Sydney-based CBH Resources has unveiled a new higher-grade and lower throughput mine plan for its Endeavor operation, in central New South Wales, which it believes will keep the mine economically viable, despite low zinc and lead prices.
The company plans to reduce ore production in the year ended June 30, 2009, from 1,3-million tons to 940 000 t, which includes the current surface stockpile of 65 000 t.
Going forward, the operation will continue at a mining rate of 800 000 t/y, at a combined average zinc/lead grade of 11,5% in 2008/9, and an even-higher 12,4% the following year.
Grades are currently at around 9,4%.
By increasing the mine cut-off grade at Endeavor, the size of the overall mining reserve will decrease. However, at the planned reduced throughput rate, the life-of-mine is expected to remain above ten years, and mineralisation is open at depth and along strike to the north.
If metal prices improve, CBH will also have the ability to ramp up output “relatively quickly”, the firm said.
According to the new plan, the mine is expected to produce 111 400 t of zinc concentrate and 57 500 t of lead concentrate in 2008/9, compared with 91 900 t of zinc concentrate and 42 600 t of lead in the 12 months ended June 30, 2008.
“The new operating plan for Endeavour will significantly improve the reliability of the mine in a number of ways, by reducing the amount of ore dilution, improving grade control and predictability, increasing mine stability, and reducing backfilling requirements,” the company said.
CBH expects to save as much as $56-million in the 2008/9 financial year, in capital and operating costs, as a result of the new mine plan.
“Endeavor is projected to achieve an operational breakeven financial position at current metal prices, and will be in a strong position to increase both production and profitability as metal prices improve,” the firm said.
Last month, Vancouver-based Teck Cominco and its partner Xstrata Resources announced that they would close their Pillar zinc mine, in Australia, prematurely because of slumping metal prices, which were compounded by a strong Australian currency.