OZ Minerals has allocated an additional $6m-$9m in capital expenditure for its Prominent Hill mine this year, after deferring funding earlier in 2020 due to uncertainties posed by COVID-19.
Located in one of the world’s most mining-friendly locations, Prominent Hill possesses highly competitive fundamentals.
The large copper-gold mine, located 650km north west of Adelaide and 130km south-east of Coober Pedy in South Australia,
delivers a high grade resource, with the ore processed using conventional methods.
The underground decline development at Prominent Hill will allow OZ Minerals to begin mining the western side of the Malu orebody in a bottom-up sequence.
It will also open up the pathway to bottom-up mining from deeper underground from mid to late 2021.
According to OZ Minerals chief executive Andrew Cole, with sustainable annualised rates at or above 4mt per year in recent months, the company has brought forward future decline development spend to further consolidate underground ore movement.
“We will increase mining rates to between 4mt per year to 5mt per year from 2022, prior to any additional tonnage from a potential underground expansion,” he said.
“A study update is expected towards the end of the year on the expansion which is contemplating a shaft haulage system.”
Prominent Hill was discovered in 2001 by Adelaide-based Minotaur Exploration and was considered the most significant Greenfield discovery in Australia for a decade.
Indeed, it produces one of the highest grades of copper concentrate traded on the open market.
There are also significant opportunities for organic growth.
The 24-hour operation is comprised of the Ankata underground mine, a conventional crushing, grinding and flotation processing plant, and a permanent accommodation village for its staff.
The Malu open pit mine concluded operations in Q1 2018.
Prominent Hill has a workforce of about 1200 employees, including contractors.
Concentrate is transported via the Adelaide to Darwin railway to the Port of Darwin. Prominent Hill delivers around 600t of concentrate per day, six days per week, to the port.
Prominent Hill is an iron oxide/copper/gold deposit located in the Gawler Craton, which covers about 600,000km2 of South Australia. As well as Prominent Hill, the prolific site hosts Olympic Dam and Carrapateena, and a number of other smaller and subeconomic copper-gold deposits.
Most of these deposits are thought to be genetically related to the Gawler Range Volcanic–Hiltaba magmatic event which affected the central and eastern portions of the Craton millions of years ago.
Copper-gold-silver mineralisation at Prominent Hill is mostly hosted within hematite-matrix breccia, with copper mineralisation occuring as disseminations of chalcocite, bornite and chalcopyrite in the matrix of the breccia.
The Prominent Hill Mineral Resource as at June 30, 2019, has been estimated at 140mt, grading 1% copper and 0.7g/t gold, and represents a combination of both copper and gold mineralisation.
This estimate includes mineralisation from both the Prominent Hill underground and surface stockpiles, and is inclusive of the Ore Reserves.
The mine life has been extended until 2030 following a 50% increase to underground Proved Reserves.
OZ Minerals is a copper-focused, global, modern mining company based in South Australia.
Listed on the Australian Securities Exchange, the company has a growth strategy focused on creating value for all stakeholders.
As well as Prominent Hill, OZ owns the copper mine at Carrapateena, and has assets in the Carajas province of Brazil.
It also has a pipeline of earn-in agreements with experienced exploration companies in Australia and internationally.
Focused on creating a pipeline of opportunities, OZ maintains a commitment to safety, capital discipline and values to underpin its operations.
OZ Minerals prides itself on being a modern mining company that adapts to changing environments, harnessing the innovative ideas of its people and collaborating to leverage the experience of those around.
Australia’s third largest copper producer, OZ Minerals was formed in 2008 by the merger of two Australian non-ferrous metals mining businesses – Oxiana and Zinifex.
A proportion of OZ Minerals’ assets – excluding Prominent Hill – were then acquired in 2009 by China Non Ferrous Metals (Minmetals), the company now operating as MMG.
In 2011, OZ Minerals purchased the Carrapateena exploration project.
In 2012, the Prominent Hill operation was expanded to include underground mining at Ankata, and in 2015, a second underground mine, Malu Underground, was commissioned. The underground operations were subsequently integrated from an operational perspective.
In July, OZ Minerals raised its full-year copper and gold production targets following a better-than-expected first-half performance across the two SA mines.
The upbeat outlook comes as the price of copper soars on the back of demand hopes in China, the world’s top consumer of the metal, and supply problems across South America, where the coronavirus pandemic has reduced workforce numbers.
OZ Minerals said it has increased copper production guidance at its Prominent Hill and Carrapateena mines, and now expects to produce 88,000-105,000t of copper, up from 83,000-100,000t.
It also lifted gold production guidance from 207,000-234,000oz to 227,000-249,000oz due to the solid performance of the mines, and cost reductions aided by increased 2020 gold price assumptions to US$1620/oz.
The company further aims to finalise its acquisition of Cassini Resources in October.
“The acquisition, should it be supported by Cassini shareholders, will consolidate ownership of the West Musgrave project to 100 per cent and provide development optionality,” Cole said.
“We remain focussed on completing the transaction in the coming months.”
Mr Cole said his team had delivered a solid quarter while adjusting to COVID.
“The ongoing focus to protect the health and safety of our employees and other stakeholders through the COVID-19 pandemic has pleasingly resulted in no cases identified at Prominent Hill or Carrapateena to this point,” Mr Cole said.
“The number of people from our Brazil team who are currently positive for COVID-19 is in single digits and they are recovering at home.
“However, to ensure ongoing employee safety and continued operations, extensive preventative and contingency measures remain in place should conditions deteriorate.”
OZ Minerals’ shares have more than doubled in value since March, when they were trading around $7. The stock peaked above $14 in August.