Proponents of a new AUD$480 million copper mine on South Australia’s Yorke Peninsula are evaluating financing options in regard to project funding and offtake agreements from a number of interests, including Chinese.

Image courtesy ©Rex Minerals. Hi-res aerial magnetic data over Eastern Yorke Peninsula tenure with key copper targets identified by Rex overlain

Rex Minerals Project Director, Mr Greg Hall, said a feasibility study currently underway by a Chinese engineering firm was due for completion in a number of months. Rex is also updating its internal feasibility study.

Any strong support to back the project from these quarters could see the initial 13-year Stage 1 of Rex’s proposed Hillside copper mine, located 12 kilometres south of the coastal township of Ardrossan, in production initially as an open-pit operation.

Mr Hall said the Chinese backed feasibility study was looking to see what further savings could be made to the mine’s start-up capital costs and what debt packages were feasible. Rex is also exploring other joint venture and investment options to get Hillside off the ground.

Regarded as Australia’s largest undeveloped open-pit copper mineral resource, Rex’s previous extended feasibility study (EFS) delivered All in Cash Costs of US$1.88/lb for its reserve of some 500,000 tonnes of copper metal, which is a subset of the resource of 2 million tonnes of copper and 1.4 million ounces of gold.

The mine, for which a mining lease has already been approved, is forecast to deliver an average head grade of 0.62% Cu and 0.16g/t Au, with an annual output of 35,000 tonnes of copper concentrate and 24,000oz pa of gold.

A possible Stage 2 will be evaluated in the future, and could cover production from years 13 to 26. The main ore body has been drilled out to approximately 600 metres depth to deliver the current Mineral Resource and Ore Reserve and more than 4160 million has been spent at the site to date.

The initial capital cost of AUD$480 million covers development of both the open pit mine and the construction of an on-site processing plant.

Mr Hall said the Company anticipated further improvements from the currently ongoing feasibility study updates.

Once a final investment decision had been made, it would take six months firstly re-routing the main roads around the required mine site boundaries, followed by an 18-month mine construction schedule.

“On this basis, the earliest we could see a likely production start at Hillside would be by late in 2021 if final approvals, financing and Board approval were achieved during 2019,” Mr Hall said.

The Hillside Project occupies an area of approximately 2km2 within a large Exploration Licence area of over 1,700km2. The bulk of this area is highly prospective for copper mineralisation. Many of these targets are based on geophysical features such as a magnetic survey, which played an important role in the discovery of the Hillside Project.