Jun 24 2004
Xstrata Zinc has approved development of the Black Star zinc/lead open pit at Mount Isa, in north west Queensland, Australia at a capital cost of some AUD27.6 million (USD18.8 million), of which AUD22.5 million (USD15.3 million) relates to pre-stripping of waste and the remainder infrastructure. Black Star is expected to provide an additional 1.5 million tonnes of ore per year to supplement current production output from the George Fisher underground zinc/lead mine and from underground mining activities at Mount Isa itself, with the objective of fully utilising the capacity of the Isa zinc-lead concentrator.
Development of the project will commence as soon as the required Queensland State Government approvals are received, with six months of pre-strip mining likely to begin in the second half of 2004. First production is scheduled from early 2005, with full production currently planned for at least five years, with significant potential for further extensions to the mine thereafter. The project is expected to create an additional 125 jobs when the open pit is in full production.
Drilling in the Black Star area during 2004 has defined a mineral resource of 24.2Mt grading 5.1% zinc, 2.7% lead and 54g/t silver. Inclusive of this resource, an initial ore reserve of 8.4Mt grading 5.2% zinc, 3.5% lead and 60g/t silver has been defined. The stripping ratio (waste:ore) associated with mining these initial reserves is around 4:1, with a planned pit depth of 200 metres.
The Black Star project was subject to a six month feasibility study costing AUD6 million, which assessed a number of critical issues including noise, dust, infrastructure placement and stability, blasting vibration and mine and waste rock dump design. The studies determined that re-establishing open pit mining on the Mount Isa lease could be done safely and with minimal environmental and community impacts.
Commenting on the announcement, Santiago Zaldumbide, Chief Executive Xstrata Zinc, said:
“The development of the Black Star open pit is the most high profile of a number of initiatives that are underway across our Australian zinc-lead businesses to improve returns and secure the longer-term viability of the operations. The Black Star project will provide the Mount Isa zinc lead operation with a new source of low cost ore, providing greater flexibility in managing supply and increasing total zinc lead output. The project’s low-capital cost and the improvement in capital efficiency from the increased throughput at the concentrator will make a major contribution to improving the value and profitability of the operation from2005.”
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