A SMALL-SCALE, HIGH-GRADE MINING OPERATION
Spotlight - Thu, 10/17/2019 - 09:57

A SMALL-SCALE, HIGH-GRADE MINING OPERATION

Defining the potential of a mining asset can be a challenging task
Thu, 10/17/2019 - 09:57
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Defining the potential of a mining asset can be a challenging task. Exploratory processes must be taken into the equation and when done right, these can lead to a successful operation. A good example of this is the Oposura project, a zinc-lead-silver asset purchased by Azure Minerals in mid-2017. From exploration to the completion of a small-scale mining and processing operation, the Australian company seeks to achieve a positive cash flow to fund a Definitive Feasibility Study (DFS) as previous tests indicate this asset could have cash costs found in the lowest quartile of world zinc producers.
In June 2019, the company approved the development of a small-scale mining and toll treatment operation to exploit the near-surface, easily-accessible, high-grade massive sulphide mineralization. Overburden comprising weathered rock was removed with minimal drilling and blasting, ensuring low mining costs. As a result, 6,100 tons of high-grade ore were mined at average grades of 13.4 percent of zinc and 10.7 of lead, respectively. These results exceeded the estimated average established in a scoping study that took place in 2018.
Initially, the open pit was designed to extract only 1,000 tons of ore before moving into an underground mining phase. However once open pit mining started, more ore at higher grades was identified in comparison with what was originally estimated. Given the lower mining costs and higher production rates associated with open pit mining, Azure Minerals extended the development of this type of mine. Following this phase, the operation will transition into an underground mine comprising a 250m tunnel that will provide access to the western high-grade zone. Studies indicate that massive sulphide ore can be extracted at a production rate of 100t/d.
The company’s strategy is to process this ore under a toll treatment arrangement with a third-party processing plant. Hence, the positive cash flow derived from the zinc and lead-silver concentrates will support funding to turn the DFS into a large-scale mining and on-site processing operation. In October 2018, a Preliminary Economic Assessment confirmed that a large-scale mining and on-site processing operation at Oposura would be an economically and technically robust, high-margin project. The study highlighted low operating and capital costs, high-value concentrates, strong operating cash flows and a short payback period.

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