Mine life extended at Broken Hill
PERILYA'S Broken Hill operations have received a boost after the zinc, lead and silver miner reported an increase to the mine life from three years to nine years on the back of an ore reserve and mineral resource upgrade.
The mineral resource for Broken Hill has increased 6% to 19.36 million tonnes containing 9.4% zinc, 7.3% lead and 90.8 grams per tonne of silver; and ore reserves total 10.02Mt containing 6.1% zinc, 4.5% lead and 46.7gpt silver as at June 30.
Perilya said the ore reserves and mining associated with this reserve had established a production life at the Southern operations of nine years, under conservative price assumptions, compared to the previously anticipated mine life of two to three years.
The Perth-based company also said material outside of the reported ore reserve had increased with mineral resources identified that were capable of conversion to ore reserves at a later date, which provided further opportunity to extend the life of mine at Broken Hill.
Perilya executive chairman Patrick O'Connor said the ore reserve and mineral resource provided validation that Broken Hill remained a world-class and significant base metals producer.
'Our goal now is to build on improved productivity at the Broken Hill operation, reduce the net cash cost to below $US0.60 per pound of zinc payable to move Perilya well down the industry cost curve, and to mine in a sustainable manner replacing ore reserves as we mine,' he said.
'To date we have had considerable success in improving productivity with over 80 per cent improvement in development rates performance and over 50 per cent in tonnes of ore mined per man over this calendar year, with further improvements evident under the resized Broken Hill operation.'
O'Connor also said the company was reducing operational costs, in particular the historically high fixed-costs component.
'Both productivity and cost improvements have contributed to extending the life of the Southern operations to nine years,' he added.
AMC Consultants completed an independent technical review of the methodologies and processes used for mineral resource and ore reserve estimates.
Perilya, since acquiring the Broken Hill deposit in 2002, has mined 11.3Mt of ore containing 1.2Mt of contained zinc and lead.
Contained zinc and lead metal within the ore reserve is currently 1.06Mt, which compares favourably to the 1.28Mt at the time of acquisition of the Broken Hill operation.
The company is undertaking further evaluation of additional target areas for potential inclusion in the resource.
Shares in Perilya have gained 0.5c to 20.5c in morning trade.