PERTH (miningweekly.com) – Copper-gold miner Oz Minerals has offered a ray of hope to the community of Whyalla, in South Australia, revealing plans to construct a concentrate treatment plant (CTP) as part of the development of an enlarged Carrapateena project.

The miner on Friday unveiled plans to increase the scope of the Carrapateena project from the 2.8-million tonnes considered in an earlier scoping study, to 4-million tonnes, following additional optimisation work.

The company would also construct a standalone CTP facility at Whyalla, which Oz said would allow for cheaper access to skilled labour, port, rail, roads, power and gas facilities.

A February scoping study of the Carrapateena project revealed that a 2.8-million-tonne-a-year project would require a capital injection of A$770-million and could deliver a mine life of some 20 years, producing 55 000 t of copper and 58 000 oz of gold within the first three full years of production, as well as life-of-mine (LoM) production of 40 000 t/y of copper and 38 000 oz/y of gold.

The scoping study estimated that the project would have a net present value (NPV) estimate of over A$600-million and an internal rate of return (IRR) of at least 20%.

However, Oz Minerals told shareholders on Friday that a combined enlarged Carrapateena project and the proposed CTP would have a NPV of around A$800-million and an IRR of 24%.

The projects would also deliver a combined LoM net cash flow before tax of A$4.8-billion.

Total preproduction capital was estimated at A$975-million, of which the CTP would account for A$150-million.

In the first three years of production, the enlarged project would produce some 67 000 t of copper and 76 000 oz of gold, while LoM production was estimated at around 53 000 t/y of copper and 53 000 oz of gold.

Oz Minerals MD and CEO Andrew Cole said that the larger Carrapateena project would now be taken through an accelerated prefeasibility process, while the construction of the mine’s decline would start immediately, once the tender process was complete.

“The larger Carrapateena project is very compelling. With such strong financial metrics, we have decided to commence development of the mine’s decline and accelerate the prefeasibility study with a larger 4-million-tonne-a-year scope, with the aim of first copper concentrate production in 2019,” said Cole.

The South Australian government had, meanwhile, welcomed Oz’s plans for the CTP at Whyalla, with Treasurer Tom Koutsantonis inviting the company to submit the CTP as a Major Project.

If granted, a Major Project status would have significant benefits in terms of certainty and approval timelines.

The proposed CTP would create more than 100 jobs in the construction phase between 2017 and 2019, and around 100 ongoing jobs.

The plant would bring some relief to a number of workers in the region who were affected by ASX-listed Arrium going into voluntary administration earlier this year, which casts doubt on the future of the Whyalla steel refinery.

Cole said on Friday that Oz Minerals had now signed a nonbinding memorandum of understanding with the administrators of Arrium to explore possible site, infrastructure and port options at Whyalla.

“The government will work with Oz Minerals and Arrium to ensure the speediest and best outcome for this project,” said Koutsantonis.

It was expected that the enlarged Carrapateena project and the CTP would be fully funded from existing cash and cash flows, and would provide a second operational asset to complement the existing Prominent Hill operation, while allowing Oz Minerals to remain debt free.