Oz Minerals’ West Musgrave project in central Australia has the potential to produce 28,000 tonnes of copper and 22,000 tonnes of nickel a year for 26 years, according to a pre-feasibility study released today.
The project is a joint venture between Adelaide-based OZ Minerals (70 per cent) and Perth-based explorer Cassini Resources (30 per cent). If it goes ahead, the mine would be the first in the broader West Musgrave province, which is in Western Australia not far from its border with South Australia and the Northern Territory.
Oz Minerals is also aiming for the mine to be powered by up to 80 per cent renewable energy and have a reduced carbon footprint with fewer people on site and a smaller accommodation village courtesy of a remote operations centre.
The South Australian company announced the findings to the Australian Securities Exchange this morning, resulting in a 3 per cent increase in its share price to $10.38.
The Nebo-Babel Pre-Feasibility Study results are being assessed under the OZ Minerals’ capital allocation framework ahead of a potential future feasibility study.
OZ Minerals CEO Andrew Cole said the study 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,” he said.
“During 2019 sufficient drilling has been completed to allow the declaration of a maiden Ore Reserve of 220Mt at 0.36 per cent copper and 0.33 per cent nickel, which is underpinned by the Pre-Feasibility Study.”
“We are pleased the study has identified a means for us 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 per cent of the power needs for West Musgrave can be supplied by renewable sources, supplemented by battery storage and diesel or trucked gas fired generation.”
OZ Minerals describes itself as a modern mining company and has major copper-gold mines, Prominent Hill and Carrapateena, operating in South Australia.
Chief Commercial Officer Mark Irwin said lessons learned from the successful development of the Adelaide-based company’s Carrapateena project, which began processing its first ore in December, could be applied to West Musgrave.
“The project focus will now be on progressing critical path activities including government approvals, engineering partner selection and field activity preparation,” he said.
OZ Minerals will continue to sole fund the Nebo-Babel studies until the feasibility study and decision to mine are delivered as per the current agreement with Cassini.
The Nebo-Babel deposits were discovered by Western Mining in 2000 and acquired by BHP in 2005. In 2014 Cassini Resources acquired the project and set about an extensive drilling and study program culminating in a 2015 Scoping Study.
OZ Minerals entered into a Joint Venture with Cassini in 2016 and a Further Scoping Study was completed in late 2017. Since then OZ Minerals has increased its ownership of the project to 70 per cent by reaching expenditure thresholds.