Photo by: Bloomberg
PERTH (miningweekly.com) – The board of copper/gold miner Oz Minerals has taken a final investment decision on the $35-million Pedra Branca mine, in Brazil.
The one-million-tonne-a-year underground operation is expected to have a mine life of eight years, and would produce some 18 000 t/y of copper and 11 000 oz/y of gold.
Decline construction is expected to start in December and first development ore from Pedra Branca has been targeted for mid-2020.
The pre-concentrate ore from the Pedra Branca mine will be trucked some 75 km to the existing Antas processing facility, marking the first spoke in Oz Minerals’ Carajas Antas hub.
The miner on Thursday said that it had also entered into a series of inter-linked strategic agreements with Brazilian major Vale, to simplify the activities and to enable Oz Minerals to draw on Vale’s extensive support network, using its processing facilities and access to small to medium high-grade Vale exploration projects in the Carajas.
Under these agreements, Oz Minerals' concentrate from Carajas would be sold to Vale, while the company would also have the option of acquiring Vale’s share in two highly prospective copper exploration projects in the region.
Oz Minerals Brazilian CEO Carlos Gonzalez told shareholders that the final investment decision on Pedra Branca, and the agreements with Vale, advanced the Carajas hub strategy, which would see a series of mid-scale mines supply ore to central processing facilities.
“The Vale agreements simplify and focus our activities in the Carajas as well as benefiting Vale by increasing its concentrate sales volumes and creating the potential to receive higher-grade ore from Oz Minerals in the future.
“The Vale Carajas concentrate sales agreement utilizes Vale’s extensive in-country transport infrastructure, which provides logistics and marketing cost savings, and simplifies our activities in the region.”
Gonzalez noted that the earn-in agreement over the Circular and Santa Lucia assets also provided Oz Minerals with the option to purchase the two additional exploration projects, providing a pathway to potential future mines in the Carajas.
Santa Lucia has an exploration target of between 5-million and 14-million tonnes, grading at 1.4% to 2% copper.
Meanwhile, Gonzalez on Thursday also said that Oz Minerals would exercise its option to purchase the Pantera advanced exploration project, which it acquired as part of the takeover of Avanco Resources in 2018.
Oz Minerals would pay Vale $1-million to conditionally transfer the titles of Pantera, resulting in Oz Minerals having more control and flexibility during the permitting process.
“Subject to approved permitting, we intend to undertake further drilling at both Pantera and Santa Lucia in the first half of 2020, targeting a mineral resource on each, and if successful, proceeding to scoping studies during 2020. Pantera is 110 km from Pedra Branca, so it represents a potential second Oz Minerals-owned Carajas processing hub,” Gonzalez said.
Meanwhile, in addition to the concentrate sales agreement and option agreements, Oz Minerals also has an option to supply ore from Pedra Branca to the Vale-owned Sossego mill.
“The ore supply agreement provides additional processing flexibility and capacity should it be required in the future. Pedra Branca is closer to Sossego than Antas, representing ore handling logistics benefits. If Santa Lucia becomes an openpit mine, its ore can be supplied to the nearby Antas processing plant. The ore supply agreement creates the option for Oz Minerals to operate multiple mines and increase copper production without the associated capital investment in additional processing or tailings storage capacity,” Gonzalez said.