Mining firm OZ Minerals is planning to invest A$47m ($34.1m) for the expansion of its Prominent Hill copper-gold mine in South Australia.

A significant part of the investment is planned to be used for the further infill drilling to convert the Prominent Hill inferred resources to reserves before making a final investment decision (FID).

The FID on the project is expected to be taken in mid-2021.

The investment decision follows an updated expansion study, which indicated technical and economical feasibility of an installation of a vertical hoisting shaft at the Prominent Hill mine to replace truck haulage.

Oz Minerals said that the robustness of the shaft investment was tested by assessing the feasibility of mining the existing ore reserves, with a production target based on some six-million tonnes a year (Mtpa) from 2025.

Vertical shaft conversion to lower operational mining risk at depth

The interim case, however, showed that vertical shaft conversion would lower the operational mining risk at depth and cashflow positive over the current truck haulage mining operation.

As per the study, the shaft haulage expansion would require an investment of A$450m ($327m) over a four-year period, from 2021.

The work would result in improved safety and productivity, reduced site operating costs, potential to extend the mine life, and improved intensity of greenhouse gas emissions, the company said.

OZ Minerals managing director and CEO Andrew Cole said: “While examining only a portion of the Mineral Resource, the study showed significant cash flow uplift, improved safety, and lower mining costs and emissions intensity.

“It provides a strong foundation from which to consider the potential of the remaining two thirds of the Inferred Resource as the study and infill drilling progresses to inform an investment decision mid-2021.

“The mine has consistently operated in the lowest quartile of the cost curve for many years. We look forward to the results of the study and further infill drilling in mid-2021.”