OZ Minerals upgrades guidance on back of Carrapateena, Prominent Hill performance

The Carrapateena mine. Image: OZ Minerals

OZ Minerals has improved its outlook for 2020 based on strong performance during the first half of the year, including ramp-up of production and cost reductions at the Carrapateena and Prominent Hill mines in South Australia.

The company now aims to produce 88,000–105,000 tonnes of copper, up from 83,000–100,000 tonnes.

OZ Minerals’ copper production at Carrapateena went up from 2495 tonnes in the first quarter of this year to 7170 in the following quarter.

The company’s gold production guidance was also lifted from 207,000–234,000 ounces to 227,000–249,000 ounces on the back of solid performance at both Carrapateena and Prominent Hill.

OZ Minerals delivered higher gold output at the Carrapateena and Prominent Hill mines in the June quarter, totalling 14,423 ounces and 52,725 tonnes against 5041 ounces and and 49,049 tonnes in the previous quarter, respectively.

This production achievement is replicated in OZ Minerals’ cost performance, with its 2020  guidance now reduced.

“The ramp-up at Carrapateena has continued to exceed expectations with increases to both copper and gold production and lower AISC (all-in sustaining cost) and C1 costs now expected for 2020,” OZ Minerals managing director and chief executive Andrew Cole said.

“This strong performance has provided the confidence to release ~$45 million of the ~$150 million deferred expenditure announced in March that will benefit production beyond 2020.

“… The Carrapateena block cave expansion pre-feasibility study demonstrated conversion of the lower portion of the current sub-level cave to a series of block caves significantly increases value, ore reserves and mine life, enabling a multi-generational, lowest quartile cash cost producing province.”

Stage one of the block cave expansion feasibility study is under way, with completion expected late next year, Cole said.

Expansion studies to unlock Prominent Hill’s underground potential have continued to advance towards outcomes release this year.

OZ Minerals is operating at an annualised underground haulage run rate of around 3.8 million tonnes a year at Prominent Hill in the June quarter. It delivered 954,000 tonnes of ore at 1.5 per cent copper.

The company has not identified any positive COVID-19 cases at either the Prominent Hill or Carrapateena mine, but those affected in Brazil are in single digits and recovering at home.

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