OZ Minerals plans to consolidate its Brazilian copper and gold assets through a strategy of operating multiple small and mid-sized mines in each of the Carajás and Gurupi provinces.
The company announced the strategy as part of a Brazilian operational update, which looked at the assets it acquired last year from Avanco Resources for $430 million.
OZ Minerals’ acquisition of Avanco gave it a “strategic foothold” in the Brazilian provinces, according to chief executive officer, Andrew Cole.
“The review focused on increasing our understanding of each asset and how value could be optimised within our existing risk framework and in line with our developed operating model,” he said.
OZ Minerals revealed its studies indicated a limited future for the small operating copper mine at Antas. However, cash flow will be marginally positive over the remainder of the mine’s life as costs reduce from 2020 following completion of the open pit cutback.
“We did not purchase Avanco for the small Antas operating mine, however, it has provided us with a strong entry point into Brazil in terms of mining and process expertise,” Cole said.
“Antas is the foothold into the Carajás we sought as part of the acquisition.”
OZ Minerals is also working on a potential Pedra Branca base case for an underground mine with capacity of 1-1.2 million tonnes per annum, with ore processing to take place at the Antas Carajás processing hub.
Depending on the timing of further studies, Pedra Branca could begin run-of-mine ore trucking by mid-2021.
The company has also strengthened its potential in the Gurupi province after completing a pre-feasibility study at the CentroGold project.
CentroGold has the potential to be a 10-year, low cost, open pit operation with average gold production of 100,000-120,000 ounces per annum in the first two years, according to OZ Minerals.
The project also has the potential to become a Gurupi processing hub servicing nearby deposits such as Chega Tudo, eight kilometres to the site’s west, according to Cole.
OZ Minerals also recently acquired the Jiboia exploration tenements to the north of CentroGold from Kinross, which has expanded the company’s presence in the Gurupi province.
The update of the company’s Brazil operations means the company’s “confidence has grown in the value of the Brazil acquisition,” according to Cole.
“The foundations are in place for a long-term sustainable position in each province in line with OZ Minerals’ province strategy,” he said.
“The processing hubs enable us to build and grow our presence, servicing current projects and the extensive exploration pipeline, by reducing capex, accelerating projects to production and maximising the value of existing infrastructure.”