SYDNEY (miningweekly.com) – Copper/gold miner Oz Minerals would delay the development of the exploration decline at its Carrapateena project, in South Australia, chairperson Neil Hamilton told shareholders this week.

Oz Minerals had previously planned to appoint a contractor to start the decline at the end of the year; however, contract bids received so far had been significantly higher than initial estimates.

In June last year, the Oz Minerals board approved the construction of an exploration decline to allow access to the orebody to conduct geotechnical works. This will provide the necessary information to determine the most appropriate mining technique for the deposit.

Hamilton stated at the company’s annual general meeting, which was held in Melbourne, that early-stage costings and the recently tendered prices had indicated that the parallel development of the exploration decline, while undertaking a prefeasibility study (PFS), would add additional expenses and potential risk to the project.

He noted that Oz Minerals would not award any contract for work on the exploration decline until it completed the PFS and further metallurgical testing.

“While this decision may slightly delay the potential start of the Carrapateena project, we believe these changes to the project timeline are appropriate in the measuring and controlling of risks to the viability of the project,” he said.

“We will continue with drill testing the Khamsin and Fremantle Doctor prospects around Carrapateena, while balancing exploration spend and potential value accretion,” said Hamilton.

A decision to mine the Carrapateena project was expected by mid-2015, and Hamilton noted that Oz Minerals was keen to examine the development options for the mine “on the earliest sensible timeline”.

“In Carrapateena, we have a very exciting prospect of potentially significant value to our shareholders. It is, however, a major undertaking and one that we can only execute against a series of carefully measured key milestones that help us manage the risk and enable us to confirm the viability of what will be a very significant investment.”