OZ awards first construction Carrapateena mine

OZ awards first construction contract linked to multi-million dollar Carrapateena mine
Valerina Changarathil, The Advertiser
July 19, 2016 9:33am

COPPER-gold miner OZ Minerals has moved towards a major milestone related to its proposed multi-million dollar Carrapateena mine in the state’s far north, awarding its first $65 million contract on the project.

OZ Minerals has contracted PYBAR Mining Services to start construction of the 600m deep, 7,500m long Carrapateena decline in August.

Managing director Andrew Cole has previously justified going ahead with the capital cost of the construction of the decline to the ore before a final decision on the $975 million, 20-year mine, north of Port Augusta next year.

A mine at Carrapateena, potentially producing copper in 2019, would become South Australia’s second biggest mine after Olympic Dam, employing about 400 people.

A $150 million copper processing plant is also proposed for Whyalla, which will treat the ore from Carrapateena.

“Carrapateena has compelling project economics and by starting the decline now, we are further de-risking the project and creating more shareholder value,” Mr Cole reiterated.

“Building the decline now creates approximately $90 million in net present value.”

The tender for the decline attracted significant interest from international and domestic organisations, OZ Minerals said.

PYBAR was selected as a construction partner on its technical capability, commitment to safety, record for delivering according to plan and highly competitive price.

The scope of the work also includes surface ventilation raises, and supply of all surface infrastructure to support the development, including offices, a workshop and temporary power station.

Mr Cole said PYBAR will be a great partner as the company builds on the Carrapateena project.

“This is absolutely the time to be building a project as we are getting access to the best teams at the best prices.”
PYBAR will mobilise to site over the next two weeks with the first firing for the decline expected to take place in late September.

“When you look around the globe, Carrapateena has to be one of the most exciting and compelling new mining projects around,” said PYBAR chief executive Paul Rouse said.

Carrapateena is an iron-oxide copper-gold deposit located on the eastern margin of the Gawler Craton and is one of the country’s largest undeveloped copper deposits.

OZ Minerals also owns the Prominent Hill copper-gold mine, which employs 1200 workers, including contractors’ employees, and where it is spending millions to increase mine life by ramping up underground operations and constructing a second decline to its underground deposits.

As stated by Mr Cole, the company’s “single biggest control” factor is making sure its day-to-day operating cost is in the bottom half of the global cost curve.

Operating costs at Prominent Hill are at US70c per pound of copper and expected to be at US50c/pound for Carrapateena when it starts producing in 2019.


Good value... Still a good buy at current share price!
IMO DYOR