Prominent Hill Gold/Copper Mine, Australia

The Prominent Hill gold and copper mine is 650km North West of the South Australian capital Adelaide, 130km north west of BHP Billiton's Olympic Dam and 130km south east of the town of Coober Pedy in the Gawler Craton of South Australia.

It was discovered in 2001 by Adelaide-based Minotaur Exploration Limited and is considered the most significant greenfields discovery in Australia for a decade.

The mine is now 100% owned by Australian mining company Oxiana Limited which acquired Minotaur in 2005 and later spun-off the non-Prominent Hill assets into new company Minotaur Exploration Limited (MEP). Oxiana is listed on the Australian Stock Exchange.

Board approval for the mine was granted in 2006. Construction is in progress with production expected to commence in the second half of 2008.

Key market will be sales of high-quality copper-gold concentrate to smelters in Asia and Australia.

In a statement to the Australian Stock exchange in October 2007, Oxiana revised its projected costings for the mine up to $A1.08bn ($US960.1m).

GEOLOGY AND RESERVES

Stripping of the Prominent Hill open-pit reached the top of the orebody in October 2007 and mining now underway has produced a stockpile in preparation for processing.

The resources identified are copper gold breccia: contained metal 1.9Mt Cu and 3.7Moz Au.

Oxiana said that the mine will ramp up by late this year and in its first full year of production in 2009 is expected to produce 117,000t copper, 86,000oz gold and 390,000oz silver.

Recent exploration testing beneath the Prominent Hill resource has returned positive results, demonstrating that the copper-gold system extends at least twice as far as previously outlined.

Following this Oxiana has started a two-stage expansion and life extension study. Stage 1 is a potential 1–2mtpa underground mine with higher grade copper and gold ore to supplement the 8mtpa open pit and is targeting first production from end 2011. The second stage is a deeper bulk underground mine development which would see mine life extended out to at least 2030.

MINING

The project will include development of an open-pit mine, a conventional grinding and flotation processing plant with an 8mtpa capacity, construction of a permanent village to accommodate a steady-state workforce of approximately 500 and construction of a haulage road, power line and bore field. The dimensions of the initial open-pit mine will be 480m deep × 1.4km × 1.2km.

ORE PROCESSING

Ore processing will use conventional crushing, grinding and flotation.

8mt/a throughput with an average stripping ratio of 7.2.

The average head-grade is 1.24% copper with grades higher for the first four years.

Average recovery is 86% for copper and 77% for gold.

PRODUCTION AND COSTS

In October last year the company released a detailed report on Prominent Hill and other projects to the Australian Stock Exchange. The report showed that while Prominent Hill is on schedule the project bill has increased to $A1.08bn ($US960.1m).

Stripping of the Prominent Hill open-pit reached the top of the orebody in October 2007 and mining now underway has produced a stockpile in preparation for processing.

Oxiana said that the mine will ramp up by late this year to produce 25,000t copper, 15,000oz gold and 75,000oz silver in 2008. In 2009, Prominent Hill's first full year of production output of 117,000t copper, 86,000oz gold and 390,000oz silver is expected.

THE FUTURE

Prominent Hill is expected to run for an initial ten years, with studies now underway into the potential of mining resources immediately below the planned pit.

A larger zone below this is also expected to be mined using bulk caving methods. Good potential also exists to discover satellite deposits to Prominent Hill and other deposits in the wider tenement package.

Forecast production is 104,000t/a copper in the first four full years; 71,000t/a for the next six years; and 115,000oz/a gold over the life of the mine.

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