Minmetals Resources Limited (HKSE 1208) (
) announced Monday that its zinc ore reserves
climbed 103.9 per cent due to the inclusion of the
Dugald River ore exploration in estimates.
This development came with the approval of the
environmental impact statement by the Queensland government,
prompting the board of directors of Minmetals to approve
expenditure of A$157 million for the next stage of the Dugald
River Project, a statement released to the Australian Stock
"Dugald River is one of the largest undeveloped zinc deposits
globally and a key feature of MMR's future project pipeline. If
the project continues to move through the stages as planned,
Dugald River could commence zinc production and be cash flow
accretive in 2014," said MMR CEO Andrew Michelmore.
MMR also operates Australia's largest zinc mine, Century,
which produces approximately 500,000 tonnes of zinc in zinc
concentrate annually. Given the discrete nature of the Century
ore body, current estimates put Century's mine life ending in
approximately 2015. Dugald River has the potential to replace
nearly half this annual zinc production.
Dugald River Development
Dugald River is an undeveloped zinc deposit located in North West
Queensland, Australia. When developed, the project is expected to
produce approximately 2 million tonnes of ore and 200,000 tonnes
of zinc in zinc concentrate per annum from an underground mine
with a life of over 22 years.
The next stage will progress project activities up to receipt
of full environmental approval. Major work will include detailed
engineering, metallurgical test work, long lead time major
equipment procurement, continuation of early site works and
underground decline development. Key local infrastructure
development, including load-out, power and accommodation, will
also be advanced during this period. Following completion of this
phase the board will consider final approval of project
development and construction.
MMR's mineral resources
Mineral Resources additions exceeded mining depletion at Rosebery
and Sepon gold and partly offset depletion at Golden Grove
demonstrating the success of near mine exploration programs.
Century and Sepon copper Mineral Resources have decreased in line
with mining depletion
Mineral Resources (contained metal) as at 30 June 2011 are
estimated to contain 16.4 million tonnes of zinc, 3.3 million
tonnes of copper, 2.8 million tonnes of lead, 334.3 million
ounces of silver, 7.4 million ounces of gold and 0.26 million
tonnes of nickel. In general, Mineral Resources, except zinc have
increased since the June 2010 estimate predominantly due to
The Avebury Mineral Resource has increased with the extension
of the East Avebury and Viking Deep deposits through recent
drilling work. MMR will continue to study the economic
configuration of Avebury in view of long-term price assumptions
while the mine remains on care and maintenance. This will include
ongoing assessment of third-party approaches following the
completion of an expression of interest process during 2011.
Ore reserves (contained metal) as at 30 June 2011 are
estimated to contain 8.1 million tonnes of zinc, 0.9 million
tonnes of copper, 1.3 million tonnes of lead, 102.4 million
ounces of silver and 0.6 million ounces of gold. The total ore
reserve estimate for June 2011 represents a significant increase
in zinc up 103.9 per cent with the inclusion of Dugald
River in the ore reserves for the first time.
Other highlights of the ore rreserves statement included the
increase in other mineral ores. Lead was up 126.1 per cent and
silver was up 108.2 per cent, there was a minor increase in gold
of 1.1 per cent and a 6.1 per cent decrease in copper compared
with the June 2010 estimate. Comparison to the 2010 estimate
indicates an overall ore tonnage reduction of 11.2 million tonnes
due to mill processing at all sites being offset by added ore
reserves tonnage. This was significant with gold at Sepon up 2
million tonnes, Century up 0.9 million tonnes, Golden Grove up
4.2 million tonnes and Rosebery up 1.4 million tonnes. Sepon
copper Ore Reserves decreased 1.6 million tonnes.