Oz Minerals announces A$12m underground expansion at Prominent Hill

PERTH (miningweekly.com) – Copper/gold miner Oz Minerals on Wednesday told shareholders that it would spend about A$12-million on expanding the underground capacity at its Prominent Hill mine, in South Australia.

Development on a second access decline would begin immediately, linking the existing underground development with the openpit operation. The second decline was expected to increase underground capacity by about 30%, to between 3.5-million and 4-million tonnes a year.

“Prominent Hill’s underground mine is proving itself to be an excellent asset and we want to invest in its future," said Oz Minerals MD and CEO Andrew Cole.

He added that by building a second decline, the company would not only boost the underground mine’s capacity, but would also significantly increase the efficiency of the whole operation and drive down future unit costs.

“Prominent Hill has amongst the lowest C1 cash costs in the world, and even on its own, the underground mine is within the bottom quartile of C1 cost producers.

“Once the second decline is completed in the next two years, truck efficiencies in the underground will increase and we will see other major benefits in terms of ventilation and contingency planning,” Cole said.

The additional capacity would allow Oz Minerals to bring forward underground production between 2018 and 2022, which was in line with the company’s strategy of extracting maximum value from the asset, Cole added.

“With this increased output, we will expect to see reduced unit costs which will allow us to further reduce cutoff grades.”

The 1 400 m decline would start construction shortly, and would be completed by the fourth quarter of 2017.

In addition to building the second decline, Oz Minerals would also spend about A$4-million to target resource to reserve conversions during 2016.