Proponents of a new A$480 million copper mine on South Australia’s Yorke Peninsula are evaluating financing options in regard to project funding and/or offtake agreements from a number of interests, including Chinese.
Addressing the second day today of the two day Paydirt 2018 South Australian Resources and Energy Investment Conference in Adelaide, Rex Minerals Ltd’s Project Director, Greg Hall, said a feasibility study currently underway by a Chinese engineering firm was due for completion in a number of months. Rex is also updating its internal feasibility study.
Any strong support to back the project from these quarters could see the initial 13 year Stage 1 of Rex’s proposed Hillside copper mine 12 km south of the coastal township of Ardrossan, in production initially as an open-pit operation.
Hall said the Chinese backed feasibility study was looking to see what further savings could be made to the mine’s start-up capital costs and what debt packages were feasible. Rex is also exploring other joint venture and investment options to get Hillside off the ground.
Regarded as Australia’s largest undeveloped open-pit copper mineral resource, Rex’s previous extended feasibility study (EFS) delivered All in Cash Costs of $1.88/lb for its reserve of some 500,000 t of copper metal, which is a subset of the resource of 2 Mt of copper and 1.4 Moz of gold.
The mine, for which a mining lease has already been approved, is forecast to deliver an average head grade of 0.62% Cu and 0.16 g/t Au, with an annual output of 35,000 t of copper concentrate and 24,000 oz of gold.
A possible Stage 2 will be evaluated in the future, and could cover production from years 13-26. The main orebody has been drilled out to approximately 600 m depth to deliver the current Mineral Resource and Ore Reserve.
The initial capital cost of A$480 million covers development of both the open-pit mine and the construction of an on-site processing plant. Hall said Rex anticipated further improvements from the currently ongoing feasibility study updates.
Once a final investment decision had been made, it would take six months firstly re-routing the main roads around the required mine site boundaries, followed by an 18 month mine construction schedule.
“On this basis, the earliest we could see a likely production start at Hillside would be by late in 2021 if final approvals, financing and Board approval were achieved during 2019,” Hall said.
