BY MADELAINE FAYE D. CABRERA
OceanaGold Philippines Inc., a unit of Australia’s OceanaGold Corp., is ramping up work at its Didipio copper-gold site in Nueva Vizcaya to meet its of fourth-quarter 2012 commissioning schedule.The total capital cost for the project is $185 million, with approximately $12 million spent as of May 31 this year, leaving $173 million still to be spent to complete the project.
Construction will take place over the next 15-18 months.
OceanaGold managing director and chief executive Mick Wilkes said: “Over the past six months we have been working hard to unlock significant value through adjustments to the design of the mine, process plant and infrastructure which has seen average annual gold production increase by 45 percent and average annual copper production increase by 69 percent over the life of the mine.”
He said the project will give OceanaGold a significant platform to expand further in the Philippines and throughout Asia Pacific.The new reserve model for the project shows a 70 percent increase in the reserve tonnage to 50.7 million tons, against 29.7 million tons in the earlier design.
This results in a 19 percent increase in gold reserves and a 35 percent increase in copper reserves utilizing a price of $950 per ounce of gold and $2.85 per pound of copper.For the first six years of operations, the Didipio project is expected to produce on average 100,000 ounces of gold and 14,000 tons of copper yearly.
The project shows an internal rate of return of 48 percent at spot metals prices.The mine life has been shortened to 16 years with the open pit operating throughout and the underground operation expected to commence production in 2020.OceanaGold said that with the larger open pit design, total material moved over the life of the mine will be 199 metric tons, of which 44.7 metric tons will be ore, resulting in a life of mine strip ratio of 3.45:1.
Additional inferred resources amounting to 15 million tons fall within the currently designed open pit.These could potentially add 200,000 ounces of gold and 20,000 tons of copper to the mine plan, according to OceanaGold.
The open pit mining at Didipio will be undertaken by a mining contractor and comprise six stages over the next 14 years, taking the open pit to 270 meters below the valley floor, OceanaGold said.”The increased mining rates and larger open pit will allow for quicker access to the higher grade gold than would have been mined via underground methods later in the mine life,” said Wilkes.
“Importantly, the new open pit design allows for high feed rates to the process plant to be sustained as well as greater leverage to strong metal prices by converting more of the resource into reserves,” he added.Wilkes said that underground mining is also expected to take place for at least six years and will run concurrently with the open pit operation.
Earlier, OceanaGold said recent comments by Environment Secretary Ramon Paje that the government would protect mining investments and remove unnecessary interferences were welcome.The mining industry has expressed concern about an increasing number of provincial bans that are stopping approved projects.
The southern province of South Cotabato has imposed a ban on open-pit mining, putting at risk the country’s largest mining project, the $5.9 billion Tampakan copper-gold project run by global miner Xstrata Plc.OceanaGold is a significant Asia Pacific gold producer with projects located on the South Island of New Zealand and in the Philippines.OceanaGold is listed on the Toronto, Australian and New Zealand stock exchanges.
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