AZY 100% development options, page-68

Shaw and Partners, "Minyari Dome Can Stand-Alone"


Minyari Dome a Standalone Development… or Telfer Ore Source?

Although we see value in Minyari Dome as a potential stand-alone development, we remain of the view that it is a logical ore source for Newcrest’s Telfer operation which is 35km away.

Telfer currently operates two 11Mtpa milling trains for total processing capacity of 22Mtpa. Telfer is nearing depletion of its ore Reserves, with ore from nearby Havieron currently expected to feed the Telfer plant post FY24. Havieron ore is planned to be processed through a modified Telfer plant to operate a single train at 6Mtpa on a campaign basis. To us, it seems logical to process a nearby ore source like Minyari prior to downsizing the plant.

We also note that the Minyari Dome grades are 1.6g/t gold and 0.19% copper versus Telfer West Dome Reserve grades of 0.58g/t gold and 0.052% copper. Hence, we see reasonable likelihood that Minyari would rank as a more profitable ore source than the next cut back at Telfer (pending costs of acquisition/other) given: 35km proximity; mineralisation at surface; and, superior grade to current Telfer open pit Resources.

Potentially adding urgency to secure incremental ore sources for the Telfer plant, Newcrest reported slow progress at the Havieron development in their March 2022 quarterly report, noting “the development of the exploration decline continued to experience poor ground conditions during the quarter… Advance rates have been significantly impacted by unfavourable geotechnical and hydrogeological conditions requiring extensive local and surface dewatering, pre-excavation ground treatment and substantial ground support installation”.

The Havieron decline started in May 2021. Only ~313 metres of decline completed in up to 20 April 20222. At a typical 1 in 7 decline inclination, that’s just 45 vertical metres achieved of the required 430 vertical metres of cover to reach the top of the orebody. Being mineralised at surface, we expect Minyari Dome will look increasingly attractive as a potential Telfer ore source should access issues to the Havieron orebody be ongoing.