contractor enabled flexing of our underground resource pool across both operations towards the end of the year,” said Cole.

“The Carrapateena block cave expansion was approved at the beginning of the year and decline development is now underway. The expansion is looking to capitalise on the value opportunity beyond the existing sub-level cave operation, expanding ore reserves and mine life and unlocking Carrapateena’s potential to be a multi-generational, lowest quartile cash cost producing province.”

Meanwhile, he noted that Prominent Hill again delivered its production and cost targets.

The Wira Shaft mine expansion was approved mid-year and work on the shaft collar is now well advanced. The construction of a hoisting shaft at Prominent Hill will extend the mine life to 2036, lower operating cost, reduce operational risk and lower emissions intensity. It also enables generational province potential with further mine life extensions possible as some 67-million tonnes of resource remain outside the shaft expansion mine plan.

“The West Musgrave study progressed well during the year with many aspects of the project well advanced and technically de-risked. The team continues to work through a range of value opportunities for inclusion into the project base case albeit we are also seeing capital escalation in a number of areas, with full costings yet to be concluded. The project remains on track for a final investment decision in the second half of 2022, however, uncertainties also remain in relation to ongoing border restrictions, labour availability and the potential impact on project schedule and costs.

“Our Carajás Hub strategy took shape with the underground mine at Pedra Branca ramping up stope production, although at a lower rate than originally intended due to equipment supply and some resourcing issues, and a maiden mineral resource was announced for Santa Lúcia.

“During 2021 we had anticipated completing study updates for both the Carajás East and West Hubs, however, we now expect to deliver these updates in 2022, allowing time to include additional drilling into the study results. The studies will investigate the opportunity for Santa Lúcia to potentially be the next satellite mine at our Carajás East Hub and for Pantera to underpin the investment required to establish the first mine at a potential future Carajás West Hub,” Cole said.

Looking at the 2022 financial year, Oz Minerals has set a copper production target of between 127 000 t and 149 000 t, and a gold target of between 208 000 oz and 230 000 oz, with higher production targets driven by increasing grades at Carrapateena.

“As we transition to living with Covid across the community we will be closely monitoring and managing potential supply chain interruptions and labour shortages along with the inflationary cost environment,” Cole told shareholders.