OZ Minerals Limited and Cassini Resources Limited have released the results of the West Musgrave, Nebo-Babel Pre-Feasibility Study (PFS). The project is a joint venture between OZ Minerals (70%) and Cassini (30%) and is located in Western Australia.
The PFS has demonstrated an approximately 26-year open pit copper and nickel sulphide mine. It is the first development opportunity within the broader West Musgrave province which includes a number of additional highly prospective opportunities including the nearby Succoth copper deposit.
A Maiden Probable Ore Reserve of 220Mt at 0.36% Cu and 0.33% Ni was also declared, representing ~22 years of the ~26-year life of mine (LOM) demonstrated in the PFS (with the balance of the mine life underpinned by a combination of Indicated and Inferred Mineral Resource).
Critical path activities are continuing whilst the project is being assessed under the OZ Minerals’ capital allocation framework. The PFS has given the partners a solid platform for engaging with potential lenders and advisors on how best to fund and structure the project prior to moving to the next phase.
OZ Minerals CEO, Andrew Cole said the PFS has confirmed the project can be a low carbon, low cost, long life mine producing copper and nickel, both in-demand minerals for the renewable and electrification industries.
“Building a viable asset in a remote part of Australia is challenging, but through our collaborative approach we have developed innovative off-grid renewable power and processing solutions, increased stakeholder awareness and involvement in the project and we have built confidence in the Mineral Resource itself. Furthermore, we have been able to reduce and eliminate a number of potential project risks.”
The study has identified a means to reduce the project’s carbon footprint significantly and overcome the historical challenge of affordable power for West Musgrave.
“We believe, supported by the views of potential renewable energy suppliers, that 70-80% of the power needs for West Musgrave can be supplied by renewable sources, supplemented by battery storage and diesel or trucked gas fired generation.”
The PFS base case assumes the power solution will be outsourced to a third party, with power purchased back over the life of the asset. However, further work is required in a future Feasibility Study (FS) to maximise the project’s power position. A gas pipeline is a secondary option to be further investigated during the next phase.
Mr Cole said a further significant reduction in carbon emissions and power demand can be achieved through the adoption of vertical roller mills as the grinding mill solution and a flotation flowsheet which achieves metal recovery at a much coarser grind size than was previously considered in the design.
“This lower power usage has resulted in a reduction in operating costs, while the use of dry grinding from the vertical roller mills has also resulted in an improvement in nickel recovery,” he said.
A remote operations centre will further reduce the site environmental footprint, with fewer people on site, fewer flights and a smaller accommodation village.
OZ Minerals will continue to sole fund the Nebo-Babel studies until the FS and decision to mine are delivered as per the current agreement. In respect of any amount funded by OZ Minerals, Cassini will be loan-carried for its 30% contribution, with principal and capitalised interest to be repaid five years after the commencement of production at West Musgrave.