OZ Minerals pleased with Prominent Hill gold trial results

THE BOURSE WHISPERER: OZ Minerals (ASX: OZL) has completed a gold trial at its Prominent Hill processing plant.

The company said the trial had confirmed the plant’s ability to process existing gold ore stockpiles in a blend with copper ore at 8.7 million tonnes per annum as well as identifying optimisations that will result in an estimated blended throughput of 9.5 million tonnes per annum.

As part of the mine plan to prioritise copper production, maximise the efficiency of the open pit mining contract and keep the processing plant at or near full capacity until at least 2022, OZ Minerals has built up a sizeable stockpile of gold ore as a by-product of mining copper ore.

In December 2015, the company carried out a one week trial at Prominent Hill to process an ore blend containing approximately 60 per cent gold ore, which it explained to be indicative of the expected plant ore feed from 2020 to 2022.

The trial was conducted to assess the impact of a high gold ore blend on plant throughput and recovery.

The results outshone a previous trial completed held in 2013 and highlighted a potential optimised circuit that could push throughput of 60 per cent gold ore to 9.5 million tonne per annum.

Although it is relatively low in grade, the stockpile has been mined as the company accesses the higher grade copper ore first, therefore the cost of creating the stockpile is a sunk cost.

OZ Minerals considers the gold ore stockpile will be an excellent de-risked source of cash flow between 2020 and 2022.

“These strong trial results reaffirm our ability to run Prominent Hill at or near full capacity until 2022,” Oz Minerals managing director and CEO Andrew Cole said in the company’s announcement to the Australian Securities Exchange.

“The cost of building this stockpile has already been incurred so we expect to generate significant cash flow from processing the stockpile in addition to our underground ore in future years.”

As at 30 June 2015, gold ore on the stockpile was estimated at 11 million tonnes of Proved Ore Reserves at 0.7 grams per tonne gold, 2.4g/t silver and 0.1 per cent copper.

Recoveries of gold and silver were broadly in line with existing recovery metrics returning a book value of the gold ore stockpile at 30 June 2015 of $142 million.

Website: www.ozminerals.com