Copper Hill – Potential Early Start-up Under Investigation

A possible 30 million tonne start-up pit with head grades of 0.5% copper and 0.5g/t gold is being planned

  • Lower capital cost
  • Faster time-line to production
  • Water and power requirements reduced
  • Regulatory approval process will be much less complex
  • Higher grades, with an initial 10Mt pit at 0.50% copper and 0.66g/t gold

At this stage the mostly likely development strategy is for an initial mining rate of about 2 to 3 million tonnes per annum (Mtpa), and a staged build-up that minimises up-front capital, in association with selective high grade mining and low grade stockpiling to maximize cash flow in the early years.
The base case is using metal prices, appropriate for Definitive Feasibility Studies, of US$6,000/tonne for copper and $1,000/ounce for gold, an exchange rate of 1:1 and metal recoveries of 75% for copper and 45% for gold. Indications are that a start-up pit containing 30 million tonnes of ore with head grades of 0.45% copper and 0.50g/t gold will deliver a profitable mining operation. If events unfold in the way many economic analysts predict, with sustained high copper and gold prices, then the project may be scaled up accordingly.
The start-up project proposed delivers a greatly improved risk-return investment profile for Copper Hill. Among the other benefits are a smaller pit-waste-tailings footprint, a smaller mining fleet and lower power costs.
Work is underway preparing for the next Resource Estimate. Metallurgical testing to improve recoveries using the new core samples has commenced in Australia at Metcon Laboratories. Capital, mining and processing cost estimates are being reviewed, and the latest site layout configurations will all be used to update the evolving mine plans through July and August 2011. Metallurgical test-work will also be carried out in China under CUMIC’s supervision and samples, matching those being tested in Australia, have been despatched to Beijing.
Current studies indicate favourable economic returns in mining from the 30Mt open pit shown in figure 1 below. Within this pit is a 10Mt resource with grades of 0.50% copper and 0.66g/t gold. The next few months will see this plan crystallize as detailed mine designs, schedules, costings and improved metallurgical understanding are combined to provide more data for the on-going Definitive Feasibility Study.
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