Austral finds potential extra 10,000 tonnes of copper to replace mined ore at Anthill
Austral has released a concept mining study indicating that a further 10,000t of contained copper could be mined from its Anthill copper project in Queensland.
This represents the addition of more than 20% of the produced copper oxide and sulphide to be mined from Anthill compared to the volumes estimated in the 2021 Feasibility Study and is due to a combination of higher copper prices and the addition of flotation to process high-calcium transitional and copper sulphide material.
Importantly for Austral Resources (ASX:AR1), the increased copper inventory not only has the potential to add revenue of between $100m and $120m, about 80% comes from Measured and Indicated Resources and replaces depleted Ore Reserves.
There is also potential for annual production to be increased by 25,000t to 30,000t if the CMS from Anthill is consolidated with an additional 20,000t to 23,000t of contained copper oxide ore from the previously mined Lady Annie, Lady Brenda, Mount Clarke, and Flying Horse pits.
Managing director Dan Jauncey noted that the company’s immediate focus is finding more oxide to feed its copper production facilities and that its 2021 Ore Reserve estimate being based on the lower copper price of about US$10,300/t was always at the back of their minds.
“The study reveals a potential significant increase in the Mineral Resources by applying the current copper prices in 2023,” he added.
“Considering what we have announced on oxides alone this year, we now have another 40,000t of copper potential.
“Having identified the increase in the Mineral Resources potential, an update of the Mineral Resources and Ore Reserve will validate the potential to increase the life of the mine by approximately five to seven years.”
Jauncey also pointed out that the results of the concept study are extremely promising as they highlighted the immediate potential for increased profitability, growth and value.
Austral produced 2,818t of copper in the March 2023 quarter from its Anthill operation, which generated net revenue of $35.55m and operating cash flow of $13.6m.
The company will now carry out detailed dilution and ore loss analysis with potential Selective Mining Unit Analysis, update the pit design (with stages) and Mine Plan.
It will also develop the financial model of the Detailed Mine Schedule to assess the economic viability of the expansion as well as update the Mineral Resources and Ore Reserves estimates to formalise the CMS identified production potential.
This article was developed in collaboration with Austral Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.