The project is a joint venture between OZ Minerals (70 per cent) and Perth-based explorer Cassini Resources (30 per cent).
If it goes ahead, the mine would be the first in the broader West Musgrave province, which is in Western Australia not far from its border with South Australia and the Northern Territory.
OZ Minerals is also aiming for the mine to be powered by up to 80 per cent renewable energy and have a reduced carbon footprint with fewer people on site and a smaller accommodation village courtesy of a remote operations centre.
The Nebo-Babel Pre-Feasibility Study results are being assessed under the OZ Minerals’ capital allocation framework ahead of a potential future feasibility study.
In a statement to the Australian Securities Exchange this morning, OZ Minerals CEO Andrew Cole said the study confirmed the project can be a low carbon, low cost, long life mine producing copper and nickel, both in-demand minerals for the renewable and electrification industries.
“Building a viable asset in a remote part of Australia is challenging, but through our collaborative approach we have developed innovative off-grid renewable power and processing solutions, increased stakeholder awareness and involvement in the project and we have built confidence in the mineral resource itself,” he said.
“During 2019 sufficient drilling has been completed to allow the declaration of a maiden Ore Reserve of 220Mt at 0.36 per cent copper and 0.33 per cent nickel, which is underpinned by the Pre-Feasibility Study.”
“We are pleased the study has identified a means for us to reduce the project’s carbon footprint significantly and overcome the historical challenge of affordable power for West Musgrave.
“We believe, supported by the views of potential renewable energy suppliers, that 70-80% of the power needs for West Musgrave can be supplied by renewable sources, supplemented by battery storage and diesel or trucked gas fired generation.”
OZ Minerals Chief Commercial Officer Mark Irwin said lessons learned from the successful development of the Adelaide-based company’s Carrapateena copper-gold project, which began processing its first ore in December, could be applied to West Musgrave.
“The project focus will now be on progressing critical path activities including government approvals, engineering partner selection and field activity preparation,” he said.
OZ Minerals will continue to sole fund the Nebo-Babel studies until the feasibility study and decision to mine are delivered as per the current agreement with Cassini.
The company’s share price was up 33 cents to $10.39 at 1pm following this morning’s announcement.
Meanwhile, global copper prices have been tumbling over the past fortnight on the back of concerns over coronavirus – from $2.88 (USc/lb) on January 14 to $2.56 yesterday.
And a Committee for the Economic Development of Australia (CEDA) report, released this morning, is forecasting lower copper prices by the end of this year, compared with the end of 2019.
But Adelaide University deputy director of the SA Centre for Economic Studies Steve Whetton told InDaily lower copper prices are unlikely to have a material impact on the South Australian economy unless one of the major miners decides to shelve existing exploration plans.
“Most of the copper-related exploration activity is booked in … around existing deposits,” said Whetton.
“The only risk is, depending on how flexible (mining company) BHP’s general expansion plans are at Olympic Dam.
“A reduction in copper prices without a reduction of volumes … isn’t going to have an impact on GDP.”
Oz Minerals was ranked number four in InDaily’s 2019 South Australian Business Index – an independent ranking of the state’s top 100 companies.
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