Oz on track after solid first quarter

PERTH (miningweekly.com) – ASX-listed Oz Minerals was on track to meet its full year production expectations following a solid first quarter.

The miner on Thursday reported that copper production during the three months to March had reached 31 018 t, compared with the 32 636 t produced in the previous quarter, while gold production reached 27 563 oz, compared with the 31 547 oz produced in the three months to December.

“Prominent Hill has delivered a strong start to the year. These results give us confidence that we will meet or exceed guidance for 2016,” said Oz Minerals MD and CEO Andrew Cole.

He noted that the demobilization of an excavator and associated equipment from the South Australia-based openpit operation, was completed as planned in March, and would result in a reduction of cash costs during 2016.

Oz Minerals in February announced that it would spend some A$12-million to expand the underground potential at Prominent Hill, with the addition of a second decline.

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

“Development in the underground continued with the second decline 6% ahead of schedule. While ore production was down in the first quarter due to sequencing constraints, we expect this to increase through the remainder of 2016. This bodes well for Prominent Hill’s evolution into an underground-only operation,” Cole said.

For the full 2016, the Prominent Hill mine was expected to deliver between 115 000 t and 125 000 t of copper and between 125 000 oz and 135 000 oz of gold.

Meanwhile, Cole said that Oz Minerals also made significant progress at its Carrapateena project, where a 2.8-million-tonne-a-year operation was planned.

A scoping study estimated that the project would cost some A$770-million to develop, but could deliver a net present value of over A$600-million and an internal rate of return of 20%.

Oz Minerals was currently undertaking a prefeasibility study at the project area.