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OZ Minerals' speedier closure for Prominent Hill open pit to lower costs

OZ Minerals Ltd. is now expecting the cost for its Prominent Hill copper-gold open pit in South Australia to be 5% lower than previously forecast for 2017 due to an accelerated mining and closure schedule.

The ASX-listed miner said Oct. 16 that it has revised its full-year cost guidance downward to between A$7 and A$7.25 per tonne from between A$7.25 and A$7.75 per tonne previously.

An accelerated mine plan will bring forward the open pit closure to the first quarter of 2018, which will generate cost savings of about A$10 million over the remaining pit life.

OZ Minerals witnessed a slight increase in total copper production to 28,880 tonnes in the September quarter, from 28,163 tonnes in the prior quarter.

Underground production at Prominent Hill climbed 15%, while unit costs declined 21% compared to the prior quarter, with the mine on track to meet full-year guidance of 2.3 million to 2.6 million tonnes.

OZ Minerals said the second decline broke through to the open pit in August, enabling productivity and efficiency gains as the underground works to increase annual production to between 3.5 million and 4.0 million tonnes in 2019.

Meanwhile, the company and Minotaur Exploration Ltd. have committed to a new drill push just 22 kilometers from Prominent Hill.

The joint venture partners will undertake a 1,225-meter, four-hole program of diamond coring over four weeks, starting in late October, to test four shallow targets.

OZ Minerals and Minotaur previously agreed to each contribute A$1.5 million to test for base metals mineralization within OZ Minerals' Mount Woods tenements in the Prominent Hill area.

At the company's Carrapateena project in South Australia, phase one construction is underway following development sign-off from the board and regulatory approvals for the airstrip and accommodation village.

In Western Australia, OZ Minerals plans to make a decision on whether or not to progress its West Musgrave nickel project to the pre-feasibility study stage in the middle of the fourth quarter.