The OZ Minerals Board today approved the construction of a hoisting shaft at the Prominent Hill copper-gold mine in South Australia which will extend the mine’s life to at least 2036 and increase production to 6 million tonnes per annum (Mtpa).
The shaft mine expansion also enables generational province potential with further mine life extensions possible as 67 million tonnes of resource remains outside the shaft expansion mine plan.
Further, an exploration program has also identified that mineralisation remains open at depth beyond the current Mineral Resource boundary, potentially accessible via the shaft.
An exploration update released by OZ Minerals today provides further clarity on satellite orebodies closer to the surface that could potentially be mined simultaneously.
The exploration potential is not contemplated in the shaft business case. The $600 million Wira shaft investment will increase annual copper production rates by approximately 23 per cent at a 20 per cent lower operating cost over the current trucking life of mine estimates.
Work on sinking the Wira shaft is expected to commence in the first quarter of 2022 and is scheduled for completion in 2024. The hoisting shaft provides access to Mineral Resource outside the current trucking mine plan that would have been uneconomical via a trucking operation from around 2023.
Prominent Hill mine began operation in 2009 as an open pit and is now an underground mine producing 4.5 Mtpa moving to between 4.5 and 5 Mtpa from 2022 via a trucking operation.
Upon completion of the Wira shaft installation in 2024, the underground production rate will increase to 6 Mtpa from 2025. The shaft operation is expected to commence in 2025 around the same time the stockpiled ore from the original open pit is fully depleted.
The average annual copper production is expected to be circa 54,000 tonnes and 108,000 ounces of gold post-2025, some 23 per cent more than expected in the current trucking operation.
OZ Minerals’ Chief Executive Officer, Andrew Cole, said: “We are thrilled to see a long and productive future for Prominent Hill with the Wira shaft mine expansion enabling access to areas previously thought uneconomic and opening up potential new prospects.”
“Prominent Hill is a quality orebody and remains open at depth. The reliable performance of the operation and its consistent Resource to Reserve conversion rate were all influential in the decision,” Mr Cole said.
“The shaft expansion creates an exciting new future for Prominent Hill with extended mine life and production rates enabling investment in lower emissions and other OZ Minerals environmental and workforce aspirations.”
“For the first time we have used a carbon price in determining the project valuation, a practice we will adopt in other OZ Minerals projects going forward.”
Mr Cole said the expansion will create value for all of OZ Minerals stakeholders, including:
- Shareholder: Reserve growth and maintaining a long-life, low-cost asset in a safe jurisdiction
- Government: Ongoing economic contribution through employment, taxes and royalties; reduction in the site’s emissions intensity by 27 per cent (scope 1 and 2)
- Employee: Longevity of employment circa 1200 steady state workforce
- Community: Extends business and employment opportunities
- Suppliers: Uplift during construction and ongoing business for local suppliers