Oz Minerals unveils PFS for $22 billion copper-gold mine

Deposit shares characteristics with BHP’s massive Olympic Dam mine 100km away

Shares in Oz Minerals shot up more than 3% on Monday after the company released the results of a Pre-Feasibility Study for its Carrapateena project in Australia.

The Melbourne-based company, worth $1.3 billion on the Sydney Exchange, said the project located 130 kilometres north of Port Augusta in South Australia and some 100 kilometres south-east of BHP’s massive copper-uranium Olympic Dam mine, would produce revenues of more than $22 billion over its life at production cost of just $0.49 a pound of copper.

OZ Minerals’ CEO and Managing Director Terry Burgess said: “We have reviewed in detail numerous copper-gold projects around the world over the past five years and there are very few like Carrapateena which offer the potential of multi-decade production at low operating costs,” adding that it is looking to attract partners to shoulder some of the nearly $3 billion needed to construct the mine.

Project key points (in AUS$)

• Net cash flow of $8.5 billion, including capital expenditure.
• A net present value at 8 percent discount rate of $1.15 billion and an internal rate of return of 13 percent, both on a post tax basis.
• Total revenue over life of mine of $22.1 billion.
• Project capital cost of $2.985 billion.
• A low risk jurisdiction relative to other parts of the world with a stable and well understood regulatory environment and encouraging state government.
• Orebody will cave with pre-conditioning, as confirmed by three independent geotechnical consulting firms.
• Demonstrated ability to produce a high quality copper-gold concentrate averaging 30-35 percent copper over life of mine with uranium and fluorine below typical penalty levels and no arsenic.
• High metal recoveries of 92 percent and 70 percent for copper and gold respectively.
• Average annual production rate of 114,000 tonnes of copper and 117,000 ounces of gold at assumed steady state.
• Average C1 unit cost of production of US$0.49 per payable pound of copper including by-product credits.
• Mine life of 24 years, from a plant operating at a production rate of 12.4 million tonnes per annum.
• The site offers an ideal location for access, construction and operation, being relatively flat, at low elevation and in a low rainfall environment.
• Good infrastructure when compared to other jurisdictions with close access to power, water, roads, rail, ports and a skilled labour market.
• Supportive community and other stakeholders, with an approved Retention Lease in place for development of an exploration decline.