OZ Minerals has given development of the $916 million Carrapateena copper-gold mine in South Australia the go ahead.
The Carrapateena project, which is forecast to be producing by the second half of 2019, is considered Australia’s largest undeveloped copper prospect.
OZ estimates output at Carrapateena to average 65,000 tonnes of copper and 67,000 ounces of gold a year over 20 years once it is built.
The company plans to begin a phased construction program at Carrapateena next month after releasing its feasibility study for the site.
OZ chairman Rebecca McGrath described Carrapateena as a robust, cash generating asset with expansion potential that sets the company up for further growth.
“This decision is a significant enabling step in realising our strategy to become a low cost multi asset copper miner delivering value for all stakeholders,” McGrath said.
The construction program will feature two phases, with the first segment to involve site infrastructure, including the accommodation village and airstrip, and continuing development of a dual access decline.
Its second phase, subject to mining lease approval, is scheduled to start in the second quarter of 2018. Phase two will involve construction of the processing plant and other above ground infrastructure, installation of the underground materials handling system, construction of the tailings storage facility, access roads and power access.
OZ chief executive officer Andrew Cole said the company’s confidence in the economics, constructability and operability of the Carrapateena project as a long life low cost mine has been further reinforced through the feasibility study phase.
“Carrapateena is now firmly established as a high quality project in its own right with opportunities identified including expanding the existing cave footprint and accessing satellite deposits,” Cole said.
“It also serves as a base for potential district development of nearby Fremantle Doctor and Khamsin.
“These future expansion options have been enabled by the improved mine design, but remain an upside to the current valuation.”
Meanwhile, OZ today reported that its first half profit had increased to $80.6 million, an improvement on the $29.5 million it recorded in the same period a year earlier.
The company said it has a cash balance of $624 million with no debt.