Supporters of a new AU$480 million copper mine on South Australia’s Yorke Peninsula are evaluating financing options in regard to project funding or offtake agreements from a number of interests, including Chinese.
Rex Minerals’ flagship Hillside Project is situated 12 kilometres south of the township of Ardrossan on the Yorke Peninsula, South Australia. Copper-gold mineralisation was first discovered at the Hillside Copper Project by Rex Minerals 2008.
Rex Mineral’s Project Director, Mr Greg Hall, said a feasibility study currently underway by a Chinese engineering firm was due for completion in a number of months. Rex is also updating its internal feasibility study.
Targeting of the project was based on the presence of a small historical copper mine, a broad magnetic feature and subtle gravity anomalies in the area. The project was also the first test of a larger theory that iron-oxide-copper-gold (IOCG) style mineralisation could exist underneath the thin cover rocks on the Yorke Peninsula in South Australia.
Any strong support to back the project could see the initial 13-year Stage 1 of Rex’s proposed Hillside copper project in production initially as an open-pit operation.
Mr Hall said the Chinese backed feasibility study was looking to see what further savings could be made to the mine’s start-up capital costs and what debt packages were feasible. To get the project off the ground, Rex is additionally exploring other joint venture and investment options.
Regarded as Australia’s largest undeveloped open-pit copper mineral resource, Rex’s previous extended feasibility study (EFS) delivered All in Cash Costs of US$1.88/lb for its reserve of some 500kt of copper metal, which is a subset of the resource of 2 million tonnes of copper and 1.4 million ounces of gold.
The mine, for which a mining lease has already been approved, is forecast to deliver an average head grade of 0.62% Cu and 0.16g/t Au, with an annual output of 35,000 tonnes of copper concentrate and 24,000oz pa of gold.
A possible Stage 2 will be evaluated in the future, and could cover production from years 13-26. The main ore body has been drilled out to approximately 600 metres depth to deliver the current Mineral Resource and Ore Reserve and more than 4160 million has been spent at the site to date.
The initial capital cost of A$480 million covers development of both the open pit mine and the construction of an on-site processing plant.
Mr Hall said the Company anticipated further improvements from the currently ongoing feasibility study updates.
Once a final investment decision has been made, it would take six months firstly re-routing the main roads around the required mine site boundaries, followed by an 18-month mine construction schedule.
“On this basis, the earliest we could see a likely production start at Hillside would be by late 2021 if final approvals, financing and Board approval were achieved during 2019,” Mr Hall said.