Engineering & Mining Journal

JUN 2016

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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REGIONAL NEWS - AUSTRALIA/OCEANIA 16 E&MJ; • JUNE 2016 www.e-mj.com OZ Study Raises Carrapateena Mine Output to 4 Million t/y OZ Minerals has increased the scope of an ongoing prefeasibility study of its Carrapateena underground copper-gold project in South Australia to include mine production of 4 million metric tons per year (mt/y), up from a previously consid - ered 2.8 million mt/y. The study is also evaluating construction of a concentrate treatment plant at the port of Whyalla on the Spencer Gulf, about 200 km south of the Carrapateena project site. As of early May, OZ was expecting to award a contract by the end of June for mining of a decline to access the Carra- pateena orebody. By starting construction of the decline at this time, the company anticipates that the underground mine can begin generating operating cash fow in 2019. Concentrates produced at the Carra- pateena site will be transported to the Whyalla concentrate treatment plant for removal of deleterious elements, there- by improving marketability. The plant will also reduce the weight of the con- centrate by up to 40%, dramatically re- ducing the cost of shipping and trans- port to customers. Total preproduction capital expen- ditures for the Carrapateena mine and concentrator and the Whyalla plant are estimated at about A$975 million. Pro- duction during the frst three years of operation is estimated at about 67,000 mt/y of copper and 76,000 oz/y of gold in concentrate. "The larger Carrapateena project is very compelling," OZ Managing Director and CEO Andrew Cole said. "With such strong fnancial metrics, we have decided to commence development of the mine's decline and accelerate the prefeasibility study with a larger 4-million-mt/y scope, with the aim of frst copper concentrate production in 2019." Recent prefeasibility study optimi- zation work has addressed a number of risks and opportunities, allowing a more defned project. This work included: • A sublevel cave dilution study that con- frmed that dilution from the overburden does not pose a material risk to the ore grade. The deposit will cave appropri- ately and the previously used dilution assumptions are valid. • A conveyor study that determined that a conveyor capable of hauling the re- quired tonnage can be installed within a single decline. The installation will allow for a rapid ramp-up of production, negate the need for a second decline or shaft, remove the need for haulage trucks, and reduce mine operating costs. The conveyor option also provides fexibility for future capacity increases. A drilling program is currently un- der way at Carrapateena to collect sam- ples for metallurgical test work and to support a potential upgrade of the re- source classifcation. Study Maps Future Path for Frieda River Project PanAust Ltd. has reported the results of a new feasibility study of the Frieda River copper-gold project in Papua New Guinea that contemplates initial development of a large open-pit operation based on ap- proximately one-quarter of the project's resources. Plant feed to a conventional processing plant would average about 40 million mt/y to produce averages of 175,000 mt/y of copper and 250,000 oz/y of gold in concentrate over a mine life of 17 years. The project would have life-of-mine average cash costs of $0.69/lb copper. Preproduction capital to develop the proj - ect is estimated at $3.6 billion, excluding the mobile mining feet and an oil-fred power generation facility. The proposed open-pit mine would be a large-scale truck and shovel operation. Mine production would average 190,000 mt/d of total material moved, prioritizing higher-grade mineralization and deferring waste. The life-of-mine strip ratio would average 0.67:1 (waste:ore), and life-of- mine mill feed totaling 700 million mt would have an estimated average grade of 0.50% copper and 0.29 g/mt gold. PanAust owns 80% of the Frieda River project and Highlands Pacifc holds the remaining 20%. Under the joint-venture agreement, there is a process for an inde- pendent expert to be appointed to provide feedback and peer review of the complet- ed feasibility study. Frieda River is one of the largest unde- veloped copper-gold projects in the world. The total mineral resource is estimated at more than 2.7 billion mt at an average grade of 0.42% copper and 0.23 g/mt gold, containing 12 million mt of cop- per and 19 million oz of gold. PanAust considers that the optimum approach to development will be multistaged, with the initial project stage forming a platform for subsequent phases of exploration, re- source defnition and development. The Frieda River project is located on the border of the Sandaun and East Sepik provinces in northwest Papua New Guin- ea. Because of the project's remote loca- tion and lack of infrastructure, a reliable logistics chain has been defned to oper- ate between the coastal town of Wewak in East Sepik province and the mine site. The system combines high-capacity river barges operating along the Sepik River with a new access road and pipelines to deliver fuel to the site and to export cop - per-gold concentrate. A new airport would be constructed 40 km from the mine site to service 50-seat passenger aircraft. Permitting and associated commun- ity consultation and environmental studies are expected to take approxi- mately two years. Following permitting, construction would take approximately six years, leading to potential production in 2024-2025. Drilling is currently under way at Carrapateena to sup- port a potential upgrade of the resource classifcation. (Photo: OZ Minerals)

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