PFS increases Carrapateena copper and gold forecast

PERTH (miningweekly.com) – A prefeasibility study (PFS) lifted estimated production rates of the Carrapateena copper/gold project, in Western Australia, by more than 50%, owner Oz Minerals said on Monday.

Production estimates increased to 61 000 t/y of copper and 63 000 oz/y of gold, over an estimated 20-year mine life. This compares with the scoping study estimates of 40 000 t/y of copper and 38 000 oz/y of gold over a similar mine life.

Project costs have increased from A$770-million considered in the scoping study to A$980-million, with the project expected to deliver a net cash flow of A$3.6-billion, a net present value of A$820-million and an internal rate of return of 20%.

Average cash costs for the project have declined from the $1/lb copper considered in the scoping study, to $0.82/lb over the life of the project.

“The Carrapateena PFS highlights that this project is competitive with, or better than, other global long-life copper assets at a similar stage of development,” said Oz Minerals CEO Andrew Cole.

The PFS is based on a four-million-tonne-a-year operation, with Oz Minerals to construct a concentrate treatment plant that will allow the company to add further value in delivering a premium product with high copper content and low impurities.

Cole noted that with the successful completion of the PFS, the Oz Minerals board had approved the progression to a full feasibility study. A parallel study was under way into the concentrate treatment plant, which would be released with the feasibility study.

“The regional infrastructure we intend to build to support the Carrapateena project will have the additional benefit of opening up new opportunities in what is a highly prospective region.

“This is not only the largest new mining project under way in Australia, it is also one that can be funded from our existing cash flows if we so wish. At current consensus pricing, the project could also pay for itself within four years of commissioning,” Cole said.

“With the project’s robust economics, lift in projected output and the lowering of production costs, our confidence in developing a world-class asset for shareholders and wider stakeholders grow by the day.”