The dramatically re-shaped Australian miner OZ Minerals came through a prime production period - the December quarter - with a healthy performance from its ramped-up Prominent Hill copper-gold mine in South Australia.
Author: Ross Louthean
Posted: Thursday , 21 Jan 2010
via CAAI News Media
PERTH - -
The company is a shadow of its former self after China's big Minmetals Group acquired all of its significant mining assets, minus Prominent Hill, the sale of which was blocked by the Australian Government on the basis that Prominent Hill was technically on defence department land.
While stripped to near-bone OZ Minerals cleared a colossal debt it had with banks and had both a commissioning mine and a substantial amount of cash.
In a presentation Thursday OZ Minerals Ltd (ASX: OZL; OTC: OZMLF; Berlin & Frankfurt: OZR) said that Prominent Hill performed above guidance in the December quarter and had competitive costs of $US0.70/lb. Contained metal production was 36,497 tonnes copper, 30,526 ounces gold and 339,937 oz silver - with total production in the ramp up year of 96,310t copper, 75,535 oz silver and 700,177 oz silver.
The company said it expects to produce between 100,000-110,000t per annum of copper in 2010/11.
Today's presentation highlighted two areas of exploration growth outside of brownfields exploration at Prominent Hill - striking of an heads of agreement with regional iron ore mine developer IMZ Resources Ltd (ASX: IXR) to explore for iron oxide copper-gold deposits, and continuing drilling on the Okvau gold prospect in Cambodia.
OZ Minerals said it was undertaking final drilling at Okvau in north east Cambodia before producing an initial resource estimate.
Recent drill results at Okvau included one hole from surface to almost 400 metres that gave series of seven significant intercepts, the best two being 9m from surface of 4.82 grams/tonne and a deeper hit of 10m @ 5.99 g/t gold.
The deal with IMX gives OZ Minerals exploration access to 3,200 square metres near Prominent Hill - virtually doubling the exploration area for the company. OZ Minerals can earn 75% by sole funding $A20 million ($US18.23 M) on exploration.
At December end OZ Minerals had $A1.076 billion ($US981 M) in cash which is a factor behind analysts and market speculators suggesting the company had several acquisitions and takeovers in its gunsights. One of the named companies is Sandfire Resources Ltd (ASX: SFR) which has made a spectacular VMS polymetallic discovery at Doolgunna in Western Australia's north Murchison region.
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