OZ Minerals mine on track for production within weeks
First production at OZ Minerals’ new copper-gold mine is weeks away with the site in the state’s Far North hitting some key milestones during the September quarter.
SA Business
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Copper-gold producer OZ Minerals has started first production drilling at its under-development Carrapateena mine, which remains on track for its first saleable concentrate next month.
The company released its September quarterly update on Wednesday, which came in ‘softer’ than expected for some analysts.
The $920 million-$950 million copper and gold mine in the Far North will be the second major mine for OZ Minerals in SA, with the Prominent Hill mine near Coober Pedy staying on track to produce 103,000-115,500 tonnes of copper.
At Carrapateena, more than 180,000 tonnes of development ore is stockpiled on surface.
“Production drilling has commenced on the first production level and underground decline development has moved beyond the fifth production level access,” the company said.
The site is connected to grid power network with the crucial minerals processing plant in completion and commissioning phase.
The current, final quarter of the year has the company “firmly focused” on internal targets it has set for both operations.
OZ Minerals chief executive Andrew Cole said its two major assets are well positioned.
“Prominent Hill production is expected to end the year comfortably within guidance,” he said.
“Looking ahead to the end of the year, we are firmly focused on delivering first saleable concentrate at Carrapateena and achieving our forecast production, cost and other targets at Prominent Hill.”
The cash balance was $195 million at the end of September after a $150 million cash
investment into the Carrapateena project and $26 million of dividend payments, other growth
project investment and tax payments.
Prominent Hill produced 23,100 tonnes of copper and 28,844 ounces of gold during the quarter.
In a note to clients, Royal Bank of Canada (RBC) Capital Markets analyst Paul Hissey said it was a “softer quarter from OZL relative to RBC estimates primarily on the back of lower copper and gold production from Prominent Hill, which affected C1 performance”.
“We reiterate our view that successful delivery of Carrapateena over the next 12 months is the key catalyst for OZL given its significance to valuation,” Mr Hissey said.
“On our estimates, OZL can continue funding the remaining development capital (A$280 million) from its existing and operating cash flows.
“OZL should continue to appeal to investors seeking copper exposure, though it currently screens as fairly valued on our estimates.”