OZ Minerals has released its annual Prominent Hill Mineral Resource and Ore Reserve Statement for 2011. Copper in Resources has increased while gold has decreased. Copper and gold in Reserves have decreased due to depletion by mining.
Mineral Resources have changed from 285 million tonne at 0.90% copper, 0.8g/t gold for 2,542kt copper and 7.2 million ounces of gold in 2010 to 272.7 million tonne at 0.98% copper, 0.7g/t gold for 2,678kt copper (or 5.9 billion pounds of copper) and 6.3 million ounces of gold.
Overall, copper metal in Resources increased with the inclusion of the newly defined Kalaya Resource as well as an increase in the Ankata Resource. This was despite a reduction in copper metal as a result of the reclassification of some ‘Near Surface’ Resource that was reported in 2010, to an ‘Underground’ Resource in this update. The reclassification involved a change in cut-off grade from 0.3% copper to 0.5% copper. There was also a reduction of approximately 6.5 million tonne of copper ore in the Malu Pit Resource in the 12 months to June 2011 from mining depletion.
Gold metal in Resources has decreased as a result of additional surface drilling and subsequent re-interpretation in the Kalaya Resource (previously reported as the Munda Zone) as well as changing the cut-off grade for the material that was previously classified as ‘Near Surface’ to 1.0g/t gold (previously 0.5g/t).
Ore Reserves have decreased from the 2010 estimate of 75 million tonne at 1.21% copper, 0.67g/t gold for 905kt copper and 1.6 Moz gold to 72.3Mt at 1.13% copper and 0.64g/t gold for 818kt copper (or 1.8 billion pounds of copper) and 1.5 million ounces of gold.
Copper and gold in Reserves have decreased due to mining depletion. The average copper grade of the Reserve is lower due to an increase in gold ore however the copper grade of the copper ore is materially unchanged. Reductions in the Reserve were offset by improved reconciliation of the Resource model to ore processed and ore added due to higher commodity prices used in the estimation of the Reserve.
The cut-off date for drilling data which contributed to this annual update was 30 June 2011. Drilling results received from the Kalaya zone in the second half of 2011 can be included in the 2012 update. The June 2010 Resource update was released in November 2010.
Underground diamond drilling commenced in July 2011 and will initially focus on the Upper Kalaya Resource from the Ankata decline. Information from this drilling campaign will be included in the 2012 Resource update. The Malu exploration decline development is progressing well and delineation drilling of the Malu Resource beneath the pit is expected to commence in mid-2012. This will be available to inform future mining studies.
Mr Terry Burgess MD and CEO of OZ Minerals said that “We have grown the global copper Resource base through the reporting of a maiden Resource for the Kalaya underground mineral zone. Copper and gold Reserves in the Malu pit have decreased in line with depletion from mining. The newly estimated global copper grade is slightly lower due to the inclusion of further tonnes of gold Reserves. The various ore types are mined, stockpiled and treated separately so this has no effect on production feed grades, until later when the additional lower grade gold Reserves are treated.”
“Our focus for extending mine life is now on upgrading the Resources in the upper levels of the Malu zone, in the 300 metres immediately beneath the pit, with a view to development of a second underground mine to be developed in conjunction with the open pit. An exploration decline to access this area is expected to be completed half way through 2012, after which drilling can commence. The next step in 2012/2013 will be to further investigate the potential in both the Kalaya zone, and the deeper Malu mineralization to assess mining possibilities after the life of the open pit.”
