Mining Company, OZ Minerals Limited (ASX: OZL) has completed a scoping study on the Carrapateena block cave expansion. While releasing the scoping study, the company’s CEO Andrew Cole informed that the study has determined that converting the lower half of the sub-level cave with a block cave and expanding the annual throughput rate could create significantly more value than the sub-level cave alone.
Following the release of this news, the share price of the company increased by 2.268% in the intraday trade as on 6 March 2019.
As per the company’s announcement, converting the lower portion of the Carrapateena Sub Level Cave to a block cave could increase the life of mine average copper production to ~105 – 125 ktpa from 2026. Further, it could also reduce life of mine all-in sustaining costs to ~US 90 – 95 c/lb.
The scoping study has provided a high-level view of how a block cave could be constructed without affecting the operation of the Carrapateena Sub Level Cave which is currently in construction, or without reworking on current construction plans, as underground infrastructure being installed for the sub-level cave contemplates a potential increase in the 4.25 Mtpa rate.
Mr. Cole also informed that transitioning from a Carrapateena Sub Level Cave to the Block Cave Expansion would enable OZ Minerals to extract the higher-grade ore at the top of the orebody through the sub-level cave and the higher-grade material from the bottom of the resource through the block cave.
In the fourth quarter of 2019, the company is planning to complete the construction of the Carrapateena project. Further, the company is planning to conduct a pre-feasibility study on transitioning the bottom of the sub-level cave into a block cave with a production rate in the range of 10 to 12 Mtpa and expanding surface infrastructure to suit. The 2019 guidance for project studies and drilling commitments is now $75 – $80 million (up from $45 – $50 million)
The company has also released its Mineral resource statement for the Carrapateena copper-gold deposit which is an iron oxide copper-gold (IOCG) deposit in central South Australia (SA) located on the eastern margin of the Gawler Craton. This update is reflecting minor changes to price and exchange rate assumptions and the need to assess the amenability of the resource to exploitation by Block-Caving.
The Mineral Resource estimate is based on data from 106 drill holes for a total of 60,809 samples in mineralized domains. This Mineral Resource Statement is an update to the restated 2016 Mineral Resource.
Meanwhile, in the past three months, the share price of the company increased by 19.88% as on 6 March 2019. OZL’s shares are trading at $10.420 with a market capitalization of circa $3.36 billion as on 7 March 2019 (AEST 1:04 PM). It has a 52-week high of $10.990 and 52 weeks low of $$8.080 with an average volume of ~ 1,575,997.
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