THE BOURSE WHISPERER: OZ Minerals (ASX: OZL) and Cassini Resources (ASX: CZI) finally delivered the long-awaited results of the West Musgrave, Nebo-Babel Pre-Feasibility Study (PFS).
The West Musgrave project in Western Australia is a Joint Venture between OZ Minerals (70%) and Cassini (30%).
The PFS has determined a long life for the project, coming in with an approximate 26-year open pit copper and nickel sulphide mine.
The study also delivered a maiden Probable Ore Reserve of 220 million tonnes at 0.36 per cent copper and 0.33 per cent nickel, representing around 22 years of the estimated 26-year life of mine with the balance of the mine life underpinned by a combination of Indicated and Inferred Mineral Resource.
The study included an innovative 50MW base case power supply proposal that will use a hybrid solar-wind-battery-diesel solution, although a gas pipeline remains a secondary option.
Baseline data collected since 2018 has demonstrated a high quality, consistent solar and wind resource is available, with higher wind velocities at night offsetting the lack of solar.
Although the current base case assumes power will be purchased under a Power Purchase Agreement arrangement, the final ownership structure for power assets will be further considered during the next phase of project development.
Modelling has demonstrated that around 70 to 80 per cent renewables penetration can be achieved for the site, with the current mix modelled to be an optimised mix of wind, solar and diesel supported by a battery installation.
The JV declared that should the renewables option be implemented, this innovative power supply solution would make West Musgrave one of the largest fully off-grid, renewable powered mines in the world.
The solution would result in the avoidance of in excess of 220,000 tonnes per annum of carbon dioxide emission compared to a fully diesel-powered operation.
“The Pre-Feasibility Study is now complete and has confirmed the project can be a low carbon, low cost, long life mine producing copper and nickel, both in-demand minerals for the renewable and electrification industries,” OZ Minerals CEO Andrew Cole said in the company’s announcement to the Australian Securities exchange.
“Building a viable asset in a remote part of Australia is challenging, but through our collaborative approach we have developed innovative off-grid renewable power and processing solutions, increased stakeholder awareness and involvement in the project and we have built confidence in the Mineral Resource itself.
“Furthermore, we have been able to reduce and eliminate a number of potential project risks.”
OZ Minerals will continue to sole fund the Nebo-Babel studies until the FS and decision to mine are delivered as per the current agreement.
In respect of any amount funded by OZ Minerals, Cassini will be loan-carried for its 30 per cent contribution, with principal and capitalised interest to be repaid five years after the commencement of production at West Musgrave.
“Completion of the PFS is a significant milestone for the West Musgrave Project and all its stakeholders,” Cassini Resources managing director Richard Bevan said.
“The high quality PFS demonstrates the strategic value of this project by confirming robust economics on a long life, low operating cost copper and nickel mine at the Nebo-Babel deposits.
“The province offers the potential to add value to the project over time with continued exploration and development activities.”