Name and Location
Carrapateena copper/gold project, South Australia, Australia.

Client
OZ Minerals.

Project Description
An optimised prefeasibility study (PFS) on the project has addressed several risks and opportunities, allowing for a more defined project to be progressed to the next stage of the PFS.

The study plans to increase the project scope from the 2.8-million tonnes, envisaged in the scoping study, to four-million tonnes.

It also proposes the addition of a standalone concentrate treatment plant (CTP) for Whyalla. The CTP will remove deleterious, naturally occurring elements from the concentrate, thereby improving marketability.

It also has the added advantage of reducing the weight of the concentrate by up to 40%, resulting in dramatically reduced shipping and transport costs.

A blending facility will also be incorporated into the project to add further flexibility to OZ Minerals’ sales strategy.

The optimised PFS estimates production for the first three full years of production at 67 000 t/y of copper and 76 000 oz/y of gold, compared with 55 000 t/y of copper and 58 000 oz/y of gold estimated in the February scoping study.

The optimised PFS estimates life-of-mine production at 53 000 t/y of copper and 53 000 oz/y of gold, compared with 40 000 t/y of copper and 38 000 oz/y of gold in the scoping study.

Net Present Value/Internal Rate of Return
A combined enlarged Carrapateena project, including the CTP, will have a net present value (NPV), at a 9.5% discount rate, of A$800-million and an internal rate of return (IRR) of 24%.

Payback is estimated at six years.

The earlier scoping study estimated a post-tax NPV, at a 9.5% discount rate, of A$600-million and an IRR of more than 20%.

Value
Total preproduction capital in the optimised study has been estimated at A$975-million, compared with A$770-million in the scoping study.

It is expected that the enlarged project will be fully funded from existing cash and cash flows.

Duration
First production is expected in 2019.

Latest Developments
OZ Minerals has awarded the contract to build the Carrapateena decline to Australian company PYBAR Mining Services.

Valued at A$65-million, the contract entails the construction of a 20-m- deep box cut, 7 500 m of decline and lateral development, 1 500 m of surface ventilation raises and the supply of all surface infrastructure to support the development.

First firing for the decline is expected to take place in September this year.

The company reports that the decision to accelerate the decline by one year will strengthen the project economics, creating about A$90-million in NPV.

The South Australian government has invited OZ Minerals to submit the CTP at Whyalla for assessment as a major project. If granted, major project status will have significant benefits in terms of certainty and approval timelines.

OZ Minerals has also signed a nonbinding memorandum of understanding with the administrators of Arrium to explore possible site, infrastructure and port options at Whyalla.

On Budget and on Time?
Not stated.

Contact Details for Project Information
OZ Minerals investor relations, Tom Dixon, tel +61 8 8229 6628, or email tom.dixon@ozminerals.com.