Evolution Mining has released an updated mineral resource estimate for its Ernest Henry project.
Ernest Henry is located 38km north-east of Cloncurry, Queenslandand is a large-scale copper-gold operation. Its mine life was extended in June of this year.
As of June 30, the Ernest Henry mineral resource is estimated at 101.5 million tonnes at 1.25 per cent copper and 0.73 grams per tonne (g/t) gold for 1.3 million tonnes of contained copper and 2.4 million ounces of contained gold.
This is an increase of 6.7 million tonnes, 76,000 ounces of contained gold and 63,000 tonnes of contained copper compared to the December 31 2022 mineral resource estimate (MRE).
The new MRE was said to be informed by results from 26 new drill holes completed from January 1 to March 8.
The new MRE will now inform the Ernest Henry extension feasibility study engineering work following the results of the mine extension pre-feasibility study that demonstrated an opportunity to extend the Ernest Henry mine life by 17 years to 2040.
“Ernest Henry continues to demonstrate its world class status with additional mineral resource growth since the previous estimate with the addition of only 26 new holes,” Evolution Mining chief executive officer Lawrie Conway said.
“This is the fourth increase in the first 18 months of 100 per cent ownership, with a net increase of 41–44 per cent in contained metal over this period.
“Resource increases outside the mine extension feasibility study footprint highlights the excellent potential for further resource growth and the potential to operate the plant at full capacity over the full 17-year mine life extension to 2040.”
WA Limestone wanted a rock breaker with some “meat on the bones” to handle its hard rock quarry in Onslow.
Western Australia’s northwest is a rugged environment, characterised by gruelling conditions and tough rock. It is here where WA Limestone, one of the state’s biggest aggregate suppliers, can be found.
Steven Della Bona, director at WA Limestone, said the material is a very hard rock to mine, because it is so dense, abrasive, and hard.
“The wear factors and the damage that it does on your machines is pretty horrendous,” he said.
“You need the right machinery and the right wear parts on your machinery.”
The family-owned company found Kobelco’s SK500XD to be the answer for a heavy-duty machine that can handle abrasive aggregate.
Kobelco’s SK500XD weighs in at 52,200 kg, making it one of the heaviest machines in its class.
It features a heavy-duty boom and arm set as well as factory-fitted, triple-plated, hardened steel applied to all key structural sections.
This includes the boom-to-arm connection, the boom centre, and the end of the arm, providing a high level of durability and longevity to the attachment structures.
A specially designed full-length rock guard is installed on the inside of the dipper arm, on top of additional steel plating.
A quadruple track guide frame and reinforced heavy-duty 600mm triple grouser shoe provide reliability in rocky underfoot conditions, making easy work of rough terrain.
The durability of the track links has also increased, while the idler frame has received substantial double reinforcement plating inside and out, resulting in improved undercarriage reliability which prevents premature wear.
The heavy-duty steel bolted underbody guard protects vital machine components and provides additional weight for greater stability.
The additional metal, which helps the SK500XD handle the Onslow quarry site, is a key feature for WA Limestone.
“I was pretty impressed by the extra steel on the track frames and the extra steel and reinforcement around the arm, the excavator frame and the dipper arm,” Della Bona said.
“Being in the conditions that we operate in and especially with the hard rock you need a machine that can handle the bumps, hard rocks and all the stresses and pressures.
“The machine has worked really well and hasn’t let us down at all, it’s been reliable and done everything that we asked it to do.”
WA Limestone partnered with Kobelco to optimise its operations.
It is powered by a Hino Toyota engine, alongside Kawasaki pumps and hydraulics, which delivers 257 kW of power and an average fuel consumption of under 30L per hour. This helps the SK500XD generate a breakout force of 293 kN, and slew torque of 183 kN.
The hydraulic system notifies the operator if
filter performance is compromised which helps manage maintenance and reduce downtime.
“They’re a proven hydraulic pump and hydraulic system so there is no reason why we wouldn’t get a good run out of them.
The company has road-tested several machines over its five decades in the industry. Della Bona, who has been with the company for 38 years, understands what makes a quality machine.
“I was trying to find a dedicated rock-breaking machine and I rang a couple of clients who run them, and they had nothing but good words to say,” Della Bona said.
“I was able to buy that machine pretty quickly and get it up and running and that was a big part of the decision-making.
“I am keen to see how it continues to perform but we’re really happy with it.”
Kobelco has confidence in the machine’s ability to handle the demanding conditions of the Australian worksite providing an extended major component warranty of four years or 6000 hours.
Mark Johnson, Kobelco Australia’s general manager of product and distribution, said the machine has all the tools to be a hit.
“It’s engineered for the most extreme environments around the world,” he said.
“It also builds on Kobelco’s excellent reputation for machine reliability, taking it to a new level by providing a factory-installed, comprehensive set of structural reinforcements—not to mention class-leading digging performance and fuel efficiency.
“The result is a machine that is the perfect choice for quarry work.”
Holcim Grantville has two AG45s on site which are made for the conditions and driving the clay tracks.
Holcim Australia’s Grantville Quarry utilises two articulated dump trucks and two front-loaders to stay on top of the competition, thanks to a partnership with Delta Rent.
The Grantville Quarry, which is a joint venture between Holcim and Boral, has relied on rented machines from Delta Rent for more than a decade, to ensure it can meet demanding workloads. The quarry supplies Holcim and Boral internally with sand for manufacturing concrete.
Holcim Australia’s Grantville Quarry site supervisor Ron Walker said with the operation being a joint venture, using machinery from Delta on-site provided access to the latest machines without significant up front investment.
Holcim Grantville has two L260Hs on-site and has been impressed with its handling of on-site conditions.
Delta’s rental division, established in 2005, offers flexible short-term, medium, and long-term rental plans to help any site or project-specific requirement. The heavy plant hire division operates across Australia with offices in Melbourne, Sydney, Brisbane and Adelaide.
“As we operate a joint venture between Boral and Holcim we tend not to own our equipment/machinery,” Walker said.
“So, we partner with Delta Rent – giving our employees access to the latest state-of-the-art reliable machines. This is imperative as our operation is reasonably high hours for a rental.”
Holcim’s Grantville site, located around 90 minutes from Melbourne, needed machines that could handle the clay track around the site in the wet and sodden tracks in the Victorian winter.
The Volvo L260H’s larger bucket capacity of 7.1 cubic metres compared to previous models to improve efficiency.
Delta Rent, which has one of the largest rental fleets in Australia, supplied the Victorian operation with two articulated dump trucks and two front-wheel loaders.
The articulated dump trucks are designed for off-road sites which require heavy-duty usage, predictive gear selection, downhill speed control and a high payload capability.
Walker said it was crucial Delta Rent was able to match the needs of the site with machines in its fleet.
“They run through pretty hard conditions in winter and all our tracks are clay, which can become quite wet. Despite the weather conditions, we still need to operate as much as we can,” Walker said.
“Delta Rent provides us with very reliable trucks, along with superior comfort for the operators.”
One of the key features the front end wheel loaders offer is a large capacity of 7.1 cubic metres, allowing 11.5 per cent more material to be loaded than previous models. This enables the road trucks to be loaded and sent out faster, increasing the site’s efficiency.
Delta Rent Account Manager Andrew Hagan said the company focused on the customer’s needs, with a rental and service based model that customers can rely on to help operations run smoothly.
In the case of the articulated hauler, its ability to handle “wet and uneven terrain very well” became a major factor given Holcim’s Grantville site, according to Hagan.
“The turnaround time to get trucks in and loaded was definitely seen as a benefit because they didn’t want trucks lining up at the gate, you just want them out.”
“Fuel burn was also a critical factor to the operation to lower production costs.”
“The support and 24–7 service Delta Rent provides is reliable, consistent, and gives our customers comfort knowing they can access immediate help when they need it,” he said.
Delta Rent provides maintenance on the high-risk and capital-intensive machines to ease pressures for workers on-site.
The support system minimises unexpected maintenance and associated downtime.
“We rely on Delta’s after-hours service, so when something breaks down and we need it repaired pretty quickly, they’re onto it immediately,” Walker said.
“I manage the gear and liaise with Delta to do all the repairs and upkeep of the trucks. They’re usually pretty prompt getting out and getting the gear repaired as quickly as they can, which works for us because if the machine isn’t running, it is downtime for us and loss of production.”
Walker, who has spent around 40 years in the industry, really appreciates the level of service and quality of the machines.
“They’ve always been a good company to deal with, and they’re very good at keeping their gear on the move,” Walker said.
“Knowing Delta Rent is there helps us maintain focus on our core business.”
UGL has moved to a new manufacturing facility in Auburn, New South Wales, from where it will continue to support the railway industry.
The facility is more modern than the previous one and better equipped at accommodating people living with a disability. It will be more efficient, comprised of one single facility rather than lots of small buildings.
The move comes after the company spent nearly 50 years at its former location, in Milperra.
UGL Managing Director Doug Moss said the company was constantly evolving and remained a leader in the rail industry.
“Our new Auburn facility will allow us to grow and continue to innovate, but it’s our people that make UGL great,” he said.
“We are lucky enough to have a breadth of knowledge and experience, with some of our employees working for us for 30 years or more.
“We are a local manufacturer employing local people, using the latest in innovative design and combining it with all that fantastic experience.”
A sustainable approach to the move was undertaken, achieving:
71.6 tonnes of steel recycled
11.2t of aluminium recycled
10.5t of copper recycled
13.5t of paper and cardboard
The new manufacturing facility produces, repairs and tests signalling equipment and traction equipment, including:
Signal wayside equipment
Solid state interlocking
Train protection systems
Trackside cabinets
Rectifiers for traction power
Heavy DC traction circuit breakers
The site will play a crucial role within the industry, with UGL’s radio and signalling construction teams currently supporting major NSW infrastructure projects.
As well, UGL strives to transform train travel by supporting Future Railway Mobile Communication Systems (FRMCS) in Australia once the standards are finalised in Europe, and through the adoption of new technologies.
“It may be a new address, but we have the same high standard of quality and commitment our clients and communities have experienced for decades,” Moss said.
Strandline’s project portfolio contains high quality assets which offer a range of development options and timelines, geographic diversity, and scalability. They include the world-scale Coburn mineral sands project in Western Australia, currently ramping up into production, and the emerging Tanzanian mineral sands growth projects Fungoni, Tajiri, and Bagamoyo.
Strandline’s exploration and development focuses primarily on discovering and evaluating mineral sands ore bodies that show an abundance of higher value minerals, nominally zircon, rutile and monazite, with the lesser value minerals of ilmenite and garnet as a co-product to the product suite.
Mineral sands are heavy minerals found in sediments on, or near to, the surface of ancient beach, river or dunal system. Strandline’s proposed mineral sands mining method involves both dry mining (Coburn and Fungoni projects) and wet hydraulic mining (Tajiri project). Mining units and wet concentration plant (WCP) separate the heavy valuable minerals (zircon, monazite, rutile, leucoxene, ilmenite) from the waste material. The WCP design utilises multiple stages of high-capacity gravity separation and classification to produce a high grade +90% heavy mineral concentrate (HMC).
South32’s Sierra Gorda copper mine in Chile. Image: South32
ARI was on hand for a recent fireside chat with South32 CEO Graham Kerr, who reflected on how the major mining company has gotten to where it is today.
South32, which was demerged from BHP in 2015, describes itself as a “globally diversified mining and metals company” and is now transitioning to become a key manganese producer in the US.
The company’s future is certainly bright, but chief executive officer Graham Kerr admitted South32 initially had a portfolio that could only be described as a “mixed bag”.
“Within BHP, there are lots of assets that have a lot of opportunity for development in the future that weren’t quite getting the love or systems they needed,” he said during a fireside chat at a recent Melbourne Mining Club luncheon.
“For me, the demerger was a great opportunity for both companies to be better than what they were together. (And) both companies have continued to change and evolve.”
South32’s commodity mix included energy coal, metallurgical coal and manganese, with nickel, lead, silver, zinc and aluminium also featuring in the portfolio.
It was from this position that Kerr and his colleagues set about finding potential in base metals.
Eight years on, the company’s portfolio has changed a lot since Kerr sat in the first South32 meeting with then-chairman David Crawford.
“We certainly had a belief for what assets belonged in South32 and what assets didn’t belong in South32,” Kerr said.
“If you take a step back, what we did actually recognise is if you look at the world today, with a lot of the M&A activity that occurred in the prior two decades, most of the mid-tier mining companies had disappeared.
“So part of the advantage of South32 was it’s a mid-tier-sized mining company … and for a mid-tier company, you only need one or two great discoveries or one or two great acquisitions and you can fundamentally change the nature of the group and create a lot of value for your stakeholders.
“It was clear some commodities had a more attractive future than others. We talked about wanting copper and we did talk about expanding our zinc and nickel presence, and those commodities in particular have been far more attractive in a world of decarbonisation.”
South32 chief executive officer Graham Kerr.
Those discussions laid the foundations for South32 as the company transitioned its portfolio and projects to be largely based in the Americas.
The US Government’s recent endorsement of the Hermosa project, located in southern Arizona, has meant South32 could become the country’s primary manganese producer.
Hermosa, which has the potential to produce manganese and zinc, has been added to the FAST-41 project list, which is designed to create better processes for complex critical infrastructure projects. Hermosa is one of the first mining projects to join the program, which could assist it with obtaining federal permits for the development of South32’s Taylor and Clark deposits, both of which are located within the Hermosa project.
According to Kerr, once the Taylor and Clark projects are up and running, South32’s portfolio composition will rise to 85 per cent base metals, with majority of the company’s value in the Americas.
“The inclusion of Hermosa as the first mining project added to the FAST-41 process is an important milestone that recognises the project’s potential to strengthen the domestic supply of critical minerals in the US,” Kerr said. “The project presents a significant opportunity to sustainably produce commodities critical to a low-carbon future.”
South32 is advancing a Clark feasibility study, with a pilot plant recently commencing production. A feasibility study for the Taylor deposit is expected to be completed later this year.
A key part of the project will see South32 engage with local communities to ensure the project has flow-on benefits to the surrounding area.
“Becoming a covered FAST-41 project will make the rigorous federal environmental review and permitting process for this project more transparent, predictable and inclusive for all stakeholders,” South32 Hermosa president Pat Risner said.
“We are committed to working closely with the US Forest Service, cooperating agencies, Native American tribes, and local stakeholders in Santa Cruz County in Arizona to develop this project in a way that benefits the community, minimises impact on the environment, and creates opportunities across the region.”
Alongside its US assets, South32 also has growth options in South America, including a bright future for its Sierra Gorda copper mine in Chile.
South32 purchased a 45 per cent stake in Sierra Gorda in February 2022, but while the company has long been keen to boost its copper presence, it took time to warm up to Sierra Gorda.
“How many people in the room have watched Shrek with their kids before?” Kerr asked the Melbourne Mining Club audience. “There’s a bit where the donkey is talking to Shrek and says, ‘Shrek, you’re like an onion. You’ve got to take the layers off the onion to understand what you’ve actually got’.
“When the business development team first brought Sierra Gorda to me, I was probably like most other people in the market and thought, ‘This is a challenged asset. It’s got a history of having a challenging ramp-up and there’s very little information in the marketplace about it’.
“Every challenge we gave to the business development team to take a layer off that onion, they came back with more positive results.
“In the end, we became convinced that it was the right thing to do.
“We’ve had it for about a year now and we’re really happy with the acquisition. We’ve been really surprised by the upside in the asset and the quality of the people.”
South32’s Hermosa project in southern Arizona.
Alongside its Chile presence, South32 is also involved in earn-in agreements with two emerging copper exploration projects in Argentina – Chita Valley and Don Julio.
South32 recently exercised its earn-in right to acquire a 50.1 per cent interest in the Chita Valley project following a three-year exploration partnership with Minsud Resources Corp.
The major miner signed an earn-in agreement with Sable Resources to explore Don Julio in 2021, with drilling advancing at the project.
Kerr said Argentina could be a copper jurisdiction to keep an eye on in years to come.
“Argentina’s become an interesting location,” he said.
“When we first started doing some work there, we were probably the only ones. You’ve got BHP there, you’ve got Barrick there, you’ve Glencore there – everyone’s sort of pouring money into that jurisdiction at the moment.
“If you look at where it is, it’s on the other side of the Chile mountains where basically all the copper is.
“So I think that’s an area that’s going to develop pretty quickly.”
Whether it’s the Hermosa project in the US, a suite of emerging projects in South America, or any other ‘future-facing’ asset in South32’s portfolio, the company has plenty of avenues to be part of the world’s decarbonisation narrative in the years to come.
And given South32’s strong track record of project execution and expansion, the company’s shareholders can rest assured their stock is in the right place.
South32’s Sierra Gorda copper mine in Chile. Image: South32
ARI was on hand for a recent fireside chat with South32 CEO Graham Kerr, who reflected on how the major mining company has gotten to where it is today.
South32, which was demerged from BHP in 2015, describes itself as a “globally diversified mining and metals company” and is now transitioning to become a key manganese producer in the US.
The company’s future is certainly bright, but chief executive officer Graham Kerr admitted South32 initially had a portfolio that could only be described as a “mixed bag”.
“Within BHP, there are lots of assets that have a lot of opportunity for development in the future that weren’t quite getting the love or systems they needed,” he said during a fireside chat at a recent Melbourne Mining Club luncheon.
“For me, the demerger was a great opportunity for both companies to be better than what they were together. (And) both companies have continued to change and evolve.”
South32’s commodity mix included energy coal, metallurgical coal and manganese, with nickel, lead, silver, zinc and aluminium also featuring in the portfolio.
It was from this position that Kerr and his colleagues set about finding potential in base metals.
Eight years on, the company’s portfolio has changed a lot since Kerr sat in the first South32 meeting with then-chairman David Crawford.
“We certainly had a belief for what assets belonged in South32 and what assets didn’t belong in South32,” Kerr said.
“If you take a step back, what we did actually recognise is if you look at the world today, with a lot of the M&A activity that occurred in the prior two decades, most of the mid-tier mining companies had disappeared.
“So part of the advantage of South32 was it’s a mid-tier-sized mining company … and for a mid-tier company, you only need one or two great discoveries or one or two great acquisitions and you can fundamentally change the nature of the group and create a lot of value for your stakeholders.
“It was clear some commodities had a more attractive future than others. We talked about wanting copper and we did talk about expanding our zinc and nickel presence, and those commodities in particular have been far more attractive in a world of decarbonisation.”
South32 chief executive officer Graham Kerr.
Those discussions laid the foundations for South32 as the company transitioned its portfolio and projects to be largely based in the Americas.
The US Government’s recent endorsement of the Hermosa project, located in southern Arizona, has meant South32 could become the country’s primary manganese producer.
Hermosa, which has the potential to produce manganese and zinc, has been added to the FAST-41 project list, which is designed to create better processes for complex critical infrastructure projects. Hermosa is one of the first mining projects to join the program, which could assist it with obtaining federal permits for the development of South32’s Taylor and Clark deposits, both of which are located within the Hermosa project.
According to Kerr, once the Taylor and Clark projects are up and running, South32’s portfolio composition will rise to 85 per cent base metals, with majority of the company’s value in the Americas.
“The inclusion of Hermosa as the first mining project added to the FAST-41 process is an important milestone that recognises the project’s potential to strengthen the domestic supply of critical minerals in the US,” Kerr said. “The project presents a significant opportunity to sustainably produce commodities critical to a low-carbon future.”
South32 is advancing a Clark feasibility study, with a pilot plant recently commencing production. A feasibility study for the Taylor deposit is expected to be completed later this year.
A key part of the project will see South32 engage with local communities to ensure the project has flow-on benefits to the surrounding area.
“Becoming a covered FAST-41 project will make the rigorous federal environmental review and permitting process for this project more transparent, predictable and inclusive for all stakeholders,” South32 Hermosa president Pat Risner said.
“We are committed to working closely with the US Forest Service, cooperating agencies, Native American tribes, and local stakeholders in Santa Cruz County in Arizona to develop this project in a way that benefits the community, minimises impact on the environment, and creates opportunities across the region.”
Alongside its US assets, South32 also has growth options in South America, including a bright future for its Sierra Gorda copper mine in Chile.
South32 purchased a 45 per cent stake in Sierra Gorda in February 2022, but while the company has long been keen to boost its copper presence, it took time to warm up to Sierra Gorda.
“How many people in the room have watched Shrek with their kids before?” Kerr asked the Melbourne Mining Club audience. “There’s a bit where the donkey is talking to Shrek and says, ‘Shrek, you’re like an onion. You’ve got to take the layers off the onion to understand what you’ve actually got’.
“When the business development team first brought Sierra Gorda to me, I was probably like most other people in the market and thought, ‘This is a challenged asset. It’s got a history of having a challenging ramp-up and there’s very little information in the marketplace about it’.
“Every challenge we gave to the business development team to take a layer off that onion, they came back with more positive results.
“In the end, we became convinced that it was the right thing to do.
“We’ve had it for about a year now and we’re really happy with the acquisition. We’ve been really surprised by the upside in the asset and the quality of the people.”
South32’s Hermosa project in southern Arizona.
Alongside its Chile presence, South32 is also involved in earn-in agreements with two emerging copper exploration projects in Argentina – Chita Valley and Don Julio.
South32 recently exercised its earn-in right to acquire a 50.1 per cent interest in the Chita Valley project following a three-year exploration partnership with Minsud Resources Corp.
The major miner signed an earn-in agreement with Sable Resources to explore Don Julio in 2021, with drilling advancing at the project.
Kerr said Argentina could be a copper jurisdiction to keep an eye on in years to come.
“Argentina’s become an interesting location,” he said.
“When we first started doing some work there, we were probably the only ones. You’ve got BHP there, you’ve got Barrick there, you’ve Glencore there – everyone’s sort of pouring money into that jurisdiction at the moment.
“If you look at where it is, it’s on the other side of the Chile mountains where basically all the copper is.
“So I think that’s an area that’s going to develop pretty quickly.”
Whether it’s the Hermosa project in the US, a suite of emerging projects in South America, or any other ‘future-facing’ asset in South32’s portfolio, the company has plenty of avenues to be part of the world’s decarbonisation narrative in the years to come.
And given South32’s strong track record of project execution and expansion, the company’s shareholders can rest assured their stock is in the right place.
Mid-tier Australian gold producer Regis Resources has released its annual mineral resource and ore reserve update for the 2022 calendar year.
The company said its mineral resources and ore reserves show progress against its long-term strategy, as well as provides a solid platform to launch the next phase of growth.
Highlights from the report include underground reserves outpaced depletion for the second year in a row as new results highlight underground life extensions at the Duketon gold project and the Tropicana joint venture, which Regis Resources chief executive officer Jim Beyer said was pleasing to see.
“We are extremely pleased that our underground mines at both Duketon and Tropicana have outpaced depletion for the second year in a row. We have spent the last two years investing in these mines and it is very satisfying to deliver reserve growth on these investments over this short time horizon,” Beyer said.
“It is still early days in the maturity of these undergrounds and we look forward to the continuing growth potential as we mine deeper. Our long reserve life of eight years and located wholly within Australia provides a strong platform to deliver on our long-term growth objectives and achieve superior returns for our shareholders.”
Other highlights from the report includes group ore reserves of 3.6 million ounces (Moz) and group mineral resources of 7.0Moz, both as of 31 December 2022.
There was an increase in new ore reserves of 210,000 ounces (koz) and an increase in new mineral resources of 400koz, both offset by the 2022 calendar year depletion.
Long term gold price assumptions for the calculation of reserves and resources were updated but remain at moderate levels at a weighted average of $1800 per ounce for reserves and $2430 per ounce for resources.
Additionally, early results from the Garden Well exploration decline at the Duketon project has reinforced the potential for a new production front and growth in ounces per vertical metre. The underground site also established an exploration target.
Coal miner Glencore will sell its CSA copper mine in Cobar, New South Wales, to Metals Acquisition Corp (MAC) for $US1.1 billion ($1.64 billion).
CSA is an established, high-grade producing, long-life underground copper mine with an estimated current mine life of over 15 years, and MAC has identified opportunities to further extend it, subject to exploration success.
The sale is the latest indicator of copper’s growing importance, after Evolution Mining extended its Ernest Henry mine life to 2040 earlier this week.
Similarly, South32 is looking to grow its portfolio, identifying a copper mine that could be an M&A fit. The copper outlook continues to be supported by the rising decarbonisation narrative, with the commodity a highly efficient conduit for renewable energy systems such as solar, wind, hydro and thermal energy.
The Glencore/MAC deal has been on the table for some time now, with the companies entering into an agreement back in March 2022.
“The acquisition of CSA represents a strong strategic fit for MAC. Our management team’s operational expertise, understanding of regional operations and relationships with local stakeholders uniquely position us to identify and realise the full potential value of the asset,” MAC chief executive officer Mick McMullen said at the time.
“We believe that copper has favourable fundamentals that will continue to support an elevated copper price.
“Copper is expected to play a key role in the global energy transition ‘megatrend’, with approximately one million tonnes per annum of new supply required from 2024 onwards in order to meet the surging demand forecast.
“With few new projects globally in the pipeline, increasing permitting issues and jurisdictional risk, and declining copper grades across the industry, we believe that there are significant challenges ahead to close the projected supply deficit.”
MAC will acquire 100 per cent of the issued share capital of Cobar Management from Glencore. Cobar Management owns and operates the mine.
The company has made arrangement for the copper streams with Osisko Gold Royalties in the US.
“CSA is a high-grade, long-life asset, with significant upside that can be unlocked by the MAC management team,” Osisko president and chief executive officer Sandeep Singh said.
“We are pleased to see this important transaction nearing completion, and look forward to having both the silver and copper streams contribute to our near-term cash flows.”
Evolution Mining has doubled the copper and gold reserves and extended the mine life to 2040 since it purchased the Ernest Henry mine outright in January 2022.
The completion of Ernest Henry’s mine-extension pre-feasibility study (PFS) – announced on Monday – has seen the mine’s ore reserve increase 126 per cent from a December 2022 estimate to 77.4 million tonnes, with contained copper increasing 103 per cent to 589,000 tonnes and contained gold jumping 124 per cent to 1.11 million ounces.
The PFS indicates the mine extension could deliver approximately 655,000 ounces of payable gold and 375,000 tonnes of payable copper, delivering an internal rate of return of 28 per cent (based on a base case of $2400 per ounce of gold and $12,000 per tonne of copper). This equates to a net-present value (NPV) of $690 million.
Capital costs would be $450–500 million, with 60 per cent of this supporting development below the 750mRL (metres relative level). Majority of the capital would not be required until the 2026–27 and 2027–28 financial years.
Ever since Evolution acquired 100 per cent of Ernest Henry, the company has been aggressively exploring the project, regularly announcing resource upgrades and increases in the mine’s copper potential.
Evolution has also announced its board has greenlit capital investment for the expansion of its Mungari plant in WA, with a $250 million investment to boost throughput from 2 million tonnes per annum (Mtpa) to 4.2Mtpa.
“Mungari has demonstrated its capacity to consistently and reliably deliver approximately 135,000 ounces per annum in recent years,” Evolution managing director and chief executive officer Lawrie Conway said.
“This plant expansion unlocks the very large regional resource base, reduces all-in-sustaining costs (AISC) by 18 per cent to $1750 per ounce, extends the mine life out to 15 years, and grows production to over 200,000 ounces post commissioning.
“The expansion was always envisaged and formed part of our due diligence when we acquired the Kundana and East Kundana properties in 2021. Having successfully integrated the operations, this is now the next logical phase of making Mungari a cornerstone asset of Evolution.”
Evolution has also announced a restructure of its debt profile which it said will unlock an additional $445 million of liquidity over the next three years. The restructure included a $US200 million ($303 million) US private placement (USPP) and the replacement of existing $590 million term loan facilities with a reduced four-year, $300 million loan.
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