Ground Breakers: OZ targets net zero by 2030, Silver Lake completes Harte Gold deal

Copper miner OZ Minerals (ASX:OZL) says renewable energy investments in South Australia and Brazil will enable it to meet an ambitious target of hitting Net Zero scope 1 and 2 emissions by 2030.

The owner of the Prominent Hill and Carrapateena copper-gold mines in South Australia says it has fully funded $415m of commitments to electrify its materials handling systems in SA and will spend $6.9m in 2022 to transfer its Pedra Branca mine in Brazil from diesel to grid electricity.

The $275m installation of an electric hoisting shaft at Prominent Hill and $140m investment in an electric materials handling system at Carra will help OZ hit an initial target of a 50% reduction in scope 1 emissions by 2027.

By 2023 as much as $12m in equipment trials will be under way to identify a pathway to remove diesel use entirely from OZ’s operations.

OZ’s decarbonisation roadmap is being released amid an environment of increasing scrutiny on producers of battery metals like copper and nickel (which OZ will produce at its proposed West Musgrave mine in WA) to ensure supply chains for electric vehicles are ESG friendly.

“The roadmap has been built from the bottom up and comprises fully funded commitments to electrify materials handling systems enabling replacement of much of our diesel haulage at Carrapateena and Prominent Hill, as well as trials to decarbonise the remainder of our fleet,” OZ MD Andrew Cole said.

“As a miner of copper and potentially nickel which are both important minerals in global electrification activities, we are acutely aware of our responsibility to reduce emissions.”

“Our Decarbonisation Roadmap outlines our current plans to contribute where we can have the greatest emissions reduction impact. As technology improves and we gain a greater understanding of what is possible via trials over the coming years we hope to be able to update and improve our emissions reduction plans.”

ESG and emissions reduction targets will also be tied to long term and short term pay incentives for senior executives.

The roadmap’s release came as OZ announced a 150% increase in NPAT to $531 million on record revenue of $2.1 billion after a year characterised by super high copper prices.

OZ delivered a fully franked final dividend of 18c per share, taking its total payout for 2021 to 34c.

Its sales revenues were up some $754m on the back of both higher prices and hitting full production levels for the first time from Carra, with copper and gold output climbing 30,000t and 12,000oz, respectively.

EBITDA almost doubled from $606.3m in 2020 to $1.162b in 2021, with earnings per share up 94.4c to 159.6c.

However, OZ warned Covid absenteeism that limited production levels in the back end of 2021 would continue in early 2022.

OZ has set guidance of 127,000-149,000t of copper and 108,000-230,000oz of gold at all in sustaining costs of US$1.35-1.55/lb in 2022.

OZ Minerals share price today:

Silver Lake expands with Harte Gold deal

Silver Lake (ASX:SLR) has become the latest Australian gold miner to expand into North America after sealing its slow moving acquisition of embattled Canadian gold miner Harte Gold.

Silver Lake has acquired the Sugar Zone mine in Ontario through the US$102 million deal, which will also see Silver Lake close out Harte’s out of the money gold hedge for US$24.8m and replace it with a US$22m gold pre-pay for 11,928oz over the the next 12 months.

Sugar Zone has been in production since 2019 and contains a reserve of 797,000oz at 7.2g/t, delivering 51,453oz at 6.5g/t in 2021.

But its resource contains a higher grade of 10.9g/t and Silver Lake views the project as a window into a major exploration opportunity, saying it now holds “one of the largest exploration properties within a prolific metals district in Canada.”

It follows fellow Australian gold miners Northern Star (ASX:NST), Newcrest (ASX:NCM), St Barbara (ASX:SBM) and Evolution Mining (ASX:EVN) who have all made forays into North America in recent years.

Silver Lake made a $44.5m profit after tax in the first half of the 2022 financial year, down from $65.8m a year earlier due to larger depreciation and amortisation charges at Deflector.

EBITDA was relatively stable at $157.6m (compared to $160.1m in 2021), with gold equivalent sales down from 130,718oz in H1 2021 to 126,718oz in H1 2022.

SLR had $277.9m in cash at the bank as of December 31.

It has set guidance of 235,000-255,000oz gold and 600-1000t copper sales at all in sustaining costs of $1550-1650/oz in 2021-22.